Poll:Door number 1 or 2? Retire 5 years earlier...

[JoseSantiago]

Hi friends, first off thanks as always to all the support on this forum, I literally have a quote from here hanging in my locker I look at everyday... Anyway,

Scenario 1: Retire as early as possible at age 47, pension $80,000 401/457 around 1.4 million (if I get historical returns), lets say 1 million bad returns, zero catastrophic. (possibly work part time after for beer money or travel money)

Scenario 2: Retire at age 52, still relatively young, pension $100,000, 401/457 $2,000,000 (SAA, only work would be volunteering)

I'll add a few things for my personal situation, I have free health care from dual citizenship if I go abroad to the EU, I have cheap health care if I go south to Central or South America, from my understanding somewhat cheap if I stay stateside, multi-lingual. I work in a somewhat dangerous job, that the extra 5 years doesn't really seem all that worth it anymore. I do travel a lot, but other wise don't care about spending money much on cars bigger house etc. My current home is paid off currently around 700k value, no kids, vasectomy so that shouldn't change! No alimony, etc.

Thanks as always.

 

[BGH1]

Sounds like your good to go but depends on your spend per year

 

[Closet_Gamer]

I was on the "go 5 more years" page until I got to the "dangerous job" part.

5 more years bumps your pension 25% and your portfolio 43%. And you'd still only be 52.

But I don't know how dangerous your job is so you need to risk-adjust that. Is there a way for you to stay in business but move to something less dangerous.

For example, if you're a fire fighter, is there a nice desk job in the wings that could give you five years of growth without charging into burning buildings.

 

[Morgan22]

How much will your expenses be per year if you retire? Does the pension have a COLA? If your expenses will be less than $120k per year, and your pension is COLA'd, then definitely retire now!

Considering that your job is dangerous, maybe retire now and make it work with what you have.

 

[TheWizard]

OP mentions the EU and Latin America.
It costs $$ to go places and stay for a week or two.
So the issue is more the desired retirement income to allow recreation with all the free time.

I say five more years with ample time off to define your interests even better...

 

[street]

How much will your expenses be per year if you retire? Does the pension have a COLA? If your expenses will be less than $120k per year, and your pension is COLA'd, then definitely retire now!

Considering that your job is dangerous, maybe retire now and make it work with what you have.

X2

 

[JoseSantiago]

Thanks for all the replies so far, to answer some questions...


There MAY BE COLAS but its based on CPI, so some years yes some years no.

And also to clarify, south america central america or Europe would be to live, if not forever at least for a year(s), my house is in a very good neighborhood and I know I could get pretty high rent for it, as long as I get over the fact that strange people may be here for a few years before I get back. And i've been in the rental game awhile now to some degree, so fairly ready for challenges there and trustworthy family here to help with mgt,

Thanks again.

 

[aaronc879]

If I had an $80K/yr pension I would not even think about working another day after qualifying for that pension. That said, if you want a lot more than $80K/yr to spend for the next 40 years then you could work longer to have more toys.

 

[jollystomper]

The only reason I lean towards "retire now" is the danger in your job. I chose to work an additional 6 years after the numbers said I could retire to provide for a more "extravagant" retirement life and not have that life impacted by market downturns. But I enjoyed my job, and the only "danger" were travel risks, so I was willing to keep going. For me it was a very good decision, but my path does not always apply.

 

[Bamaman]

But you have not said how much you enjoy your job. Do you like what you're doing despite some level of danger?

If you don't enjoy your days, adios job.

 

[mrfeh]

... depends on your spend per year

This.

No way to answer the question without knowing what your expenses will be.

 

[retired1]

$1 million is no longer good enough but in your case pension is a big plus. It boils down to monthly budget but given you have no kids & no desire for luxury items (cars, homes etc.), it seems you are good. But the devil is in details.
Do this:
1) created detail monthly budget including phone bill, electricity, gas, property/rental taxes, health insurance etc. etc.
2) If your pension covers #1 above, you are good
3) Otherwise you'll need to wait until 59.5 atleast before tapping 401k so have ride money until 59.5.

Good job overall !! you sound like a good saver + frugal lifestyle. Those are the key ingredients to FIRE. You have those I think.

 

[Midpack]

But you have not said how much you enjoy your job. Do you like what you're doing despite some level of danger?

If you don't enjoy your days, adios job.

+1. Retirement is not strictly a financial choice, so I didn’t vote.

Do you enjoy your job, or at least find it rewarding/satisfying? What do you want to do in retirement, you need something to retire to, not just a job to retire from?

Some people flounder without the structure and/or social interactions, some don’t. Some people suffer from boredom and depression in retirement, though by means universal (neither is retirement bliss).

I could have retired at 51, actually retired at 57, and I wish I’d worked a little longer for non-financial reasons all things considered.

 

[pacergal]

As others have said, it all depends on your expenses.
Pension helps tremendously, and a dangerous job is not to be taken lightly.
Does your pension cover your expenses or would it if you loved overseas? Does pension plus 3% WD cover expenses? Due to younger age, I would not want to WD more than 3%.

If the answers to above questions are Yes, then definitely time to retire!

 

[cyber888]

Dangerous - like, are you a hitman and want out from the mafia? Then, do it - retire now and flee to South America or some other areas

 

[TheWizard]

Dangerous - like, are you a hitman and want out from the mafia? Then, do it - retire now and flee to South America or some other areas

Good point.
Made Men can't just retire in place, to my knowledge...

 

[Sunset]

As I read it, I was going to say work the extra years, but then I got to the dangerous job part.
So that does make me think retire earlier.
Is it really a choice of A or B, or can it be A+1 yr to beneficially affect the pension

 

[DrRoy]

If you get a COLA then in 5 years you might be at $100K anyway. Of course the 5 yr out number would be higher too.