What would you do?

U

usafLT

Dryer sheet wannabe
Joined
Apr 7, 2010
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What would you do in this hypothetical situation?

You have 5-7 years until you can collect a government pension. Your job is bearable meaning you enjoy it to a point yet would much rather just be retired. Turns out, you happen to have enough money to retire right now. It is enough money to live above your means and do just about whatever you'd like to.

Do you stay 5-7 more years because you are so close to that pension and everyone can use some extra money OR throw in the towel and watch your coworkers look at you like you're crazy?
 
usafLT said:
Turns out, you happen to have enough money to retire right now. It is enough money to live above your means and do just about whatever you'd like to.
Click to expand...

If I were sure about this part, the door wouldn't hit me in the assets on the way out...
 
That pretty much describes where I hope to be in 4 years time. If that works out, they won't see me for dust.
 
Stick around only if getting health care benefits is important. Otherwise, adios, amigos!
 
I have to disagree . A pension is a nice thing to have when the market goes crazy . So could you go through a period when your assets dropped by 40% and not wished you had waited for the pension ?
 
I agree with Moemg.

If I didn't mind the job and knew I'd get a pension in 5 to 7 years, just the fact that I could walk any time I wanted would make that 5 to 7 years much more enjoyable. I'd take great vacations, but I wouldn't leave until the pension kicked in.
 
I was FI years before I retired or was eligible for the pension. The work was still fun and I couldn't imagine doing anything else. Having the money meant I could wear my KMA hat to work most days. The pension outlook got better and I hung around an extra 5 years after I could have left.

A COLAed pension (or even a diet COLA version like mine), access to affordable health insurance, and FI on top of all that makes my ER darn near bullet proof.

But I'm a belt and suspenders kind of guy when it comes to this sort of thing.

The last 5 years were bearable, the last two being less than pleasant, and the very last year was near misery. I'm not sure I could have done all of the last 5 if I had hated going to work every day.
 
I tend to side with Moemg. If I had a chance at a pension and healthcare, I would probably try to stick it out. But, having enough to be FI feels great, and you know you can bail anytime you want if it becomes unbearable. We are FI enough that we would probably be just fine, but I have no pension, so we are hanging on until end of 2012 when the kids are about finished with university. Once the last check is signed, we're outta here ( or earlier if it is becomes too much to bear).

R
 
usafLT said:
What would you do in this hypothetical situation?

You have 5-7 years until you can collect a government pension. Your job is bearable meaning you enjoy it to a point yet would much rather just be retired. Turns out, you happen to have enough money to retire right now. It is enough money to live above your means and do just about whatever you'd like to.

Do you stay 5-7 more years because you are so close to that pension and everyone can use some extra money OR throw in the towel and watch your coworkers look at you like you're crazy?
Click to expand...

I'm not sure a person in that situation would have to choose between "leave now" and "extra money". In at least some systems, if you're "vested" you can leave your contributions in the pension fund when you leave your job, and start drawing the pension later on when your combination of age + years of service make you eligible. I'm a government employee—under the system where I work, unless you have 30 years of service, you have to be at least 52 to draw a pension. Suppose this hypothetical government employee is 47 and has 20 years of service. I believe s/he could begin to draw a pension on reaching age 52, even if no longer working for the City (or anyone else for that matter). It would be a small pension (24% of the average of the best two years' salary), but it wouldn't be zero. Only someone who had worked for the City less than five years all told would be completely ineligible for a pension, but that person can roll over their accumulated pension fund contributions into an IRA and produce income that way. Again, it would be possible to leave now and have extra money.

Having said all that, if I already had enough of a portfolio to support myself in the style to which I would like to become accustomed, I don't think I'd hang around another 7 years to get a pension, especially since I will be eligible for a Social Security benefit in the future. For paid health coverage I'd probably do it, but the system I'm in doesn't pay for retiree health insurance anyway, so I'm safe from that temptation.;)
 
usafLT said:
What would you do in this hypothetical situation?

You have 5-7 years until you can collect a government pension. Your job is bearable meaning you enjoy it to a point yet would much rather just be retired.
Click to expand...

It depends on how much that pension is compared to the income from your portfolio. If it is substantial, meaning 25% or more of your portfolio income, I would stick around for it. Since you do not hate your job, it does not look so bad. Of course reading about people lounging all day and bragging about it here on this forum makes it harder, I tell you. I don't hate my part-time work, so I don't see myself stopping in the foreseeable future.
 
usafLT said:
What would you do in this hypothetical situation?

You have 5-7 years until you can collect a government pension. Your job is bearable meaning you enjoy it to a point yet would much rather just be retired. Turns out, you happen to have enough money to retire right now. It is enough money to live above your means and do just about whatever you'd like to.

Do you stay 5-7 more years because you are so close to that pension and everyone can use some extra money OR throw in the towel and watch your coworkers look at you like you're crazy?
Click to expand...

I work for the Canadian government, so your mileage may vary. I've known people in your shoes. They are in decent enough shape to retire with a penalty to their annuity. But, they usually stick around and cherry pick the projects they want to work on. People with their experience usually have a bit of leverage with their managers in the Canadian gov. One person here basically asked to work on special projects so that he could get away from some of the daily grind. It worked out great for him. He has been shuffled from project to project for the last 4 years and has been asset to all of the projects because of his experience.
 
kyounge1956 said:
I'm not sure a person in that situation would have to choose between "leave now" and "extra money". In at least some systems, if you're "vested" you can leave your contributions in the pension fund when you leave your job, and start drawing the pension later on when your combination of age + years of service make you eligible. I'm a government employee—under the system where I work, unless you have 30 years of service, you have to be at least 52 to draw a pension. Suppose this hypothetical government employee is 47 and has 20 years of service. I believe s/he could begin to draw a pension on reaching age 52, even if no longer working for the City (or anyone else for that matter). It would be a small pension (24% of the average of the best two years' salary), but it wouldn't be zero. Only someone who had worked for the City less than five years all told would be completely ineligible for a pension, but that person can roll over their accumulated pension fund contributions into an IRA and produce income that way. Again, it would be possible to leave now and have extra money.

Having said all that, if I already had enough of a portfolio to support myself in the style to which I would like to become accustomed, I don't think I'd hang around another 7 years to get a pension, especially since I will be eligible for a Social Security benefit in the future. For paid health coverage I'd probably do it, but the system I'm in doesn't pay for retiree health insurance anyway, so I'm safe from that temptation.;)
Click to expand...

I never really thought of that. Coming from the military, I always think of a pension as an all or nothing deal. If this were the case I would most definitely punch out.
 
UsafLt: Based on your account I would stay on. Don´t let yourself be fooled by a lot of exagerations about ERed excitement:cool:! Anyway, if you don´t mind my asking, how old are you?
 
I'm 25 right now, looking to transition my career out of the military. I have my ER plan and this situation crossed my mind because if all goes as planned (which when does that ever really happen) but if it does, this may be a situation I am in.

I am just an over planner for the future. I always try and thing of all the kinks in any of my plans.
 
Purron said:
25? Dang, I have shoes older than you;)
Click to expand...

:ROFLMAO::ROFLMAO::ROFLMAO:

I take it back--I don't think someone your age should worry about staying somewhere for the pension--you are in your prime risk-taking years. You can worry when you're old like me. Or like Purron's shoes.
 
stick around for it. military officer pensions are among the best there are. Plus, as an officer, you will make sufficient income to where you can fully max out the TSP every year, while still being able to put other money away. Pensions are vitally important and you are very lucky to have one--look at the stock market since 2000. Also, you can retire after only 20 years in the military, so you'll be in your early to mid 40s. You could still have a second career.
 
Extra money is always nice.

Sounds like you're pretty organized. What does "Turns out, you happen to have enough money to retire right now." mean? There's a pretty big difference between there's a big pile that can be constantly chipped away at for the rest of your life versus, it's invested in a way that it throws off enough money for your lifestyle and grows at the same time... amongst other versions of "enough money".

Also, I'll throw in some of my favorite questions. What are you going to do when you leave. I think it's one of the most important things besides the finances. Many don't bother to think about the fact that they suddenly have a whole lot of weekday that's not earmarked for anything. Keeping busy with work / a job / a cheap hobby costs a lot less than new leisurly and potentially costly activities (travelling and having a drink with whichever friend I can find with a weekday off being some of my favorites).

Extra money is always nice.

Sounds like you're pretty organized. What does "Turns out, you happen to have enough money to retire right now." mean? There's a pretty big difference between there's a big pile that can be constantly chipped away at for the rest of your life versus, it's invested in a way that it throws off enough money for your lifestyle and grows at the same time... amongst other versions of "enough money".

Also, I'll throw in some of my favourite questions. What are you going to do when you leave. I think it's one of the most important things besides the finances. Many don't bother to think about the fact that they suddenly have a whole lot of weekday that's not earmarked for anything. Keeping busy with work / a job / a cheap hobby costs a lot less than new leisurely and potentially costly activities (travelling and having a drink with whichever friend I can find with a weekday off being two of my favourites).

Lastly, you're really young (actually, my DW's age). You probably have tons of drive and energy in you. Have your fun and relax as you see fit, but you may want to also keep your mind on the next step too. When we retired, we lived it up for a little over a year doing all sorts of outlandish things but then settled into a comfortable schedule where we have some sort of a regular routine of casual paced work (stuff that we like since the money doesn't matter) that takes care of personal growth and small inklings of wanting to contribute. Just want you to dodge the "well, that was fun... is this all there is?" pitfall that I've seen a few "lucky" folks stumble into.
 
Its good to be looking to the future, keep your options open. When I was a LT, I was living off of E5 pay, and banking the rest. I continued living small, until I got married....I married a spender. You are at the point that if you are not happy now wearing the uniform (not job satisfaction), I'd recommend you go to the Reserves and try it. If you are not happy in the Reserves get out, while you still can...I know my job satisfaction varied with my assignments, that was one of the things that kept me in, I knew the worst job was going to be over in two or three years at the latest. I loved serving my country, just not everyone of my bosses...
 
usafLT said:
I'm 25 right now, looking to transition my career out of the military. I have my ER plan and this situation crossed my mind because if all goes as planned (which when does that ever really happen) but if it does, this may be a situation I am in.

I am just an over planner for the future. I always try and thing of all the kinks in any of my plans.
Click to expand...

Ah, that changes things. Please ignore my previous post. I was talking about people in their 50s a few years away from an immediate annuity.

This may be presumptuous of me, but I suggest you send Nords a private message and have a chat. He might be able to provide some great insight on this. Good luck!
 
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