Can I safely retire now?

[detroital]

I'm a sixty year old engineer with my house paid off.  I have $875K in savings.  No debt whatsoever.  A new vehicle I paid cash for and a 5 yr old one that I also paid for.  I will have a pension worth around $30K/year.  I'm concerned about healthcare in the future as in one year, the offerings for insurance from the company I work for went from excellent to shitty.  I am very stressed at this job that I've worked at for nearly 19 years.  Both my parents have lived into their 90s. I'm hoping for the same.  The longer I work, the more the pension and savings increase.  I can add SSI for about $25K/year in two more years. Should I retire now or give it a couple more years?  I'm tired. 

[MonkeyJenga]

We need more details, but my immediate response is yes. 4% WR from investments, plus SS, plus pension, adds to $90,000 in possible spending. That is more than enough for even the most extravagant spenders on here. How much do you spend now? Do you own your home? Have you researched the cost of non-employer healthcare (ACA/Medicare if you're in the US)? Are you single, or does this need to cover multiple people?

I would do a full case study to be certain: https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

[DreamFIRE]

I can add SSI for about $25K/year in two more years. Should I retire now or give it a couple more years?  I'm tired.

SSI?  You won't be eligible.  Do you mean SS?  I would be tempted to retire now rather than waiting until 62 just to get more money that you probably don't really need.  You can't buy more years of freedom.

[jeroly]

Depends on how much your spending will be.

Assuming that your pension kicks in at 65, you'll need to get to 65 using your $875k for expenses including health insurance. Then you'll be getting around $52k a year from SS and pension, plus you can plan on withdrawing around 4% of what's left over from your $875k, maybe another $20k for a total of around $70k. If that doesn't work for you, you'll need to save more / get increases in your pension and SS.

[ducky19]

If you can't retire on $70k/year with no mortgage, you're on the wrong forum - head over to the Bogleheads.  =)  Kidding aside, it sounds like you are in a pretty comfortable situation financially - if you are really that tired and it's affecting your health (mental or otherwise), I would pull the trigger and retire. I posted about an interesting Social Security article that you may want to consider depending on your tax situation:

https://forum.mrmoneymustache.com/mustachianism-around-the-web/new-spin-on-traditional-ss-advice!/

jeroly has the right idea that it depends on how much you spending will be, but that is something that is entirely within your control. If I were you, I would retire now and live off of savings until the pension kicks in to the tune of $50k a year. That may not sound like much, but if you have no real expenses you should be able to make that work easily - even with healthcare costs. In five years time, you'll have burned through $250k which leaves you with $625k (assuming it's just sitting in savings and is not invested). Pension kicks in at 65, meaning you only need to draw an additional $20k year from savings. If you delay drawing SS until 70, that would draw down your savings to $525k, but would also increase your SS payments by 20% forever. You'll then have $60k/year of guaranteed income until you die, plus any RMD's from your remaining half mil.

There are plenty of ways you can impact your spending. After you retire, find hobbies that cost little to nothing (hiking, reading, etc.). If you live in a HCOL area, consider moving to a LCOL area and pocket the difference. If you want to travel, use some of your new free time to do some research and find the least expensive time to hit your destination. Overall, I think your situation is doable - you won't live extravagantly, but you certainly won't starve! Good luck!

[ol1970]

How about don't retire, get a better job, or lower your hours, or just a fun job!  By your username I'm guessing you are an engineer in SE Michigan.  These are the good old days in Detroit, things are booming, good companies are screaming for help.   Seasoned engineers to work either part or full time is more in demand than I can ever remember...if your job stresses you out, leave it this afternoon.  I bet you'll be reinvigorated to work for a new spot or part time in some role that you find interesting.

Regarding the math question, yes you can retire now, but have something to retire to...not just because you are tired or stressed out.  That will lead to more stress IMO.

[mathlete]

You can do some back of the envelope math to produce a worst case scenario number for healthcare. ACA Premium (unsubsidized) * 12 + Out of Pocket Max = annual cost in year 1.

Then calculate the costs for years 2-5 with a generous healthcare cost inflation assumption. At age 65, you should qualify for medicare, bringing your healthcare costs down significantly.

If you think you can meet your other living expenses after deducting your top end healthcare estimate, I say go for it.

[Acastus]

You will get a more robust analysis by posting a detailed case study in the case study thread. Include spending and asset details, and list your concerns.

From what you have shared, you should be able to safely spend $35k/year from your nest egg. If your expenses are below $65k, then you are all set. If you need more, you can probably cheat and get away with a larger draw for 5 years. Maybe set aside 125k as "spend now" money, and recalculate your 4% spending from the rest. That would let you spend 25k "now" money, + 30k nest egg + 30k pension = 85k per year for 5 years. When SS kicks in, it will replace the "now" money, and you will be in better shape.

[mathlete]

Really though, just get all of your account info, pension documentation, and SS documentation together and take it to a financial planner. You'll get a lot of good feedback in this forum, but the most complete answer will probably come from someone who knows the tax implications of everything and who can evaluate your insurance needs and stuff.

[jlcnuke]

If you spend $150k/year, no you can't retire safely now. If you spend $15k/year, yes you can retire safely now.

Without knowing your spending, there's no way to answer your question properly.

[Dee18]

In summary:

When does your 30k pension kick in? Will it have cost of living adjustments?
    For example, I can take mine after age 50 and 20 years of service, but the amount is decreased
    3% for every year I am under 65.  Mine will not have a COLA.

Figure out your SS if you take it at 62 or 66.  Since you anticipate a long life, you might prefer taking
    it later for a greater overall amount (if you live to about 78).

How much will health insurance cost from now until 65?  (I use my COBRA amount for an estimate.)

And of course, mostly importantly, what are your real expenses?

I suspect you can retire now, but it would take you very little time to figure out the pension, social security, and insurance numbers.  If you know your real expenses, you'll have your answer.  If not, you may want to track those a few months.

[the_fixer]

I think you can get COBRA for a year when you leave so that might help.



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[AZDude]

I'm a sixty year old engineer with my house paid off.  I have $875K in savings.  No debt whatsoever.  A new vehicle I paid cash for and a 5 yr old one that I also paid for.  I will have a pension worth around $30K/year.  I'm concerned about healthcare in the future as in one year, the offerings for insurance from the company I work for went from excellent to shitty.  I am very stressed at this job that I've worked at for nearly 19 years.  Both my parents have lived into their 90s. I'm hoping for the same.  The longer I work, the more the pension and savings increase.  I can add SSI for about $25K/year in two more years. Should I retire now or give it a couple more years?  I'm tired.

Yes. Quit now and enjoy life. You have roughly $36K a year in SWR, plus whatever the pension covers, plus SS in two years. The pension should also presumably give you subsidized health insurance, even if it is "shitty"(most health insurance plans are shitty compared to what it used to be like). Even if you somehow blow through your savings, your SS and pension money should be enough for a reasonably comfortable retirement.

You have a shitload of money and very low expenses. Why are you even asking us? You are, probably, a smart dude given you are an engineer. You know the answer.

[the_fixer]

Pensions from corporations rarely include healthcare so I would not assume that healthcare is included.

I have 2 pensions and neither includes any type of healthcare

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[Brother Esau]

This fellow engineer thinks you are safe to pull the trigger on employment.

[detroital]

I spend about $30K a year currently. With inflation and/or unforeseen and unpredictable circumstances that could change.

[Bateaux]

Do it.  You're good as soon as you have a plan for health care.