Author Topic: Am I trapped?  (Read 4102 times)

bfitz5

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Am I trapped?
« on: October 12, 2014, 06:56:59 AM »
Hi , I am a long time lurker, a big mmm fan and I finally jumping in to the discussions.  I need some advice or some perspective on how to look at this:

I am 53 y.o. and am looking at retiring at 55.  My pension with my current employer will pay ~$750/mo if I retire at 55 and that jumps to $2300/mo at 62 and $2900/mo at 65.   I have other investments to enable me to retire.  It is less a question about if I can retire rather what am I leaving on the table with my current employer should I go at 55.  When I look at annuity tables it looks like a bucket load of money for that next 7 years.  Is this typical?  I also am not sure if that is a linear scale between 55 and 62 or not.  Thoughts or comments?

Thegoblinchief

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Re: Am I trapped?
« Reply #1 on: October 12, 2014, 07:34:25 AM »
More information about your other investments would help.

Assuming they plus the $750 cover your desired lifestyle, this becomes a question of "what is enough?"

Only you can answer that.

Metta

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Re: Am I trapped?
« Reply #2 on: October 12, 2014, 07:42:12 AM »
When you actually retire and when you activate the pension does not have to go together. So in my situation some of my pension accounts can be activated when I officially retire at 55 but I'm allowed to refrain from activating the others so that they'll be nice and plump by the time I activate them at a later age. My recommendation is that you check on the rules for your pension. Perhaps you can retire, enjoy the other retirement benefits, and activate the pensions later once they've grown fatter.

Bob W

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Re: Am I trapped?
« Reply #3 on: October 12, 2014, 08:47:05 AM »
Sounds like an enormous spread.

arebelspy

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Re: Am I trapped?
« Reply #4 on: October 12, 2014, 10:54:18 AM »
You are never trapped.

If you have enough, you have enough.  Will you trade more years of your life for what you don't need?

When you ER and leave money on the table, and people ask "why don't you stay, you can have so much more money" you can respond with a comment someone made on E-R.org years ago, that I copied into my good quotes folder because I liked it so much:
Quote
Yes I could stay work more years and earn more money.  And I could breathe twice as fast and soak up twice as much oxygen.  I think at some point, one has "enough" and just doesn't need anymore.  I am not really into accumulating stuff, and we're happy with what we have.  There are few things that I would rather spend money on than my freedom.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

DoubleDown

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Re: Am I trapped?
« Reply #5 on: October 12, 2014, 11:18:09 AM »
Another vote to check on deferred retirement options. There's probably a good chance you could quit at 55 but NOT start withdrawing your pension/annuity until age 62+, and the amount may be much closer to that $2300 - 2900 per month. It's probably a false, apples-to-oranges comparison to compare the amount you'd get by quitting and withdrawing at 55 vs. quitting at 62+. The better comparison would be the amount you'd get by quitting at 55 and deferring the pension until 62 vs. working until 62. Then you can decide if the difference is worth it.

If the difference is not that great, or not great enough to continue working that long, you just have to find a way to bridge the gap with other investments between age 55 and the time you start your pension at 62+.

wtjbatman

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Re: Am I trapped?
« Reply #6 on: October 12, 2014, 11:48:01 AM »
OP, if you can hold off on taking the pension until 62, do it. If you still retire at 55 obviously you will need to replace that income for 7 years... but after 7 years you get $1550 more a month? That is huge.

If you have a 401k/IRAs/taxable savings that will get you from 55 to 62, do it. Also keep in mind that if you have a 401k and separate service from your job at 55 you can actually start making penalty free (obviously not tax free) withdrawals from the 401k without worrying about messing around with SEPP or Roth rollovers.

bfitz5

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Re: Am I trapped?
« Reply #7 on: October 12, 2014, 01:11:34 PM »
Thanks to all for your replies.  I do not need the pension to bridge the gap so I will ask about retirement at 55 with deferring payments until 62+.   I also fully appreciate the "If you have enough, you have enough"  comments I am on board 110%  with those sentiments. 

Exflyboy

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Re: Am I trapped?
« Reply #8 on: October 12, 2014, 02:21:51 PM »
Well you can leave your company at 55.. just quit.. Then start taking your benefits at 62.. Makes no difference to them whether you work at another company or not between 55 and 62.

I'm 53 next week.. my pension from the UK kicks in when I'm 60 and the Wife's two years after that. I got enough money to retire on so in Jan I quit.

Now I will work occasionally because I enjoy the work but my previous employer(s) doesn't care one hoot

Frank