Author Topic: Retire when FI is reached or continue working for pension  (Read 2119 times)

kmall

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Retire when FI is reached or continue working for pension
« on: February 26, 2016, 02:05:49 PM »
A while back I posted a question about what to do with an windfall and the consensus was to index invest. I have done this and need to say thank you mustachians for the pointers.

My new question is this:

Would you retire the moment or soon thereafter when you reach FI or would you keep working until your minimum retirement age required for your pension?


My current job is one of the few with a pension. This pension requires I work until at least 57 to get. At my current savings and spending rate I will be able to comfortably retire at 45. This would also include being 100% debt free with no mortgage, car payments, kids college left to save and pay for.

So the question is whether you would retire at 45 and give up a pension worth possibly 30k a year or keep working until 57?

Parizade

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Re: Retire when FI is reached or continue working for pension
« Reply #1 on: February 26, 2016, 02:22:46 PM »
I think the answer depends on 2 factors:

1. How much do you like your job?
2. How much is 12 years of your life really worth?

If the answer to #1 is that you absolutely love your job and look forward to working every day and can't imagine quitting the by all means keep working.
If the answer to #1 is less enthusiastic, then you need to ask yourself #2.
The pension is worth half a million dollars if you live to age 75 (average for men), less if die younger, zero if you die before age 57.
Are you willing to trade 12 years of you life for that?
« Last Edit: February 26, 2016, 02:25:44 PM by Parizade »

G-dog

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Re: Retire when FI is reached or continue working for pension
« Reply #2 on: February 26, 2016, 03:08:30 PM »
How sure are you that the pension, or a reasonable payout therefrom, will be there when you are 57?
Many companies have or are eliminating pensions. My former company stopped. Offering it to new employees, and is in the process of reducing its contributions to existing accounts for those still working. I expect a buyout offer within 10 years.

So, you may hold on for something that will be eliminated - like the proverbial end of the rainbow. Since you already have an account, if you were still working when they eliminate it, they'd probably have to offer you some sort of lump sum buyout. I don't know that for sure, but they can't just keep the money.

thd7t

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Re: Retire when FI is reached or continue working for pension
« Reply #3 on: February 26, 2016, 03:13:05 PM »
A while back I posted a question about what to do with an windfall and the consensus was to index invest. I have done this and need to say thank you mustachians for the pointers.

My new question is this:

Would you retire the moment or soon thereafter when you reach FI or would you keep working until your minimum retirement age required for your pension?


My current job is one of the few with a pension. This pension requires I work until at least 57 to get. At my current savings and spending rate I will be able to comfortably retire at 45. This would also include being 100% debt free with no mortgage, car payments, kids college left to save and pay for.

So the question is whether you would retire at 45 and give up a pension worth possibly 30k a year or keep working until 57?
What do you consider the marginal utility of that money?  Is it worth 12 years of your life?  Also, if you've saved enough by then, how many additional years would it take to increase your stache by $750k afterward ($30k/yr at 4% withdrawl).  It's basically a "do you love your job" question.

Gin1984

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Re: Retire when FI is reached or continue working for pension
« Reply #4 on: February 26, 2016, 03:14:12 PM »
Most pensions don't disappear once you vest.  Yes if you leave at 45 you may get a lot less at 57 than if you worked till then, but leaving at 45 does not normally nothing at retirement age.

rubybeth

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Re: Retire when FI is reached or continue working for pension
« Reply #5 on: February 29, 2016, 08:08:15 AM »
I also have a pension, am already vested, and if I stay until I'm 67, I get a pretty huge monthly amount--but I'd rather retire by age 50 and have my free time. I think you have to decide if working for a pension when you would already be FI makes sense--it really doesn't make sense for me. You only get one lifetime.