I'd really like to give notice this week in order to work my last day the day before my 56th birthday. Been w/employer 19+ years. Loved it until about 3 years ago when I was put in a bad position with no support, which triggered a 3-month medical leave. After I returned, nothing was improving, so last year I took a 20K/yr pay cut in order to switch to a new department, in a lower-level position. Honeymoon period was fine, and I love the people I work with now and how they operate, but I'm still miserable. I was trying to make it to the end of October when I'll hit 20 years of service and will be eligible for reduced pension. I don't think I can do it -- my health, home and relationships are suffering immensely, in some ways irreparably. Do these numbers indicate I'll be okay if I quit work this month?
Age 55, single, no kids.
Current income -- this is kind of guestimate-y as I've modified retirement contributions a couple times this year, but this is annualized for current withholding/contributions.
Gross pay | 82300 |
taxes | 12000 |
pre-tax retirement (403b/457b/required 6% to pension) | 34938 |
other withholding | 1200 |
Roth IRA | 7000 |
Net pay | 27162 |
Interest and re-invested dividends | 1100 |
Expenses - I've tracked my expenses for >10 years, and it has bounced up and down, always within the 30-40k range, with 2 exceptions: my highest spending year was $41k in 2010 (bought a car) and lowest year was $26k in 2020. Spending this year through May is averaging $2018/month as I'm under-spending in some of the categories listed here, and some show expected post-covid/post-work increases.
| Monthly | Annual |
Expenses |
|
|
Mortgage (PI/no escrow) | 324 | 3888 |
HOA Fees (includes flood and hazard insurance) | 225 | 2700 |
Tax (200) and HO6 Insurance (30) | 230 | 2760 |
Home maintenance fund | 125 | 1500 |
Phone/internet/water/electric/pest control | 204 | 2448 |
Car - gas, maintenance, tax & tags, insurance, repair fund | 180 | 2160 |
Groceries/hba/paper goods/alcohol | 450 | 5400 |
Medications/co-pays/coins | 50 | 600 |
pets - food, meds, routine vet, misc | 160 | 1920 |
pets - major medical fund | 50 | 600 |
Non-essentials: entertainment, clothing/shoes, travel, household furnishings, electronics replacement, charity, membership fees, restaurants/bars, misc - each category ranges from $15 to $120 / month | 420 | 4800 |
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Estimated RE additions |
|
|
Health Insurance till age 60 | 150 | 1800 |
Dental/Vision (insurance and/or self-pay?) | 100 | 1200 |
Income Tax | 352 | 4224 |
| | |
TOTAL EXPENSES | 3020 | 36000 |
Essentials-Only Expenses | 2600 | 31200 |
| | |
Post-RE Income | | |
Pension (gross) starts year 5 | 2692 | 32304 |
SS (75% of FRA est) starting year 11 | 1901 | 22815 |
or SS (75% of age 70 est) starting year 14 | 2300 | 27600 |
Liquid Assets | 638k |
Cash | 41k |
Bonds | 6k |
Investments (100% equities) | 42k |
457b (70/30 target fund, adding 2k/mo) | 15k |
403b (52k cash, rest in index funds, adding 500/mo to Fid Balanced Fund) | 364k |
Roth IRA (95/5) (maxed thru 2021) | 170k |
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Edited to add: I'll have immediate, penalty-free access to both the 457b and 403b accounts under the Rule of 55.
Home value | 150k |
Mortgage | 69.8k |
- Only debt is mortgage: Refinanced 2016 for $78,000. 30-year 5/5 ARM at 2.5%, expected to re-set to 2.75% in November ($16/mo increase is reflected in above budget). Next re-set will be in 2026.
- Car is 2017, with 11,500 miles on it. I expect it to last at least another 15 years -- and I expect I'll actually start driving it once I'm no longer working. (My commute pre-covid was 5 miles round trip driving, or 2 miles round trip walking.)
- If I quit before end of October, I'll be a few months short of 20 years of state service, which means I'll have to wait until age 60 to claim my pension. If I quit at the end of October, I'll have 20 years and be immediately eligible for my reduced pension, but would likely wait a 3-4 years anyway since the payout would go up ~7% per year.
- Pension is state employees system, 90% funded last I checked, so I'm fairly confident in its stability/reliability.
- Plan to do ACA for health insurance until I claim my pension. At that point, I'll also be eligible for health insurance, currently at a cost of $50/month for 80/20 plan, or $0/month for 70/30 plan. The state seems committed to always having a $0 premium option available for retirees, though obviously the quality of that option could decline. At 65, Medicare becomes primary insurance, state plan becomes secondary.
Biggest fears/challenges/potential wrenches-in-the-plan:
1) Housing: My current home is becoming increasingly flood-prone and I really need to get out of here ASAP, before we flood again. First problem is, because of my current burnout, my home has a lot of repairs that need to be done, like yesterday. I'm guessing the cost could be anywhere from $3k to $8k. On the plus side: I currently have 3.3k in my home maintenance/repair fund. Second problem is, I have absolutely no idea where in the world I want to live long-term. I don't hate the area I'm in now, but don't want to be here forever. I'd like to be near family, but I can't take the winters where they live. Third problem, I have a cat who has never known any other home and can't stand to go anywhere else. I can't just throw him in the car and travel around the country, scoping out potential new places to live. Then the obvious fourth problem, if I want to buy will I be able to get a mortgage? Or have enough to pay cash, if neccesary?
2) Lack of social/support network: Being Autistic, I find establishing and maintaining friendships to be extraordinarily difficult. TBH, I even have trouble maintaining acquaintances, lol. I feel like I can do better at this (have been better in the past) once my work is not sucking up every bit of my energy. But bottom line, due to distance from family, having no children myself (though lots of neices and nephews), and no real friends locally (despite having been here for 20 years), I sometimes end up needing to pay for assistance with many things that most people would just call up a friend or family member to help with. That has the potential to become seriously expensive as I get older and need more help.
I think these two things--and the unknown but potentially huge related costs--are my biggest obstacles to pulling the trigger on RE. I've tried out several of the calculators/planners discussed on this site. I've used Fidelity's planner the most -- it's the easiest for me since nearly all my accounts are there and they know my exact AA. In all of the calculators, I can push my spending up to ~$45-$50k before things start to fail, so I feel I've got a decent amount of flexibility for emergencies.
So I think I should be okay to quit RIGHT NOW, but would appreciate hearing what others think. Again, my primary question: Would it be a mistake to put in my notice this week?
Other questions:
- Any holes or red flags in my budget? Even though I know my expenses to the penny for the last 10+ years, I feel like I've got to be overlooking something!
- How much should I let the Housing and Social Support fears rule my decisions right now? Are my fears overblown, or should I be knuckling down for another 10 years of work, or somewhere in between?
Oh, boy, this is a long one. If you're still here, THANK YOU for reading my very first MMM post! :)