Retire now or in 1-3 years. What would you do?

[stasherus-maximus]

Hello! I think I’m at the point where I need some wiser folks to look over my situation and my plan and perhaps offer advice, criticism, etc. I’ve been in accumulation mode so long I can’t quite believe I’m getting close to retiring.

I wrote down a LOT of info below (too much?), but basically, I’m having trouble deciding between:

A. Working 1-3 more years and taking a reduced early pension. Supplement yearly spend with 457b.

B. Retiring ASAP and waiting to take penalty-free pension at 60. I could possibly bridge the gap with a 457b, and maybe Roth ladder.

** LIFE SITUATION **

Married. I’m 48. My wife is 46. No kids. We file Jointly.

** GROSS WAGES **

I currently make $68k and my wife makes $65k ($133k combined). We both recently got raises. We both work at a large state university in the US.

** CURRENT BUDGET **

Needs:
Mortgage = $947.54
Phone = $20.00
Internet = $75.00
Water = $20.00
Trash = $20.00
Natural Gas = $50.00
Electric = $150.00
Transportation (insurance, tax, tag, gas, maintenance, etc.) = $224.84
Medical (doctor bills, meds) = $70
Food (groceries, take out, adult beverages) = $700
Household supplies = $200
Personal care and clothing = $70
Misc. = $110

Wants:
Travel Fund = $300.00
Netflix = $15.49
Amazon Prime = $11.58
YouTube = $11.99
Books = $25.00

TOTAL SPENDING. Monthly = ~ $3,200.00 (Yearly = ~$38,400.00). I’d say it’s probably closer to $40k in recent years if I’m honest and include occasional purchases like gear for hobbies.

** UPCOMING LARGE EXPENSES **

• Our house needs a new roof. I’m guesstimating ~ $12,000.00? Maybe less if we can work with insurance company.
• House needs some other remodelling work. We DIY most things though. We’ve already done the kitchen and one of two bathrooms. We will DIY remodel the screen porch, living room, and master bath. Living room and screen porch don’t need much work. Master bath will be the toughest and most expensive. I’m guesstimating ~ $10-12k total?
• Might need (want) a road-trip vehicle in retirement. Our vehicles are both 20+ years old and not that comfortable for long trips. Sprinter Van? This would be a stretch. Probably $40-50k even with DIY fix up. Might be worth working OMY?
• Need a new computer. 10 year old mac is on it’s last legs. $2000.00?

** PROJECTED RETIREMENT BUDGET **

If I decide to retire a few years before my wife, we would most likely stick to our usual yearly spend of ~$40k or less until she also retires. When we are both fully retired we had planned to spend a considerable amount more on travel and hobbies though.

If I retire early and wait until 60 to take my pension, bridging the gap with 457b, etc., I don’t think we could use our “ideal retirement budget”. Seems a bit too ambitious? Personally, I think I could trim the "wants" section to a large degree. My wife probably would not want to trim the travel budget though.

Ideal Chubby FIRE Retirement Budget - Projected Annual Spend of ~ $70-75,000.00. Some padding included for inflation.

Needs:
(Ideally, covered by our Pensions)

Taxes = ~ $8-9k per year (our taxable income currently is pretty low due to investing in tax-deferred accounts, so this will be a big change for us.)
Mortgage = $1,000.00
Phone = $50.00
Internet = $90.00
Water = $35.00
Trash = $20.00
Natural Gas = $50.00
Electric = $200.00
Transportation = $413.58 (could be much higher if we decide to upgrade vehicles)
Medical = $300.00 (with university pre-65 retiree health insurance. If ACA, could be a bit higher?)
Food = $1,000.00 (groceries, restaurants, adult beverages)
Household = $250.00 (everything from paper towels to appliance replacement fund)
Personal Care & Clothing = $50.00
Misc = $110.00

Subtotal = ~ $55,000.00

Wants:
(Ideally, covered by Stash. Lots of padding here. Might not really be this spendy in retirement but want to have it just in case. Can scale up and down depending on markets, inflation, etc.)

Travel Fund = $1,000.00 ($12,000.00 per year. Everything from camping, road trips, overseas travel). Should research more about travel hacking to reduce this!
Hobbies = $300.00
Luxury = $100.00 (massage/physical therapy, various classes and training, etc.)
Netflix = $20.00
Amazon Prime = $15.00
YouTube = $15.00
Books and Misc = $25

Subtotal = ~ $18,000.00

TOTAL Projected Annual Spend in Retirement = ~ $70-75,000.00


** LIQUID ASSETS **

Our investments are 95% stocks / 5% bonds.

My funds (as of September 4th, 2022):
Roth IRA = $142,949.84
Taxable account = $22,806.82
457b = $394,549.56
403b = $191,697.50
HSA = $32,876.20
Emergency Fund = $29,609.48
TOTAL = $814,530.05

My wife’s funds (as of September 4th, 2022):
Roth IRA = $140,375.67
457b = $299,846.66
403b = $49,830.33
HSA = $27,154.58
Emergency Fund = $9,939.81
TOTAL = $527,151.09

SHARED Accounts (Credit Union and Bank, etc.) = $9,528.85

COMBINED TOTAL = $1,351,209.99



** PENSIONS & SOCIAL SECURITY **

My wife and I are both eligible for state university system pensions. See ** QUESTIONS ** below for some numbers and… questions.

I don’t really factor in Social Security or inheritance. Those would be gravy.

** PHYSICAL ASSETS **

House in the burbs. We bought it in 2017 for $170,000.00. Zillow says it’s worth ~ $320k.

We drive 20+ year old vehicles. Old, but well-maintained and reliable. Probably less than $10k total Blue Book value.

No other large value assets really.

** LIABILITIES **

30 year mortgage @ 4.125%
Still owe = $122,266,41
Mortgage payment  = $947.54

• Principal = $238.83
• Interest = $420.29
• Taxes & Insurance = $288.42

** QUESTIONS & CONCERNS **

So, I’m pretty burnt out and want to retire soon-ish. I don’t have too much longer to go (1 - 3 years?) but I’m struggling to reach the finish line. The job itself is not overly stressful, most of the time, but I’m so tired of sitting at a computer all day in a windowless office. I have a good amount of joint pain (back and hips) from various injuries, and long days of desk work are not helping.

Also, as an introvert, office culture and politics really drain me. By the end of the week, I’m a wreck, and then have to spend what energy is left on chores, errands, and house projects.

At 48 I’m no youngin’. I have had some health issues in the past. Most of my male relatives have not made it past their early 70’s. I want to make the most of the years I have left and do active things during the weekdays like mountain biking, kayaking, hiking, etc., as well as art, music, etc.

But I’m not sure if it makes great financial sense to retire right now. I have a spreadsheet/timeline mapped out. Over the next three years, every 4-6 months I can hit various financial milestones. Classic case of golden handcuffs and/or optimization?

If I take a sabbatical, I’m not sure I could make myself get back out there, and then I probably wouldn’t have the money to fund our “ideal Chubby FIRE” retirement budget. I keep telling myself I just need to push through, work 2-3 more years, and never worry about working for money again. I’m trying to rearrange my mental outlook and be more positive. But I think about leaving constantly and it’s driving me a little nuts.

The following numbers and milestones are mine only. My wife is planning to work for at least 4 more years, hopefully getting some raises, building up her investments, increasing pension service credits, etc. along the way. At the end of her career she would be receiving a similar pension amount since her salary, and years of service credits, would be similar to mine at that point (she started working there a couple years after I did, at a lower salary starting point, but caught up in recent years).

Important notes on pension:

• It’s possible to take a university system pension early after 25 years (of service credits) in the system. But, for each year before 30 years there is a penalty of 7%.
• If you elect to take pension early, there are no COLA’s for each year before 30.
• For instance, 25 years = 5 years with no COLA’s, 27 years = 3 years with no COLA’s, etc.
• Inflation is obviously pretty crazy right now. This definitely worries me. The pension payments could shrink significantly, and permanently.

My upcoming milestones:

• October 2023 = 25 years of pension service credits (minimum needed to retire).
• Take my pension early at 49 = ~ $19,825.00
• Take my pension at 60 =  ~$30,500.00


• April 2024 = 2 years of higher salary (@ $65k). So, higher pension payments.
• September 2024 = 2 years of higher salary (@68k) So, higher pension payments.
• October 2024 = 26 years of pension service credits.
• Take my pension early at 50 = ~ $25,833.60
• Take my pension at 60 =  ~$35,880.00


• April 2025 = University healthcare coverage for pre-65 employees can continue.
• October 2025 = 27 years of pension service credits. Probably the maximum amount of time I would consider working.
• Take my pension early at 51 = ~ $30,288.60
• Take my pension at 60 =  ~$38,340.00

I’m having a hard time choosing from the following options:

• A. Retire early at 25/26/27 years in university system (49/50/51 years old) and take the pension penalty hit.
• The longer I work would bring added benefits like higher pension payments, (hopefully) larger investment accounts, cash cushion for SORR, and fairly affordable university system health insurance coverage.
• Could supplement pension income with 457b withdrawals.


• B. Retire early, but wait until 60 to take the pension, penalty-free.
• From ages 49-60/50-60/51-60 I could possibly “bridge the gap” with 457b (no withdrawal penalties) plus maybe some sort of Roth Conversion plan. I definitely need to read more on Roth conversion strategies.
• Maybe pick up some part-time, seasonal, or freelance work if things are looking shaky? Really don’t want to though.

EDIT - Another option?
C. Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

Any advice? I’m really curious to hear what you would in my situation.

If you’ve read all of this, I want to thank you for your patience. And a huge thank you for any advice, thoughts, recommendations, face punches, etc.!!!

[c-kat]

Your expenses are low and you have lots invested, so really any of the options would work.  It just depends on whether you want the bigger pension or not.

I have a question about your pension. If you defer it to age 60 do you get inflation between now and 60?

[stasherus-maximus]

Thanks for the feedback!

That's a good question. I'm going to meet with the pension people sometime this year. I'll write that one down. I know there is no COLA, for a while, if you take it earlier than the full 30 years (25 = 5 years no COLA, 26 = 4 years no COLA, etc.)

But yeah, if I work, say, 25 years but defer the pension until age 60, and then take it with no penalty, what happens with inflation over those 10 years? Because if I have a pension of $30,500.00 coming to me 10 years in the future, the purchasing power of $30.5k sure won't be what it once was.

Would that be a good reason to just go ahead and take the pension ASAP, despite the lower amount?

 

[c-kat]

Thanks for the feedback!

That's a good question. I'm going to meet with the pension people sometime this year. I'll write that one down. I know there is no COLA, for a while, if you take it earlier than the full 30 years (25 = 5 years no COLA, 26 = 4 years no COLA, etc.)

But yeah, if I work, say, 25 years but defer the pension until age 60, and then take it with no penalty, what happens with inflation over those 10 years? Because if I have a pension of $30,500.00 coming to me 10 years in the future, the purchasing power of $30.5k sure won't be what it once was.

Would that be a good reason to just go ahead and take the pension ASAP, despite the lower amount?

It might. Once you receive the answer you can run the numbers to compare what the difference would be at age 60 between the one you took now and the one you'd take at 60.  And what the break even amount would be on total income collected, under both scenarios, because you'd be collecting one ten years longer than the other. I would get all of the information before making a decision.

I am very risk adverse and security oriented so I like your work until 2025 option as it would give you a bigger pension, allow your investments to hopefully recover from the recent downturn and hopefully we'd be past the high inflationary environment by then too. But that's just me.  You have to decide what you are most comfortable with.

[GilesMM]

If you really want to spend $75k/yr and your pension at 60 provides $30k/yr then you will be pulling $45k/yr from your savings of $1.35MM which is 3.3% SWR.  Sounds fine. Retire Oct 2023.  You will be pulling $75K (5.5% SWR) for the first ten years but after age 70 SS should kick in, so it may all work out.   The most important thing is you want out, so get out.  Figure the rest out later.

[stasherus-maximus]

Thanks, c-kat. I'll definitely be asking the pension people about inflation. And I'll cobble together another spreadsheet to help check on break even points, etc. These are good ideas. I appreciate it!

I know deep down working until 2025 would be the smartest option. But... not sure how much gas I have left in the tank. I am playing around with other ideas now. I composed my Case Study document a few weeks ago. I probably should have stated another option I've been toying with:

Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

[stasherus-maximus]

Thanks, GilesMM. Yeah, a 75k spend seems like a lot to me. I feel very comfortable right now at around $40k. Pulling 75k per year before taking the pension makes me pretty nervous.

I need to sit down with my wife and see if she is absolutely dead set on spending so much on travel in retirement. If it's just one of those ideas that sounds good when daydreaming, but not a requirement, we could make do on a lot less.

Of the two of us, she is definitely the one with a long list of places she wants to travel. I'm more of a road trip and camping type with some international travel thrown in every few years maybe. Perhaps I can talk her into trimming the travel budget and getting into travel hacking as a hobby.

[YttriumNitrate]

At 48 I’m no youngin’. I have had some health issues in the past. Most of my male relatives have not made it past their early 70’s. I want to make the most of the years I have left ...

I’m having a hard time choosing from the following options:

• A. Retire early at 25/26/27 years in university system (49/50/51 years old) and take the pension penalty hit....
  
• B. Retire early, but wait until 60 to take the pension, penalty-free.

Any advice? I’m really curious to hear what you would in my situation.

Based on what you've indicated, you should not wait until 60 to start drawing your pension.

[c-kat]

Thanks, c-kat. I'll definitely be asking the pension people about inflation. And I'll cobble together another spreadsheet to help check on break even points, etc. These are good ideas. I appreciate it!

I know deep down working until 2025 would be the smartest option. But... not sure how much gas I have left in the tank. I am playing around with other ideas now. I composed my Case Study document a few weeks ago. I probably should have stated another option I've been toying with:

Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

I have a pension where I'm working too and it's a 5 % penalty for every year you retire early.  I did the math and taking it with penalty ends up about the same in total withdrawals as leaving it it, so it make sense to take it early.

[stasherus-maximus]

At 48 I’m no youngin’. I have had some health issues in the past. Most of my male relatives have not made it past their early 70’s. I want to make the most of the years I have left ...

I’m having a hard time choosing from the following options:

• A. Retire early at 25/26/27 years in university system (49/50/51 years old) and take the pension penalty hit....
  
• B. Retire early, but wait until 60 to take the pension, penalty-free.

Any advice? I’m really curious to hear what you would in my situation.

Based on what you've indicated, you should not wait until 60 to start drawing your pension.

Thanks, YttriumNitrate. Yep. I have to remind myself to look beyond spreadsheets and timelines and plans. Life can throw curveballs and nothing is guaranteed. It might not be the best financial option to take the money and run as early as I can, but I am so ready to get out of this damn office, haha.

[stasherus-maximus]

Thanks, c-kat. I'll definitely be asking the pension people about inflation. And I'll cobble together another spreadsheet to help check on break even points, etc. These are good ideas. I appreciate it!

I know deep down working until 2025 would be the smartest option. But... not sure how much gas I have left in the tank. I am playing around with other ideas now. I composed my Case Study document a few weeks ago. I probably should have stated another option I've been toying with:

Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

I have a pension where I'm working too and it's a 5 % penalty for every year you retire early.  I did the math and taking it with penalty ends up about the same in total withdrawals as leaving it it, so it make sense to take it early.

I'm glad you have a pension. There aren't many left these days. Yes, I think I'll probably come to the same conclusion - might not be worth it to wait until 60. Still curious to see what the actual math is though.

[shuffler]

Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

This is exactly what I did last year.  Worked until I felt FIRE was feasible, then told my boss I needed to change my situation, either retire or go part-time and fully remote.  He didn't want to lose me, and the timing was right for the company to consider "flexible" work options to retain people.  So I've been working 3 day weeks from home for about a year now.  It's been glorious to have 4 day weekends, and I also took a month off for international travel.

Anyhow, just wanted to say that it's possible, and I think more people should try it near the end of their careers.  But I do feel that you really should be ready to walk away, and not be bluffing.

[stasherus-maximus]

Thanks for the input, Shuffler. 4 day weekends sound pretty glorious to me too! Part-time plus remote would be something I could probably do for a few more years until my wife retires. Yes, I'd definitely have to wait to request this when I have the option to take the pension if they say no to going part-time. One more year to go!

[zolotiyeruki]

tl;dr: go ahead and retire next year. You have plenty of money.

Fom a numbers standpoint, you're golden.  Here's why I think so:

• You have enough saved up ($1.35m) to support $54k/year of withdrawals (4% WR), just from your own assets
• ...but DW would like to keep working for a few years. Let's assume you retire in 2023, and for simplicity, let's assume her take-home pay covers your spending exactly
• As a result, for the next three years, you don't make any contributions or withdrawals from any of your savings.  They'll continue to grow.  Let's say they grow to $1.7m
• In 2026, DW retires, and you increase your spending to $75k.  On a $1.8m stash, that's a 4.16% withdrawal rate. That's more aggressive than standard, but you're only looking at an 8-year outlook, not the 30-year horizon of the Trinity study.  Let's be super conservative, and assume your accounts will have dropped to $1.4 million at age 60.
• At age 60, the pension kicks in, and now you only have to withdraw $45k/year.  $45k on a $1.4 million stash is a 3.2% WR.  Again, super conservative.

It bears repeating:  you have plenty of money to retire, and little incentive to wait.  If it somehow inexplicably turns out to be too early, well.... as others have said "You can recover from retiring early.  You cannot recover from retiring too late."

On another topic: Are there things you can do to improve your satisfaction at work now?  You can choose not to participate in or care about office politics.  If sitting at a desk is causing you discomfort, can you arrange your workspace differently?  Can you go part-time or work remotely some of the time?

[TyGuy]

Personally, I am a fan of retiring as soon as possible (read 4% withdrawal rate), which should mean that I support you retiring in 2023. Looking at the significant increase in your pension (>25%) for staying 1 more year after October 2023, it may be worth it to hang on until 2024. I would definitely re-evaluate this situation next year: If the job is having a negative impact on your health, it would not be worth staying the extra year as you may be taking several years off of the end of your life. Considering the above, you should definitely negotiate a work from home schedule or see if they would let you drop to part time next year. You will have the position of power beginning in 2023, as you are no longer financially reliant on the job, and you should use it as leverage. Good luck with the decision making, and don't spend to much time worrying about it, regardless of what you pick, you can safely retire! 

[stasherus-maximus]

Thanks for the advice Zolotiyeruki! These are some really good ideas. Much appreciated.

I like this! "You can recover from retiring early.  You cannot recover from retiring too late."

Thanks for looking at my numbers. I like your timeline idea. I've got some big decisions to make. Time to bust out my spreadsheet again!

On another topic: Are there things you can do to improve your satisfaction at work now?  You can choose not to participate in or care about office politics.  If sitting at a desk is causing you discomfort, can you arrange your workspace differently?  Can you go part-time or work remotely some of the time?

I definitely don't participate or care about office politics. But, it's hard to tune out when people rant about everything under the sun, every day, right outside your office door, haha. Headphones help, but don't eliminate the noise entirely. Just one of those office life things I get tired of.

I do have a desk that goes up and down, so I alternate between sitting and standing. It helps, but my injuries have just added up over the years to a point where I can't do this much longer, at least full time.

Definitely thinking about asking for part-time and/or remote work. I'll have to approach this carefully and only ask once I'm in a position to walk away if need be.

[stasherus-maximus]

Personally, I am a fan of retiring as soon as possible (read 4% withdrawal rate), which should mean that I support you retiring in 2023. Looking at the significant increase in your pension (>25%) for staying 1 more year after October 2023, it may be worth it to hang on until 2024. I would definitely re-evaluate this situation next year: If the job is having a negative impact on your health, it would not be worth staying the extra year as you may be taking several years off of the end of your life. Considering the above, you should definitely negotiate a work from home schedule or see if they would let you drop to part time next year. You will have the position of power beginning in 2023, as you are no longer financially reliant on the job, and you should use it as leverage. Good luck with the decision making, and don't spend to much time worrying about it, regardless of what you pick, you can safely retire!

Thank you for the reassuring words and advice, TyGuy! I'm really looking forward to October 2023 when I get to that "position of power". Almost a bit too much. I have to constantly remind myself to live in the present and have some fun along the way.

Yes, October 2023 will be a time of re-evaluation and reflection. A lot can happen between now and then. I'm guessing I won't want to work full-time for OMY at that point. But we'll see what the markets and stash dictate.

But I do like the idea of going part-time. Do some work in the mornings. Get paid enough to cover the bills, leaving the stash to grow/recover, and then afternoons for exercise and hobbies. That would be a much better work life balance for me. Sounds pretty damn good to me.

[uniwelder]

Thanks, GilesMM. Yeah, a 75k spend seems like a lot to me. I feel very comfortable right now at around $40k. Pulling 75k per year before taking the pension makes me pretty nervous.

I need to sit down with my wife and see if she is absolutely dead set on spending so much on travel in retirement. If it's just one of those ideas that sounds good when daydreaming, but not a requirement, we could make do on a lot less.

Of the two of us, she is definitely the one with a long list of places she wants to travel. I'm more of a road trip and camping type with some international travel thrown in every few years maybe. Perhaps I can talk her into trimming the travel budget and getting into travel hacking as a hobby.

If travel style is negotiable, it doesn't have to cost a huge amount.  Also, its possible she will get burned out on the most costly types of travel after a couple of years once she's crossed off places from her must see bucket list.  Some travel hacking methods you might want to suggest to your wife----

1) Work in a national park for a few months.  Get room +board, have some free time to explore the park, plus get some extra pay.  @NotJen wrote about her experiences doing this in two different journals here.

2) House sit for people at cool destinations.  You can stay at someone's house for free while taking care of their pets, with durations of anywhere from a few days, a week, a month, a few months.  My wife and I signed up for trustedhousesitters.com, which started in the UK, so there are tons of places available over there.

3) The travel van you previously mentioned doesn't have to cost a ton.  You could buy a used minivan and take out all the rear seats for sleeping, then equip it with essentials.

4) Travel to cheaper countries.  My wife is from Mexico, so when we're visiting there, the dollar goes pretty far.  Hotels cost us $20-30/night and a nice dinner for two might be $20-30 as well.  Airfare is usually the main driver of the cost of the trip if we don't have credit card points to cover it.

[dandarc]

Just chiming in as another "there's no financial reason for you to keep working beyond that 10/23 date when you're eligible for your pension".

So, like if you want to stop working and your wife is OK with it, then stop. She could too actually - this all reads like joint money. I know getting that 2nd pension is a pretty big carrot, but with what you've managed to accumulate it isn't a requirement.

I know the math says to likely take the pension as soon as you can and invest more or draw less, but with COLA and the penalty I'd be tempted to wait as another form of longevity insurance in addition to the social security. But you're in great shape so there's no bad answers here besides working substantially longer than you want to.

[stasherus-maximus]

If travel style is negotiable, it doesn't have to cost a huge amount.  Also, its possible she will get burned out on the most costly types of travel after a couple of years once she's crossed off places from her must see bucket list.  Some travel hacking methods you might want to suggest to your wife----

1) Work in a national park for a few months.  Get room +board, have some free time to explore the park, plus get some extra pay.  @NotJen wrote about her experiences doing this in two different journals here.

2) House sit for people at cool destinations.  You can stay at someone's house for free while taking care of their pets, with durations of anywhere from a few days, a week, a month, a few months.  My wife and I signed up for trustedhousesitters.com, which started in the UK, so there are tons of places available over there.

3) The travel van you previously mentioned doesn't have to cost a ton.  You could buy a used minivan and take out all the rear seats for sleeping, then equip it with essentials.

4) Travel to cheaper countries.  My wife is from Mexico, so when we're visiting there, the dollar goes pretty far.  Hotels cost us $20-30/night and a nice dinner for two might be $20-30 as well.  Airfare is usually the main driver of the cost of the trip if we don't have credit card points to cover it.

Thanks, UniWelder. These are great ideas. Honestly, I think she would really enjoy travel hacking if she got into it. She already loves travel planning, and hacking could just be another fun "gamified" part of that. I'll look into trustedhousesitters.com. That sounds like a great resource!

[stasherus-maximus]

Just chiming in as another "there's no financial reason for you to keep working beyond that 10/23 date when you're eligible for your pension".

So, like if you want to stop working and your wife is OK with it, then stop. She could too actually - this all reads like joint money. I know getting that 2nd pension is a pretty big carrot, but with what you've managed to accumulate it isn't a requirement.

I know the math says to likely take the pension as soon as you can and invest more or draw less, but with COLA and the penalty I'd be tempted to wait as another form of longevity insurance in addition to the social security. But you're in great shape so there's no bad answers here besides working substantially longer than you want to.

Thanks for the input, dandarc. That's an interesting idea. We've been so focused on both of us reaching the point where we could take our pensions. She has new position that she's pretty happy in, so I don't think she dreads work as much as me right now. But that could always change.

But yeah, that 2nd pension is a huge carrot. If we both had pension payments, we could get our stash draw down below 4%, which would be awesome.

I know we'll just have to eventually decide how to play this, but it is very reassuring to hear from MMM vets that we're in good shape. When it's just me looking over the spreadsheets I always feel like I must be missing something. It's great to get outside feedback and advice.
 

[zolotiyeruki]

On another topic: Are there things you can do to improve your satisfaction at work now?  You can choose not to participate in or care about office politics.  If sitting at a desk is causing you discomfort, can you arrange your workspace differently?  Can you go part-time or work remotely some of the time?

I definitely don't participate or care about office politics. But, it's hard to tune out when people rant about everything under the sun, every day, right outside your office door, haha. Headphones help, but don't eliminate the noise entirely. Just one of those office life things I get tired of.

I do have a desk that goes up and down, so I alternate between sitting and standing. It helps, but my injuries have just added up over the years to a point where I can't do this much longer, at least full time.

Definitely thinking about asking for part-time and/or remote work. I'll have to approach this carefully and only ask once I'm in a position to walk away if need be.

Maybe I missed this, but is your combined pension $30k/year, or will each of your pensions be worth $30k/year?  And does the same withdrawal timing apply to your wife's pension, i.e. full amount available at age 60?

I want to make something perfectly clear:  you have FU money.  Realistically, you don't actually need your pension, if you live a slightly-less-than-full-fat-FIRE lifestyle.  The sooner you realize that, the sooner you'll realize that you are not a slave to it, and the happier you'll be.  You are already in a position of power.  And that gives you the freedom to shape your work in ways that will improve your enjoyment.  Take a nap during lunch?  Sure.  Decorate your office with RGB LEDs so you can set whatever mood you like? Go ahead!  Bring in plants to improve your mood.  Pointedly close your office door when your whiny coworkers start ranting (or just ask them to keep it down).  Go for a few walks during the day.  Speak your mind, defend others who are being mistreated, call out poor management (or employees).  Demand an office with a window--after all, with nearly 25 years under your belt, you ought to have one by now!  Who cares if you offend someone?  What are they going to do?  Fire you, so you can go off and live the life you've always wanted?

[dandarc]

Seconding what @zolotiyeruki wrote, plus I'm personally partial to the Collins version of that clip. https://jlcollinsnh.com/2016/03/19/f-you-money-john-goodman-v-jlcollinsnh/

[Holocene]

C. Work until October 2023 and be prepared to take the pension. But, ask for remote work or part-time or a combination. I could probably do that a couple more years and stay sane. And it would allow the stash time to recover from the down markets, and time for inflation to cool, hopefully. But if my bosses say "No", I could always leave and figure things out as I go.

I'd go for Option C, or just retire in Oct 2023.  If you do continue to work, I'd highly recommend taking a sabbatical to be off completely for a bit.  You're in great shape and you sound pretty burned out.  I was in this same place and it's amazing how much better I feel after 6 months without work.  It really brings a new perspective.  I think we all spend too much time focusing on the risk of running out of money instead of the risk of running out of time.  Most likely, you'll be completely fine.  But if things aren't working out, you have a decent amount of fat to trim from your budget (ie. stop travelling for a few years) or you can find a part-time job for a bit.  I feel like taking a small risk of needing to do one of these things is completely worth getting free from a job you don't currently like very much.

I was originally planning to quit for good this past spring.  But I ended up negotiating a part-time job with my company that I think I might like.  And I told them I needed 6 months off.  I was just so mentally done and needed the time to decompress.  Best thing I could've done and I'd 100% recommend it to anyone feeling similarly burnt out.  But I will admit, going back to work at the end is indeed HARD!  I just finished my 2nd week back.  I'm only working 20 hours a week, so it's not terrible.  But compared to 0 hours, it's an adjustment!  This week I started working on a project and it has actually been pretty fun.  The hardest part to adjust to is just losing the complete freedom and flexibility I had all summer.  It'll take some getting used to.  But I have 4 day weekends every week and can't complain too much.  Since I'm still young, it seems like it's still worth the trade-off for now.  I don't think I could go back to full-time work at this point though.  The extended time off allowed me to see how much energy my job had been sucking out of me.  I'm trying to be more mindful now and keep things balanced and do this on my terms.

My main point is that giving yourself some time away from work could probably give you a new perspective and some clarity to allow you to make better long-term decisions.  It's hard when you're in the thick of it to be able to see clearly what the best option is.  You're in great shape, so you can take a step away, enjoy yourself, and figure out from there what the next best step is for you.  It doesn't necessarily have to be an all-or-nothing decision right now.

I know deep down working until 2025 would be the smartest option. But... not sure how much gas I have left in the tank.

Keep in mind, the smartest option isn't always the one that gives you the most money in the end.  I'd say it's the one that prioritizes your health and happiness.

[stasherus-maximus]

Maybe I missed this, but is your combined pension $30k/year, or will each of your pensions be worth $30k/year?  And does the same withdrawal timing apply to your wife's pension, i.e. full amount available at age 60?

I want to make something perfectly clear:  you have FU money.  Realistically, you don't actually need your pension, if you live a slightly-less-than-full-fat-FIRE lifestyle.  The sooner you realize that, the sooner you'll realize that you are not a slave to it, and the happier you'll be.  You are already in a position of power.  And that gives you the freedom to shape your work in ways that will improve your enjoyment.  Take a nap during lunch?  Sure.  Decorate your office with RGB LEDs so you can set whatever mood you like? Go ahead!  Bring in plants to improve your mood.  Pointedly close your office door when your whiny coworkers start ranting (or just ask them to keep it down).  Go for a few walks during the day.  Speak your mind, defend others who are being mistreated, call out poor management (or employees).  Demand an office with a window--after all, with nearly 25 years under your belt, you ought to have one by now!  Who cares if you offend someone?  What are they going to do?  Fire you, so you can go off and live the life you've always wanted?

Yep. If I have 25 years of credit and wait until 60 to take it, my pension would be ~31.5k. My wife's pension would be a similar amount (she caught up to my salary recently), and exact same withdrawal timing, assuming she reaches the same amount of credits/years. So, roughly $60k if we both have 25 years/credits, and wait to take pension at 60. We're pretty damn fortunate to have those pensions.

I guess the unpredictable thing is inflation. If we each wait until 60 to take it, there is a COLA moving forward from there, so that's good. But, I guess if the delayed pension amount is set at $31.5k in 2023, by the time I reach 60 in 2034 and can claim it, who knows how much purchasing power will be eroded from that $31.5k. I have made a spreadsheet where I can plug in different amounts of inflation each year, but it's only a guess, of course.

I need to check with the pension people to see if it works like that or if there's some "behind the scenes" COLA while you wait for age 60 to roll around. My guess is there is no COLA until you actually take it at 60.

Zolotiyeruki and @dandarc - I love these videos, and especially the JL Collins one (his book is incredible and I recommend it all the time)!

I think we're going to sit down this weekend and try and trim a bunch of fat from our retirement budget spreadsheet. I want to get realistic about how much we're actually going to travel. With air travel being the main cost, I'd like to do a year or two of slow travel once we are both retired and get it out of our system, so to speak. Big flight once, and then rely on small hop flights, trains, busses to get around. Maybe rent out the house while we're gone. In the meantime, do smaller camping trips and maybe twice a year trips to regional beaches and mountains. Tough thing about slow travel is what to do with pets though. If my wife is agreeable to something along those lines, I think the travel budget could be drastically reduced.

You're right Zolotiyeruki, I need to do all that stuff. Good ideas. Plants, walks, speaking up, etc. I am already starting a rough draft of a white paper to try and make meetings shorter and a bit more fun, hehe. We'll see how that goes over.

[stasherus-maximus]

I'd go for Option C, or just retire in Oct 2023.  If you do continue to work, I'd highly recommend taking a sabbatical to be off completely for a bit.  You're in great shape and you sound pretty burned out.  I was in this same place and it's amazing how much better I feel after 6 months without work.  It really brings a new perspective.  I think we all spend too much time focusing on the risk of running out of money instead of the risk of running out of time.  Most likely, you'll be completely fine.  But if things aren't working out, you have a decent amount of fat to trim from your budget (ie. stop travelling for a few years) or you can find a part-time job for a bit.  I feel like taking a small risk of needing to do one of these things is completely worth getting free from a job you don't currently like very much.

I was originally planning to quit for good this past spring.  But I ended up negotiating a part-time job with my company that I think I might like.  And I told them I needed 6 months off.  I was just so mentally done and needed the time to decompress.  Best thing I could've done and I'd 100% recommend it to anyone feeling similarly burnt out.  But I will admit, going back to work at the end is indeed HARD!  I just finished my 2nd week back.  I'm only working 20 hours a week, so it's not terrible.  But compared to 0 hours, it's an adjustment!  This week I started working on a project and it has actually been pretty fun.  The hardest part to adjust to is just losing the complete freedom and flexibility I had all summer.  It'll take some getting used to.  But I have 4 day weekends every week and can't complain too much.  Since I'm still young, it seems like it's still worth the trade-off for now.  I don't think I could go back to full-time work at this point though.  The extended time off allowed me to see how much energy my job had been sucking out of me.  I'm trying to be more mindful now and keep things balanced and do this on my terms.

My main point is that giving yourself some time away from work could probably give you a new perspective and some clarity to allow you to make better long-term decisions.  It's hard when you're in the thick of it to be able to see clearly what the best option is.  You're in great shape, so you can take a step away, enjoy yourself, and figure out from there what the next best step is for you.  It doesn't necessarily have to be an all-or-nothing decision right now.

I know deep down working until 2025 would be the smartest option. But... not sure how much gas I have left in the tank.

Keep in mind, the smartest option isn't always the one that gives you the most money in the end.  I'd say it's the one that prioritizes your health and happiness.

Thanks, Holocene. Wise words!

"I think we all spend too much time focusing on the risk of running out of money instead of the risk of running out of time."

I worry more about the running out of time part, usually. Seems the closer I get to FIRE, the more I worry about not getting across the finish line due to illness, car wreck, etc. Reading philosophy helps. I realize I have little control over those things, beyond ordinary precautions. I also have to force myself to enjoy the present and realize retirement won't solve everything. But at least I'll have more time and energy to work on improving physical and mental health.

A sabbatical sounds good. I'm glad it's working for you. Sounds like you're in a good place. You're right, when you're in the thick of it, and burnt out, it's difficult to know what the right decisions are. You just want to get the hell out. But, I also agree that it doesn't have to be all or nothing decision. And I'm starting to like the idea of a gradual retirement. Cutting back to part-time, eliminating pain points at work, and just catching by breath for a while. Then fully retire when my wife is eligible for retirement.

[stasherus-maximus]

A not-so-quick update in case anyone is interested. Also, just thinking out loud and writing down my thoughts to get a handle on things.

I'm still really struggling with burnout. Got the flu on Christmas Eve, which then turned into bronchitis. Burned through a good amount of leave time. In fact, I'm still coughing like crazy but I’m back at the office. So, feeling horrible and having several big work projects coming up in 2023 doesn't exactly help the burnout, haha.

I'm seriously contemplating going ahead and resigning. I even have my resignation letter written. Just can't seem to work up the courage to pull the trigger.

Financial recap:

Me - 48, DW - 46.
We have slightly over $1.4m in liquid investments
We will each receive ~$30k (~$60k total) in state university pensions at age 60.
Current spending - ~$40-45k
Ideal retirement spending - $60-65k (extra spending = ACA healthcare, travel, hobbies, taxes, etc.)

My wife will work for 2 more years after I retire, whenever I decide to (just a deal we had worked out a long time ago since I started working 2 years before she entered the workforce). So, our investments won’t be touched for at least 2 more years, hopefully.

$1.4 x 3.5% SWR = $49,000
$1.4 x 4% SWR = $56,000

So, not quite at the Ideal Retirement Spending level yet. But not bad.

If I do OMY and we invest our usual $55k per year, assuming a 6% return, we could get to around $1.5m something. Big maybe, of course. Maybe we get 0% or negative returns in 2023.

$1.5 x 3.5% SWR = $52,500
$1.5 x 4% SWR = $60,000

Another scenario. If I retire now and my wife keeps working for 2 years, the stash could (potentially) grow untouched for 2 years. We might could squeeze out $25,000 annually for investing during those two years.

$1.4m / $25,000 invested for 2 years / @ 5% return
$1,619,362.50

$1.6 x 3.5% SWR = $56,000
$1.6 x 4% SWR = $64,000

Getting closer to the Ideal Retirement Spending level. But who knows what the markets will do?

I feel like I might be okay retiring now. I received good advice and assurances from posters in this thread. But I guess I’m still a bit worried about walking away during a down market, high inflation, etc. Plus, my salary is the highest it’s ever been and it feels weird to leave that new extra money on the table. Classic case of One More Year-ism perhaps.

I guess we could spend a bit more than 4% SWR if we have pensions waiting, but it just feels risky to deplete our stash in those pre-pension gap years. I know the pensions are probably pretty safe at a state university, but in the back of my mind I worry about all the worst-case scenarios and want to keep our stash at a 4% SWR. Ideally, a 3.5% SWR.

Maybe I’ll just have to suck it up and work another year or two to get to that Ideal Retirement Spending level.

Or, I take a sabbatical, recharge, and find some more fulfilling work, albeit at a potentially lower salary. Work for a couple years to top off the tank, and then fully retire.

Would be interested to hear opinions, or what you would do in my situation. Perhaps you faced a similar dilemma during your near-FIRE years.

Thanks for reading!

[Omy]

Thanks, GilesMM. Yeah, a 75k spend seems like a lot to me. I feel very comfortable right now at around $40k. Pulling 75k per year before taking the pension makes me pretty nervous.

I need to sit down with my wife and see if she is absolutely dead set on spending so much on travel in retirement. If it's just one of those ideas that sounds good when daydreaming, but not a requirement, we could make do on a lot less.

Of the two of us, she is definitely the one with a long list of places she wants to travel. I'm more of a road trip and camping type with some international travel thrown in every few years maybe. Perhaps I can talk her into trimming the travel budget and getting into travel hacking as a hobby.

If travel style is negotiable, it doesn't have to cost a huge amount.  Also, its possible she will get burned out on the most costly types of travel after a couple of years once she's crossed off places from her must see bucket list.  Some travel hacking methods you might want to suggest to your wife----

1) Work in a national park for a few months.  Get room +board, have some free time to explore the park, plus get some extra pay.  @NotJen wrote about her experiences doing this in two different journals here.

2) House sit for people at cool destinations.  You can stay at someone's house for free while taking care of their pets, with durations of anywhere from a few days, a week, a month, a few months.  My wife and I signed up for trustedhousesitters.com, which started in the UK, so there are tons of places available over there.

3) The travel van you previously mentioned doesn't have to cost a ton.  You could buy a used minivan and take out all the rear seats for sleeping, then equip it with essentials.

4) Travel to cheaper countries.  My wife is from Mexico, so when we're visiting there, the dollar goes pretty far.  Hotels cost us $20-30/night and a nice dinner for two might be $20-30 as well.  Airfare is usually the main driver of the cost of the trip if we don't have credit card points to cover it.

It looks like you can quit any time. When we FIREd, we completely overestimated our FIRE budget. Our actual spend turns out to look very similar to our pre-FIRE spend...but where we spend our money has changed.

I wanted to tag onto uniwelder's post. If DW wants to travel more (or differently) than you do, she could always go with a friend or family member instead of with you (which would reduce your travel costs by 50% without stifling her interest in travel.)

If she wants to do tons of travel, she should consider becoming a part time travel agent. A friend of mine does this and gets all kinds of free/inexpensive travel deals because of her agent discounts and perks.

After FIRE, you will have so much more time and mental bandwidth to optimize spending...and so much more time to cc and travel hack.

Jump now and don't look back.

[zolotiyeruki]

The 3.5-4% withdrawal rate assumes that your $1.4M is your only source of income, and must last 30 years. Neither of those apply to you. Once you hit 60, your pensions will cover all your spending.  Your $1.4M only has to last until then.

You could literally put all your assets in cash, and spend $100k/year between now and age 60, and still not exhaust your assets.

Let me make it clear: you have more than enough to retire today. Hand that resignation letter in ASAP and enjoy your hard-won freedom.

[stasherus-maximus]

Thanks, folks. Y'all have some good points. It helps to hear this.

I realize I have a very thick head, haha. Maybe it will eventually sink in. I guess it's just a mental thing at this point. Switching from accumulation phase to spending phase is tougher than I thought.

If I had read a similar story years ago I probably would have said - what are you waiting for? Retire! But I totally get the hesitancy and OMY stories now. It's pretty intimidating to start a new phase. Maybe it'll click soon and I'll hand in that resignation letter.

I'll go read some OMY threads now. :-)

Thanks again for the reassurance and advice! I'll report back when I hand in that letter!

[Dicey]

Get the fuck out and take your wife with you. Screw the "deal" you made. You have plenty. Call it a sabbatical if you wish, but get moving.

[stasherus-maximus]

Hahaha! Thanks for the advice and lack of sugarcoating, Dicey. My wife got a very good laugh out of this one.

[Omy]

Here's the one where I got my facepunches:

https://forum.mrmoneymustache.com/post-fire/serious-'one-more-year'-syndrome-advice-appreciated/

[iluvzbeach]

@stasherus-maximus, as others have said (and just in case you need yet more reassurance) you are in a great position to FIRE, take a sabbatical or cut back to part-time NOW.  I am just a few years older than you and very much struggled with the same concerns, with the toughest issue for me being switching things from saving piles of money every year to turning that around to spending from our stash.  I FIREd a few months back and was literally terrified right up until I walked out the door on my last day.  This is no joke but from the moment I left, that fear melted away.  It has not been an issue at all.  I suspect that the most difficult part of actually FIREing is this piece and once you can get past that, it's much easier.  By the way, 2+ months in now and I haven't regretted it for a single moment.  Not one.

[Beach_Bound]

I agree with all the posters telling you that it’s ok to stop now. Here's some extra numbers-based encouragement.

I modeled your situation in cfiresim (an excellent financial simulator that uses historical stock/bond/inflation data). The web address is cfiresim.com. I used the inputs below:

Retire in 2023
Portfolio value: 1.4 million
yearly spending: 65,000 (inflation adjusted)
Portfolio: 95% equities, 5% bonds
SS #1 (your pension): 30,000, starting in 2035, inflation adjusted
SS #2 (wife’s pension): 30,000, starting in 2037, inflation adjusted

In the very worst case historical scenario, you end with 1.1 million after 30 years of retirement. On average, you’ll have over 4 million after 30 years. And this is conservative – it assumed you spend 65,000 every single year, starting immediately, regardless of what the market is doing, and it does not include social security or any potential inheritance.

So I'll echo everyone else in saying you're fine to quit now. You're fine if both you and your wife quit now and never earn another penny.

[stasherus-maximus]

Thanks for the link, Omy! I just finished reading the whole thread. Great conversation and advice in there. Really neat to read your updates too. Glad things are going well for you and your husband in retirement.

Thanks, iluvzbeach. I hope the fear melts away for me too. I have visions of myself waking up in the middle of the night all the time, worried about having "enough", or feverishly pouring over spreadsheets at every market hiccup. Probably won't happen. Just a fear, that's all.

Thanks for doing that, Beach_bound! I appreciate it. I've played with firecalc and the rich broke or dead calc. They seem to indicate success. Ran the numbers with my wife too and it helped give her more confidence as well. She's also read this thread and gotten encouragement from responses. It all helps. Thanks!

I think I'm slowly getting there. This week I'll probably talk to my supervisor about various options. Sabbaticals, part-time, remote work, etc. Or maybe I'll just turn in that letter and GTFO, haha.

[Sandi_k]

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

[Must_ache]

So you have $1.351M of assets, let me go ahead and pay off your mortgage.  Now you have $1.229M and at a 3.5% withdrawal rate you can enjoy $43K per year.
If you take the pension right away, that's another $19.8K but we don't yet know if that adjusts for inflation.  If your wife were able to match that $19.8K you would be looking at $82.6K per year which would cover all your expenses.

The 3.5% assumption is conservative.  But there is a concern that inflation could eat away at your pensions.  If inflation is 3%/yr for the next 20 years and those pensions don't go up, your purchasing power would erode from $82.6K to $64.9K. 

I would be tempted to work one more year.  You get $6K more per year on your age-50 pension for an estimated 31.8 years using a basic life expectancy - a nominal value of about $190K.  If you assume 3% inflation that is worth about $130K in today's dollars.  Just go to work telling yourself I'm not making $68K this year, I'm making almost $200K.  That could buy a lot of inflation protection.

You're in a pretty good situation.  I don't doubt that you would have a decent retirement.  It might be nice to also work another year and see how investments and the economy play out.  If you put a price on that extra year though, its a pretty big number.  Think about the dollar amount and ask yourself is it worth it to me?  Eventually it won't be, maybe a year from now, or three years from now.  Is it worth sticking around one more year for an extra $130K?     

[JupiterGreen]

Get the fuck out and take your wife with you. Screw the "deal" you made. You have plenty. Call it a sabbatical if you wish, but get moving.

Yes this! I'm impressed you saved this much and also contributed to a pension (or is that just your employer who does that?). Plus you might have some SS too. Your pensions alone will cover your COL. I had a parent die the year they retired (in their 60s). You've got the funds, as Dicey said GTFO now.

[uniwelder]

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

We'll be in the same situation pretty soon, once my wife quits work.  I was curious about our potential cost and looked up an example of what OP might pay as well.  For a married couple, each aged 55, making 70k/year, monthly premium might be about $500/month after receiving almost $900/month in subsidies.  In another example, a married couple, aged 50+48, making 50k/year, monthly premium could be about $0-$400/month after subsidies. OP is currently pays $300/month, so health insurance cost doesn't really impact their situation much.

[Sandi_k]

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

We'll be in the same situation pretty soon, once my wife quits work.  I was curious about our potential cost and looked up an example of what OP might pay as well.  For a married couple, each aged 55, making 70k/year, monthly premium might be about $500/month after receiving almost $900/month in subsidies.  In another example, a married couple, aged 50+48, making 50k/year, monthly premium could be about $0-$400/month after subsidies. OP is currently pays $300/month, so health insurance cost doesn't really impact their situation much.

Right - but the ACA thresholds are different through 2024.

What will they be after the Covid extensions are done?

[dandarc]

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

We'll be in the same situation pretty soon, once my wife quits work.  I was curious about our potential cost and looked up an example of what OP might pay as well.  For a married couple, each aged 55, making 70k/year, monthly premium might be about $500/month after receiving almost $900/month in subsidies.  In another example, a married couple, aged 50+48, making 50k/year, monthly premium could be about $0-$400/month after subsidies. OP is currently pays $300/month, so health insurance cost doesn't really impact their situation much.

Right - but the ACA thresholds are different through 2024.

What will they be after the Covid extensions are done?

They'll be lower for some, but I have to believe the worst case is simply going back to the old way with the 400% FPL cliff, which is almost $70K for a 2 person household. Might be a small change due to change in percentages, but I don't think would be catastrophic in that 50-70k AGI range. Would be something to keep an eye on of course, because that 400 percent of FPL line is one of those where $1 excess income can cost you many thousands of dollars in PTC.

ETA: plus, this change has been needed for a decade - I doubt many republicans even want to stand in the way of making it permanent. Interesting that now that more people are used to it, the ACA is thought more highly of almost everywhere.

[stasherus-maximus]

Hey Folks! I decided to go ahead and pull the plug! I'm leaving at the end of February. Already had the talk with my boss. Right now I'm just telling people I'm taking a sabbatical of maybe six months to a year to figure out what I want to do next. But, I'm probably just going to stay retired. ;-)

Thanks to all of you for the great advice and information in this thread. And also for the encouragement to make the leap. I really appreciate it! Good luck to you in your FIRE journeys and retirements as well.

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

Hi Sandi_k, yep, I'll be covered by my wife starting in March. If she works a couple more years she (we, on a family plan) will be covered in retirement. If she decides to stop working before that point our plan is to find some ACA coverage.

So you have $1.351M of assets, let me go ahead and pay off your mortgage.  Now you have $1.229M and at a 3.5% withdrawal rate you can enjoy $43K per year.
If you take the pension right away, that's another $19.8K but we don't yet know if that adjusts for inflation.  If your wife were able to match that $19.8K you would be looking at $82.6K per year which would cover all your expenses.

The 3.5% assumption is conservative.  But there is a concern that inflation could eat away at your pensions.  If inflation is 3%/yr for the next 20 years and those pensions don't go up, your purchasing power would erode from $82.6K to $64.9K. 

I would be tempted to work one more year.  You get $6K more per year on your age-50 pension for an estimated 31.8 years using a basic life expectancy - a nominal value of about $190K.  If you assume 3% inflation that is worth about $130K in today's dollars.  Just go to work telling yourself I'm not making $68K this year, I'm making almost $200K.  That could buy a lot of inflation protection.

You're in a pretty good situation.  I don't doubt that you would have a decent retirement.  It might be nice to also work another year and see how investments and the economy play out.  If you put a price on that extra year though, its a pretty big number.  Think about the dollar amount and ask yourself is it worth it to me?  Eventually it won't be, maybe a year from now, or three years from now.  Is it worth sticking around one more year for an extra $130K?     

Hi Must_ache, I decided to leave, so I won't be able to get the pension until 60. It will be penalty-free and cost of living adjusted at that point though (2 pensions, both @ ~ 30k a piece). If I took it in October 2023 it would have been cut down to about 2/3 value (~ 20k) and no COLA's for the first five years. Our plan is to bridge the gap with our personal savings until we're 60.

Yeah, I was tempted to work OMY, but just couldn't do it. I'm toast!

Yes this! I'm impressed you saved this much and also contributed to a pension (or is that just your employer who does that?). Plus you might have some SS too. Your pensions alone will cover your COL. I had a parent die the year they retired (in their 60s). You've got the funds, as Dicey said GTFO now.

Hi JupiterGreen, yep, it's a state university pension. It's mostly the employer. I guess it makes up for lower salaries. They take a chunk from my paycheck every month but it's not huge. Should have some SS too. I'm GTFO-ing at the end of the month! ;-)

The one items folks are not bringing forward is healthcare.

Can you move to your wife's coverage? And will her coverage extend into your retirement, when you are both pre-Medicare?

We'll be in the same situation pretty soon, once my wife quits work.  I was curious about our potential cost and looked up an example of what OP might pay as well.  For a married couple, each aged 55, making 70k/year, monthly premium might be about $500/month after receiving almost $900/month in subsidies.  In another example, a married couple, aged 50+48, making 50k/year, monthly premium could be about $0-$400/month after subsidies. OP is currently pays $300/month, so health insurance cost doesn't really impact their situation much.

Hi uniwelder, yes, I think ACA should be pretty comparable to what we pay now, give or take $1-200. We're crossing our fingers ACA stays relatively stable. My wife might also decide to stay on at the university until the point she can get coverage (for both of us - family plan) in retirement. Something like 2-3 years. She's pretty happy at work right now, but you never know.

[zolotiyeruki]

Congrats on building up the motivation to pull the plug!  Please make sure to follow up in this thread and tell us all about how glorious your retirement is :)

[Dicey]

Congratulations!!! If your wife likes her work, it might be worth it to figure out ways to support her so she hits the target with less stress, which has a direct benefit for both of you. Use your early FIRE years to scratch some local itches, so that when she retires you can do whatever you want together. Or, just pull the plug and go the ACA route.

After you take plenty of time to decompress, of course. Lots of info on that process in the Post-FIRE section.

Welcome to the rest of your life!

[Turtle]

April 2025 = University healthcare coverage for pre-65 employees can continue.

Have you worked out what the value of this benefit is?  Will your wife hit that mark while she is continuing to work?

Obviously, as long as one of you has hit that, you do not both need to.  (Depending on whether or not that coverage continues in work case scenarios)

ACA health plans depend upon your location, so it may take some additional research to determine what those costs would be in your area for full comparison purposes.

Also - regarding the pain from sitting at the desk - it may be worth talking with your HR/Facilities folks regarding the possibility of a standing/adjustable height desk

[lhamo]

I didn't see this thread until now, when it might be too late, but could you classify any of your "sabbatical" as FMLA leave due to your health issues?  Gives you slightly more protection and may let you pad the pension clock with a few extra months.

Also, are there any options for coming back as temp coverage within your university system?  I met with a friend last week who is coming up on her 30 year date, and that is one thing she is probably going to do to pad the stash a little bit.  She works at the university hospital and knows when/what they need people for at the busier times of year.

[stasherus-maximus]

Congrats on building up the motivation to pull the plug!  Please make sure to follow up in this thread and tell us all about how glorious your retirement is :)

Thanks, zolotiyeruki! Will do!

Thank you, Dicey! I've told her a few times already that if she wants to keep working, her last couple years will be some of the easiest outside of work. I'll be doing most of the chores, shopping, cooking, etc. Yep, we'll still be doing plenty of camping and regional beach and mountain trips.

Hi Turtle, the plan right now is to have her insurance cover both of us. She has a chance to hit that mark in the next couple of years. We need to update her timeline spreadsheet to see the exact month though. We'll be doing more in-depth research on ACA plans, for sure, in the meantime. We did some digging a couple years ago and liked what we saw. But I'm sure we need to keep an eye out for updates and changes to those plans as well as potential legislation coming down the pipe. Might be a new retirement hobby of mine, haha.

Oh, I already have a desk that raises and lowers. Still in pain though most of the day. Just old injuries and things. It's all added up. I'm leaving at the end of the month though! And then I'll be able to dive into all sorts of physical therapy and mobility drills throughout the day instead of being tied to a desk and chair.

Hi, lhamo. Those are interesting ideas, for sure. Thank you. I've been discussing a few things like this with my supervisor. We'll see what shakes out. Might be too late for the FMLA though.

[Must_ache]

Hi Must_ache, I decided to leave, so I won't be able to get the pension until 60. It will be penalty-free and cost of living adjusted at that point though (2 pensions, both @ ~ 30k a piece). If I took it in October 2023 it would have been cut down to about 2/3 value (~ 20k) and no COLA's for the first five years. Our plan is to bridge the gap with our personal savings until we're 60.

Yeah, I was tempted to work OMY, but just couldn't do it. I'm toast!

OK well good for you.  It does help that the pension plan is cost-of-living adjusted at some point.  When my mom was nearing retirement as an elementary school teacher's aide she would ask me in those later years if I thought she should work another year, and I would generally say yes.  She enjoyed her job, but eventually after a couple years of that when she came around to asking me again she was noticeably more reluctant to continue and it definitely sounded to me like the time was right, so I encouraged her to stop and I think it all worked out for the best.  In the meantime she was able to increase her SS, 401k, pension, etc. and she enjoys a modest but comfortable retirement. 

If it isn't worth hanging around to collect about $200K from your job anymore, then it really must not be worth it to you, and I'm not going to spend a second disagreeing with you.  Personally I have $1.3M and would like to retire with $1.5M.  I'm definitely planning to stick around until Jan2026 in which case I will become "rule of 55" eligible.  I haven't yet reached the point where I want to half-time or eliminate my paycheck, but I know the day is much closer than it was a few years ago.