FI with pension but little savings

[Morekalian]

Hi everyone, looking for opinions on being FI/retired with income, but little saved.

I'm retired from the military with about $3K a month take home in pension, which leaves about 1K per month after expenses (can be trimmed to be better), but I've only got about $10K saved.

I'm still working a normal job, and can bank the entire check, but I'm tired of the job and would like to resign and enjoy my time.

I think my main concern is what would happen if a large unexpected expense came up and I couldn't cover it.  Maybe like on one of the youtube interviews with MMM, he called it 'one more year syndrome', I can bank 3.5k or so a month, but I'm sick of the job.

What do you think, take the leap and enjoy, or bank more first?

[dandarc]

So you just recently retired, right?  Because if you've had this $3K pension check coming in and you've been retired for a significant amount of time, your expenses are probably higher than you think they are, as evidenced by only $10K saved up.  Basically, if you've been retired for more than 6-12 months, the numbers you're presenting don't make sense, so double-check the numbers.

If your expenses are really $2K / month, and you're pretty sure you can stick to that budget going forward, I'd be fine with quitting - $12K per year will add up pretty quickly to give you more buffer for large unexpected things.  Also be fine with continuing to work or cutting back to part time until you're more comfortable with the amount of your 'stache.

[BuzzardsBay]

Why don't continue working for a year to save as much as possible and then quit?  Set a goal of 12/31/16 and go for it.  After that you can do whatever you want, even work part-time doing something you really enjoy if you want to.  That way you have more in savings and will feel better about doing it.

If you decide between now and the end of the year you can always leave then instead of waiting till December.  But at least you will have more saved which may make you feel better.

[dandarc]

Also - check out http://the-military-guide.com/

Nords has put together a guide specific to military early retirement.  So good place for info specific to your pension.

[Morekalian]

The initial numbers probably seem off because I went through a divorce and it took until recently to dig out from under everything related to that.  what I've posted is from now on.  The 2k expenses/month has been going for about 6 months and should be consistent if not cheaper once my last kid at home leaves for college (on the GI bill).

I could keep working, but the environment is getting toxic and I'm tired of the bs.  I'd really like to go within 3 paydays if I can.  I'm thinking I can do independent consulting to gain some money here and there without having to go full time.

Will check out the military guide.

Thanks!

[SuperMex]

I'm not sure how long you have been working as a civilian, but you have to work 18 months to qualify for unemployment.

If you really want to quit and never work again I recommend you stick it out for 18 months. (check with your state unemployment office)

Don't quit get fired, at this point you can draw unemployment for two years.

Imagine how much fun you can have telling your bosses what morons they are until they fire you.

[Nick_Miller]

Imagine how much fun you can have telling your bosses what morons they are until they fire you.

I could be wrong, but I think that sort of behavior would allow a termination "for cause," and thus make him ineligible for unemployment benefits in most (all?) states. I think you were kidding though!

And OP, do you own a home? I ask because, to me, that changes your equation. I can't imagine retiring with only $10K in cash to handle things replacing your roof, HVAC, etc.

[Aggie1999]

+1 on being terminated with cause or without cause. They fire you with cause and at least in Texas no unemployment will be given. You need to be laid off, not fired.

[SuperMex]

The only thing I know about it was that I wasn't illegible for unemployment when I retired and I was told I would have to work as a civilian for 18 months to be able to get unemployment.

I had a friend that was trying to move to New York, he didn't just want to quit because he wanted to collect unemployment while he looked for a job. He started trying to get fired coming late, not finishing projects on time etc. Nothing seemed to work, finally the head boss got a new computer and asked him to copy all of the old information out of his hard drive to the new computer. He stressed to him how important it was because he had critical data on the computer. My friend who was an IT guy promptly formatted the hard drive and he was fired the next day. 

[Morekalian]

I do have a house with a mortgage (part of the original 2k/month expense figure).  It is one of my major concerns for if a big ticket fix comes along.

I believe my state is also one where you have to be let go without cause to collect.

I think I'm going to try to get to around 20K in reserve and then go.  Give independence a chance while I'm still relatively young.  If I have to go back to work later, then so be it.  Still got a few weeks to think about it before I pull the trigger.

Thanks!

[Nords]

Also - check out http://the-military-guide.com/

Nords has put together a guide specific to military early retirement.  So good place for info specific to your pension.

Thanks, Dandarc!

I do have a house with a mortgage (part of the original 2k/month expense figure).  It is one of my major concerns for if a big ticket fix comes along.

I believe my state is also one where you have to be let go without cause to collect.

I think I'm going to try to get to around 20K in reserve and then go.  Give independence a chance while I'm still relatively young.  If I have to go back to work later, then so be it.  Still got a few weeks to think about it before I pull the trigger.

Thanks!

I don't get many questions about retiring with low savings, but here's one post:
http://the-military-guide.com/military-retirement-with-low-savings/

Please ask me more questions here or send me a PM with more details. 

The challenge in these workplace situations is finding the mental bandwidth to form a plan.
http://the-military-guide.com/the-fog-of-work/

Frankly, the bad-boss problem almost never solves itself.  The best solution is to take care of your own career (and health) by moving to a team with a different boss, or quitting the company to find another job.  Finding another job is tough but on the other hand you'll finally have the time to de-stress, catch up on sleep, regroup, and consider your next move.  Part of that will be reviewing all of your expenses and spending only on the things you truly value.  (Even after nearly 15 years of early retirement, my spouse and I are still finding places to cut our expenses.)  Another part of that will be regaining the mental bandwidth to find a new job (if you want) or to start your own gigs.

One advantage of financial independence is that you can do a lot to reduce the impact of the big-ticket fixes.  You'll have the time to take care of your home and either stop the little problems before they grow into big ones, or stretch the survival of an old structure while you figure out a frugal solution.  If you don't already have the skills, you can learn a lot from videos and sites like FamilyHandyman.com.

If you haven't done so already, take a look at obtaining a home equity line of credit while you're still employed.  The combination of employment income and home equity means that you can get a HELOC (perhaps with zero closing costs) and have cheap credit handy when you need it.  (And only if you want it.)  The reason I bring this up is because it's a lot easier to qualify when you have employment income.

[Morekalian]

Thanks Nords!  I'll check out the sites.  Especially the handyman one.  Many minor repairs needed.

At this point, I'm sure I can make it just fine as is, but then I keep thinking, just one more payday...

Hard to break the mental chains more than anything probably...

[Cassie]

How about a p.t. job?  As far as the care for Alzheimer's Medicaid kicks in once resources are used up.  I had a Grandma with $ and one without and they ended up in the same nursing home.

[Morekalian]

I'm considering a p.t. job after a few months of getting the house in order as a way to save a little extra for emergencies and fun stuff.  My medical is pretty much covered through the VA, but there may be family issues.

Thanks for the advice!