Last Thursday I took a pre-retirement course on line offered by the organization that manages our pension. There wasn't anything surprising to me, more reiteration of things I knew but hearing in context with a full plan was helpful. One thing that really stuck out was the difference delaying each year of retirement will make for me. I don't want to work more and more years, but the economy has me spooked a bit. There shouldn't be an issue with DH as the difference in his additional work years, is vastly different than mine. We wouldn't touch his retirement until I retire anyway. As we've hashed through before, he can always resume work of some sort and schedule if we decide things are too tight.
But for me, I lose years of credit and potential base calculation reduction for every year I retire before age 66. Now, I can retire early and defer the start of pension payout without a formula decrease, but still have fewer years of service credit, roughly decreasing my annual pension by about $2200 per year, by each year I retire before age 66. Assuming I live to 86, that's another $163,000 in my pension payout. It's not just the pension either. I'd have that four additional years of investing in my 401K, another $108,000, not counting interest on what's already there. The cost though? Four more years tied to a job. Four more years on someone else's time and calendar.
But maybe I can approach it differently. As I've shared, I ended up both donating 40 vacation hours and using 40 hours of vacation for deferred compensation conversion. These were hours I would have lost- two more weeks of vacation. Had I taken it, I'd have had 6 weeks or the equivalent of a combination of weeks plus extended weekends off. Clearly I need to manage my time off from work better. If I truly use the time I've earned, work remotely sometimes from the lake or at a vacation rental, I could minimize the feeling of working farther into my 60's.
Would I actually do that is the question. My colleague is trying to do that. Her husband retired a few years ago. She just turned 62 and is contemplating when she wants to officially end. I've seen her really being gone when she takes days off and week or two vacations. Trying that out too for the next few years is my starting point. I guess I'm just thinking out loud with you all. That and revisit timelines at each quarterly budget meeting. Thanks for being my thought partners.