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.
Being on a defined pension plan has a lot of upside, but also restrictions, as you mention. I think the idea of truly using your vacation time, and building in time off, to avoid burnout, is a good one. It will take discipline, but perhaps you can keep your tech put away during trips (e.g. phone & laptops). I made the decision to turn all work notifications off of my personal phone, and it was a game changer. Maybe there are ideas like that to help you reduce distractions during your time off.
ReplyDeleteI need to be better at ignoring meetings scheduled on days I've scheduled off. I admit I have a little martyr complex. The putting the tech aside is a good idea. Certain times I just feel like I can't, like this past weekend.
DeleteTake your time off Sam!
ReplyDeleteI get 8 weeks of PTO a year and I take every bit of it. It's sad to me that here in the US a lot of employees do not use their time off when so many other countries get even more time off than we do.
If I get burned out or stressed out I will be of no use to anyone so I make life/work a balance. I'm more important to my friends/family than to any employer. They'll have me replaced probably before I'm buried.
Can you tell this is one of my pet peeves. lol
We have separate vacation and sick time accrual. The working from home time has meant I e worked sick many times. Ironically not healthy behavior. I need to take your advice.
DeleteI agree with the others - take your time off. Even just working from the lake place would probably do you the world of good!
ReplyDeleteYes, I know, and as all of us who struggle with getting time off, easier said than done. It will be my new fiscal year goal!
DeleteYou know I was so scared when Hubs retired. I did not want him to. But then I realized he was forced to by the state. Mom was living with me and she had taken so much of my time the year before she moved in with me, I was not paying attention to my husband. He had problems and they were afraid to let him out in the woods by himself. I just didn't notice. But to tell you the truth, now when I look back everything has been okay. Yes it would have been nice to have more money, but we are fine. I am so glad he is retired and all I do is sew. I think we scare ourselves with wanting to get more and thinking we will need more when we won't. Life is short my friend and I know you will be fine. Retire and enjoy. Take time off you can do it and you deserve it! Don't you love this advice from a Bonafide work acholic? :) :)
ReplyDeleteI hear everyone that says things will be fine, then I also hear/ read the stress and tension of robbing Peter to pay Paul from the same people. That's where my anxiety happens about thinking of retiring.
DeleteI think taking your earned time off is a good idea and might be just what you need to work the extra years. THIS is what I need to do to! I'm not near retirement (at least 9 years) but definitely need to work on using up my time off.
ReplyDeleteI think you've said your older than me by a year so 9 years brings you to full retirement age of 66/67. My goal had been to retire at 62, so adding another year or two will still be technically early. Maybe we both can work on taking our time off this next year.
DeleteMy dad retired at 62.5 and never looked back. He had a very physical, high-stress job that probably would have killed him if he continued to work. He watches his money carefully and admittedly doesn’t have a lot of funds to draw from but lives comfortably and enjoys life now like he never has before. And definitely figure out a way to use up your vacation time that makes sense for you! JoAnn
ReplyDeleteBoth my parents fully retired at 62, so did my husband's dad. It just feels like things are different now. Just like college costs and housing costs, retirement is more expensive now because of health care, hiring any help for things we can't do, travel. The seminar just got my head doing mental gymnastics again!
DeleteHUM... I just listened to my son who is retiring out of Army (he now works as civilian at Airforce). His issue was not taking vacation on a regular bases. Ended up passing to others and still not taking time off. Now he has a lady in his life that is monitoring it so he does take time off, like the day before or after a holiday or both. He is taking a week to do things with her and her teenage daughter this summer.
ReplyDeleteI retired out early, made due with odd jobs. Hubby retired out at 59.5 . Things were tight but we made it on his pension alone. At 62 we both filed for SS . Lower amount of zeros on that instead of waiting until full retirement. He is now running his own business (I do have to remind him he is retired and doesn't need to work 6 days a week) and I do odd jobs.
Even with the worry of stock markets etc, we are less stressed so less health issues caused by stress. We placed it in GOD's hands and took the best route for our health.
I do need to think health issues and quality of life.
DeleteMy husband retired at 59, and started drawing on his pension at 60
ReplyDeleteI stopped working at 53, as I am six years younger, and took a big hit on my pension BUT I was completely burnt out and could not continue to work anymore.
Four years on my husband is terminally ill. We are released from the pressures of work ( but admittedly enjoy a large pension based on my husbands many years of hard work )
I don’t regret leaving work early
And his diagnosis has made me cherish our time even more
It was a good decision for us. And you will make a good decision for you
Siobhan
Being burnt out will lead to worse issues than tight budgeting. It sounds like you made the right choice.
DeleteI technically retired a few months back at 62 from full time at my job but came back part time at same job. I haven’t decided when I will take social security, and a lot depends on my part time job. At this point I am thinking 65 because it is the same time I will have Medicare. It will depend on my health and the job. Cindy in the South
ReplyDeleteThere's options I can do like part time or substitute teaching. Health needs are my driver.
DeleteSorry this will sound maybe a little jilted. But you will have two social security’s! Your pension, hubby’s pension? and if you’re putting that much into retirement as you imply what would go in if you stayed more years I might be naive but it seems like plenty! First can you pay your house off. Being mortgage free to me is the time changer. If you can or already have I’m sure you’ve added the numbers of your monthly/yearly bills. If you can live on your income (which is lower because of your retirement savings draw) then you and husband’s retirement plus your social security should more than cover your monthly needs. And yes I realize the pesty gap cost to Medicare. As a widow I can’t believe how life changing double of everything coming in would have been as most of my major costs are pretty much the same as for one or two people (heat, property taxes, minor lower electricity etc). All my retired friends are still couples with double everything. I do fine but I’m not on the months South American cruises etc. that this allows (plus way more importantly than that money I’m so envious of their companionship). I thought I had coped with being widowed at 40 but it is WAY harder in my 60’s!)
ReplyDeleteYou raise really good points. We can't change time and working more doesn't add any time to our life together. We are mortgage free now- have been for over a decade, but still have taxes, insurance, utilities etc. Of course. Health insurance is minimally $18,000 out of pocket once I retire. That literally is more than one of us getting SS payments early. I've done the math over and over. Plus, I'll be honest, I'm not relying on SS being there. If it is, great, but I don't want to have to depend on it and then be stuck. You don't sound jilted at All- just experienced and I appreciate your comments.
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