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I think that is really the key point here. Going from full employment into retirement and expect to maintain their pre-retirement lifestyle are heading for failure unless they have a nest egg on the scale of Mitt Romney. So move from that over priced high stress area and take the money and run. Pay cash for the new pad and bank the rest or buy new cars. Enjoy life! You only get one.
That's exactly what I did
Only I bought the new truck the summer before I pulled the plug.
I'm not sure what the rate of return is on your delayed SS pension benefits if you wait until after 62 to collect, but it's probably lower then the rate of return on your investments, so it pays not to wait generally.
Full retirement age for the OP is at least 66. If one or both start collecting SS at 62, they will receive only 75% of the benefit they would receive at full retirement. That means if one would collect $2000 at full retirement age, he/she would only receive $1500. Double that for a couple, and they'd be losing $12,000 a year. The longer one can hold out collecting SS, the better.
An issue with early retirement is that SS uses a worker's 35 best years, adjusted for inflation, to determine benefits. If you are making, say $80k now and expect to continue making that amount or more if you continued to work, then retiring at 55 or 58 or 60 rather than at 66, will lose you those $80k years between retirement and when you collect SS ... and likely lowering the basis of your SS. This is especially important if you are a woman who may not have worked full-time when your children were growing up or someone who started off in a low-paying field and changed careers or who started at the bottom and worked himself/herself up the ladder.
Each person's situation is different. My SS would increase about 50% if I retired at 66 rather than 62. When I calculated in my increased pension benefits if I stayed for four more years, it was a no brainer. I would increase my total guaranteed retirement income from SS and my government pension by nearly 40% for staying four years longer -- and that doesn't include my retirement investments in that income mix.
Furthermore, the fact that I like my job and the people I work with also makes the decision easy for me. I simply don't see the point of leaving here to go work at some other job for less money and fewer benefits just to be "semi-retired". Several of my co-workers and friends have done it. When they hit 55 and could retire, they bolted out the door without even thinking about such pertinent things as health care -- and now work in crappy jobs in retail, food service, etc to make ends meet until SS kicks in. Some of them may end up working at least part-time long after they reach full retirement age. That's not for me.
My advice is to not listen to unnamed "experts" cited by friends or even named ones in magazines or on-line. You have to do your own numbers for yourself. If math isn't your thing, then you should probably talk to a financial planner who can run the numbers for you, and show you what you gain and lose with each scenario.
Furthermore, the fact that I like my job and the people I work with also makes the decision easy for me. I simply don't see the point of leaving here to go work at some other job for less money and fewer benefits just to be "semi-retired". Several of my co-workers and friends have done it. When they hit 55 and could retire, they bolted out the door without even thinking about such pertinent things as health care -- and now work in crappy jobs in retail, food service, etc to make ends meet until SS kicks in. Some of them may end up working at least part-time long after they reach full retirement age. That's not for me.
The above post, of which I quoted only a single paragraph, is an excellent analysis. The quoted paragraph seems to sum up things nicely. If people want to retire at 55 and truly have their financial ducks in a row, that's one thing, and more power to them. But the co-workers cited above who "bolted out the door" at 55 only to be chained to some crap job, all in the name of being "semi-retired" are a mystery to me too.
I wonder what motivated them? The snobism of appearing well enough off to be retired at 55 (at odds with reality in the cases cited anyway)? Dislike for their jobs overshadowing the fact and only a few more years of hanging tough would reap such tremendous gains? A lifelong habit of capricious decision-making without careful regard for the consequences?
And no, I am not arguing against being semi-retired per se. Between age 61 and 66, I too was semi-retired because I was asked back to do some special projects and discovered I really liked those projects and found them gratifying. I didn't need the money, and in fact had not planned on having that semi-retired status. I was not tied down to anything and my health benefits had already been secured.
May I 2nd ER's comment on Linda_d's post as an excellent analysis on the issue. If the delayed benefit $s are significant in your specific situation, by all means go for the later retirement option (s).
There is one alternative consideration I'd throw into the discussion which is NOT financial. That is one's mobility/health factor. If said retirement plans includes traveling, especially to the typical cobblestoned pathways of Europe or trekking Machu Picchu, then one must weigh the dice roll of do it now while you can versus a maybe down the road.
Obviously, one can reasonably assume that more secure income in retirement is better on general principles. However, it does behoove one, IMO, to also consider the tick-toc parameter of what one can do in retirement. Kind of gets one into a bucket list mentality of trade-offs between what you can afford to do - both financially and physically. JMO
Location: Chapel Hill, NC, formerly NoVA and Phila
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If your wife is having a hard time finding a job in the robust DC job market, think how hard it will be to find one in SE Virginia, unless her skills are more needed there for some reason. Having moved away from DC just 1 1/2 years ago, I realize how spoiled I was by the job market there. Even if a job wasn't a perfect fit, you could usually find something within a reasonable time frame. Now in my new location, the jobs are much more sparse, the pay much lower. You may experience something similar. At the very least, I would wait until one of you has a job with benefits before you move. Selling your house in DC will likely be very quick, so you should be able to move fairly quickly or one of you can move while the other stays behind to close up loose ends.
michgo THX appreciate you telling your experience. True the DC job market is better than many places. But I would not call it robust for everyone looking. Depends on your profession. Some are in demand and some are not. We do expect lower paying jobs in SE VA and are going in realizing the job market is not what it is here. One of us will get a job before we pull the plug.
May I 2nd ER's comment on Linda_d's post as an excellent analysis on the issue. If the delayed benefit $s are significant in your specific situation, by all means go for the later retirement option (s).
There is one alternative consideration I'd throw into the discussion which is NOT financial. That is one's mobility/health factor. If said retirement plans includes traveling, especially to the typical cobblestoned pathways of Europe or trekking Machu Picchu, then one must weigh the dice roll of do it now while you can versus a maybe down the road.
Obviously, one can reasonably assume that more secure income in retirement is better on general principles. However, it does behoove one, IMO, to also consider the tick-toc parameter of what one can do in retirement. Kind of gets one into a bucket list mentality of trade-offs between what you can afford to do - both financially and physically. JMO
Excellent post! Those are things that some people (including me) take into consideration, having the energy, health, and fitness level to travel and engage in active activities while they still can, or wait until they are fully retired and more financially secure to travel, yet maybe not have the energy, desire, or health to engage in active activities.
For me balance is what I seek. If/when I have sufficient resources to travel more and explore hiking trails and other active activities while traveling before I reach full retirement age, I will. I will as long as I do not have debt, home and car paid off, and a decent amount of money saved to live a modest and simple life. If I make it to 70 I do not want to have regrets and wished I was able to do this or that. Plus, I know some of my family members and friends of the family that I know and are retired have expressed to me that they no longer have interest in traveling much, or at all. They simply do not care for being out of their house for extended period time.
Great points all over the place. While I agree with notion that one ought to have things figured out financially, to avoid working at crap jobs at extended ages--remember that time is what life is made out of, so you better be careful how you spend it.
We are a couple in upper 50s. Want to slow down after reasonably successful long careers in the Washington DC area. We own a paid for home in a nice southeast VA coastal community worth about 600k. Have about 400k in 401s another $150k in liquid cash assists. Will clear about 275k when we sell the home we are in. We can both get SS at 62. Very thankful for what we have.Then hopefully start to work towards full retirement.
We plan on getting much lower paying less stressful jobs just for health care and bills when we move to the other location (SE VA).I know there are a lot of factors to consider but in general does this sound like a reasonable plan? We think we are in good shape but still worrying about the changes. Anyone else done something like this?
The economic crash forced our hand, unfortunately. We were doing very well, in our early 50's and not ready to fully retire. We had to punt a bit but will be taking early ss and with our rentals we will be fine. Husband still works a bit to offset our travel expense. We just missed that darn brass ring lol. We found a wonderful and very affordable 55+ development and we are very happy.
just wait until you see the out of pocket and price.... holly cow, we just got our plans released a family out of pocket on the ny plan is 12,800.00. they are bsically almost like hsa plans .
40k income = 3800k insurance premium with 12,800 out of pocket for a couple.
if you can't afford insurance in the first place where are you getting the out of pocket money when needed. ha ha ha is this obamas idea of better?
We already have 10,000 deductible on our worthless insurance plan now so $12,800 is not that bad if you save. $380 + + for a policy is also reasonable with the subsidies...providing they are there for those who will need them and most of us limping towards retirement will need them. I am sure the most loyal O supporters will be getting sticker shock.
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