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I was 62 in August. Have been working in IT for 31 years and working at the same company now for 24 years.
I am tentatively scheduling my retirement date to be 4/1/15...about six months from now. I've crunched the numbers like crazy and, according to the numbers, I can replace my entire net income with a combination of SS, company pension and 401K savings for about 25 years...at which point my 401K would probably run out, but obviously not the other two sources of income.
Here's my concern: every month I work adds only about $35 a month (net) to my future monthly retirement income, but about $2500 in contributions and appreciation to my 401K. So, while on paper, it looks good to retire in April, I still keep thinking -- work longer and squeeze as much future income and savings in as I can. I come from a very frugal family and probably inherited some attitudes about work and saving money from my Mother and Grandmother who lived through the Depression.
My wife also works, but is 7 years younger and will have to continue for some time.
We paid the mortgage off last year and our only significant (but it is definitely significant) recurring expense is our only kid's college education, which he just started a couple of months ago.
So, while on the one hand, I am so, so ready to leave the corporate rat race, I feel like I'm being irresponsible to leave before I've milked every possible dime out of pensions, SS and 401K by waiting longer.
I am in good health generally, but have jumped the sharks of some significant health issues in the past. Actually had a stroke about 5 years ago, but fully recovered in about a year, so was very lucky.
So, I would like others' thoughts on this very much and how any of you have made this decision of when to pull the trigger.
I won't have any local income taxes after retirement and state income tax will be greatly reduced. I totaled up what I would get from my company pension and knocked 20% of that off for fed taxes. Knocked off 18% of anticipated SS for taxes, knocked 20% off of every planned monthly 401K distribution for same...remaining net total is my monthly net now.
I planned on a 2.5% average annual inflation for the next 25 years and a conservative 4% appreciation of 401K. Company pension does NOT increase with inflation...my company used to offer that in their pension plan but ended that 'feature' about 20 years ago.
If you like your work don't retire until your wife does.
Consider delaying SS. Treat the increase benefit like the purchase of an inflation adj annuity.
Looks like the 401k could be in trouble. Plan on at least living until 95.
Can your wife survive after you die?
Can you cut back on hours as a compromise?
Sixty-two and a half is certainly not too early to retire when one is as well prepared financially as you are. Being that you are "so ready to leave the ...... rat race", I would say go for it on your planned date.
However, I do have an additional thought: If you are in a position to retire without giving more than a month's notice, why not just extend working on a month-to-month basis? That would make you feel better in terms of alleviating your doubt, and it might make the stress easier to bear because you would never be more than a month away from pulling the plug!
If I were in your shoes, I'd wait till the kid graduates from college. Tell him or her that grad school is on his/her dime. In the meantime, keep continuing what you're doing now.
I'm glad you're ok. Strokes are very serious and often take people out of the workforce permanently, even while young. I would use financial independence to find a less stressful means of generating wealth. It could end up being far better for your health and finances.
I lived with my great uncle through much of my childhood. When he was around 60, he retired from his career as a university professor and moved from California to Florida, at most with a low 7 figures. He's now 76, lives overseas running an extremely successful business related to his academic field, and is making 7 figures a year. The real money has likely been coming in after age 70. He's very healthy and happy, and most of the time lives like someone earning $50k/year. His car looks like it's worth around $5000.
It just goes to show it's never too late to go in a completely different direction in life and be incredibly successful.
If you like your work don't retire until your wife does.
Consider delaying SS. Treat the increase benefit like the purchase of an inflation adj annuity.
Looks like the 401k could be in trouble. Plan on at least living until 95.
Can your wife survive after you die?
Can you cut back on hours as a compromise?
Well, I generally like my work, but I do not like our office environment anymore. Basically, I'm Dilbert. I got to work from home twice a week for a couple of years and that was wonderful. If I still had that I could probably easily see working another couple of years or so, but our management changed and they nixed all that, so we have to be in our cube farm every day...and it's a pretty soul-crushing experience. I'd love to be able to cut back on hours, but with kid in college, I really need my current income one way or another (work or retire), so going back to --say three days a week -- but with a 40% cut in pay wouldn't work.
Spouse works at same company for same number of years and has same benefits and $ in 401K I do, so by the time she comes around to a reasonable age, she will certainly have substantial retirement$.
Sixty-two and a half is certainly not too early to retire when one is as well prepared financially as you are. Being that you are "so ready to leave the ...... rat race", I would say go for it on your planned date.
However, I do have an additional thought: If you are in a position to retire without giving more than a month's notice, why not just extend working on a month-to-month basis? That would make you feel better in terms of alleviating your doubt, and it might make the stress easier to bear because you would never be more than a month away from pulling the plug!
That sounds like very good advice. Unfortunately, if I were to leave with only a months' notice, that would put my co-workers in a bind, because it would be impossible to hire and train someone to replace me in a month...it would probably be at least 6 months to get a qualified person into my position and have them reasonably up to speed on what I do, so for that period, the couple of other people who do what I do would be very slammed and stressed. I would hate to do that to them. If going with my tentative 4/1 retirement date, I was going to tell my management at the end of this month to give them plenty of time to start the replacement process -- and possibly give me some time to help train someone before I leave.
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