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First day back at work after two weeks off. They've started looking for my replacement and want me to take six months to train him or her. Last year, I told my employer that I was thinking of retiring at the beginning of August, so they need to find someone by next month. Since they have not hired anyone yet, my supervisor said it was fine to continue working for as long as I want.
One of the things I did on this recent trip was meet with a fee only financial planner in the state to which I will be relocating, to have him go over my 'grand scheme' for retirement finances and let me know if it makes sense, or if it's unrealistic. He suggested a few things, but primarily he said I need to prove to myself that I can live on a specified yearly income. If I can, then great, go ahead and retire in August. If not, then I should continue working.
I sort of wish someone else would make this decision for me, but understand that nobody can. It's all on me. Got some heavy thinking, and praying, to do this week.
Get a good worksheet and drop numbers in using a zero-based budgeting approach. Most retirement planning tools using a percentage of current income approach and such as approach is "lazy" in my opinion. This method is sometimes called the bottom down approach. Start with zeros for various expense categories and start assigning numbers and see what you come up with. If you use an Excel spreadsheet, you get immediate updating of the total and this allows for iteration after iteration that after a while will make you believe in what you've created.
After having that, then your planner can crunch the numbers using rate of return and inflation and see how long you're good for before you start going red.
It's amazing what a legacy career of just a little bit of annual income for, say, 5 years after retiring will do for the number crunch exercise. You know legacy career, that WalMart greeter, Trader Joe bag boy, Burns security guard hanging out in front of a bank or my dream legacy career of being a bouncer at a senior center bingo hall wearing a tight black muscle shirt.
I would suggest that you can probably live on whatever specified yearly amount you happen to have. Usually a retiree finds that he or she can live on whatever monetary amount happens to be available, as long as it is not drastically low such as $10,000 or $12,000 per year.
One can mold one's needs and wants to what money is available in retirement.
Last edited by matisse12; 01-04-2016 at 05:19 PM..
First day back at work after two weeks off. They've started looking for my replacement and want me to take six months to train him or her. Last year, I told my employer that I was thinking of retiring at the beginning of August, so they need to find someone by next month. Since they have not hired anyone yet, my supervisor said it was fine to continue working for as long as I want.
One of the things I did on this recent trip was meet with a fee only financial planner in the state to which I will be relocating, to have him go over my 'grand scheme' for retirement finances and let me know if it makes sense, or if it's unrealistic. He suggested a few things, but primarily he said I need to prove to myself that I can live on a specified yearly income. If I can, then great, go ahead and retire in August. If not, then I should continue working.
I sort of wish someone else would make this decision for me, but understand that nobody can. It's all on me. Got some heavy thinking, and praying, to do this week.
Your dilemma and the agonizing decision you are struggling with are actually good things because it means you have options. Think of all the unfortunate people who lost jobs during the Great Recession (2008-2009) at an age when it was difficult to find another job.
You are fortunate in being welcome to stay longer if you wish - it is to your credit that your supervisor thinks highly of you, and his opinion bespeaks the good atmosphere you enjoy at work. So don't let the actually decision-making process get you down - rather, focus on your good fortune.
He suggested a few things, but primarily he said I need to prove to myself that I can live on a specified yearly income. If I can, then great, go ahead and retire in August. If not, then I should continue working.
I sort of wish someone else would make this decision for me, but understand that nobody can. It's all on me. Got some heavy thinking, and praying, to do this week.
Volosong,
Yes, you have to make your own decision. I'd suggest to do some serious number crunching besides heavy thinking, soul searching and praying.
I had to make a quick decision few months ago when I got the unexpected VSI (voluntary separation incentive) offer with less than a week to apply.
What I did was to go through my bank account/credit card statement to tally up my income and expenses in the last few years to get the exact numbers of our spending in each categories.
I then separate the spending into discretionary and non-discretionary (or essential) types.
Next step is to estimate our income (from all possible sources) and spending in the next few years. Since we plan to relocate, I had to do some research on taxes, insurance, heath care, utilities etc at our likely new home state.
The exercise convinced me that it was the right thing to retire a bit early.
To be honest, financially, I could have retired earlier not solely on our nest egg but also on our life experience of being able to adjust our lifestyle to match our income (or to live within certain limit of our income). Mentally, I knew that I should retire early so that my husband and I could do more fun things together (the thinking was reinforced by my husband's two incidents of physical injuries causing months of using crutches!). Emotionally, I was not quite ready because I enjoyed and took pride in my work. In addition, being raised in a frugal and hard working family, it was difficult for me to walk away from a well-paid and satisfying job. When the offer came, even though we did not really need the buyout money to retire, it was a strong sign for me to call it quit and say goodbye to my career.
So if you are ready to retire mentally and emotionally but still have some financial concerns, a spreadsheet will certainly help to come up with the right decision and a lifestyle trade off which you are comfortable with.
There's a couple of key numbers missing from your post. For starters, how old are you ?? Are you at Full Retirement Age to start collecting SS and Medicare ??
And you should know your current expenses and your projected expenses after you stop working full time. That number should be rather easy to determine as you gather info for your Tax Return. As someone mentioned above, don't use the Lazy Crazy Percent of current Income -- that number is not useful in this analysis.
There are worksheets all over the Internet to help. Start with your Housing Expense....Mortgage-Free or Rent ?? Utilities, Insurance (all of it), and money to pay the Taxman. Add up your Flexible Expenses...Food, Clothing and Car expenses. Sprinkle in a little for Entertainment over and above the Cable Bill. Add it up and then add in about 10% Fudge Factor to cover anything unforeseen.
Now you can see if your projected Income Streams will cover the Out-go Stream. Good Luck in your Retirement !!!
I track living expenses for 2 years, some of these information comes directly from the bank statement online. In the mean time, I try to reduce as much as I can. I also pay most thing in cash, for almost two years.
Figure a high of 5% increases in everything per year. Then figure maybe 10% to 15% less spending in retirement, including what expenses go away in not working (commuting, clothes, meals out). Then figure annual % rate growth from investments. Do all the math then take a nice beach vacation and think it over.
Thank you for your input. It's the 'end of the week' and I feel I owe an update, especially for those to put forth the thought, effort, and time to post something.
I explicitly did not include any financial information because it is not relevant to my decision. I will have enough financial resources in retirement to be mortgage free, (in a lower cost-of-living area), and have a comfortable lifestyle, albeit not lavish. Like my financial advisor said, I won't be able to take a trip to Europe every year, but I'll make out okay. Of course, better if I delay, we all know that.
At my employer, we have a matrix management structure. There is my project manager who oversees the satellite instrument for which I am the operator/controller and then there is the line manager who oversees everything else, (office space allocation, finances/salary, etc.) I spoke with both of them yesterday.
They both want me to continue and I was pretty much decided to give it another year. However, right at the end when I explained that I'm getting tired of waking up every day at 4:15 to get ready to catch the vanpool, the 1.5 hour one-way commute over the mountain, (if I drive myself, I can make it in an hour), the nine-hour days, (we are on a 9/80 schedule), and not getting back home until right at 6:00 in the evening and being so tired and worn out that I don't feel like doing anything at night . . . she said that just maybe it is time to go.
The other thing I need to consider is that one of the instruments I control, (I have half-time funding for each of two instruments on two different satellites), is degrading and the estimates are showing that it will fail sometime this summer. Most flight projects allow for about a two-to-four month follow-on period after an instrument or satellite fails for the final paperwork, reports, and bookkeeping for operations personnel. So, sometime this summer or autumn, I will lose half my funding. My line manager said that they would do all they could do to find me something to fill in the funding gap, but could not give a guarantee. (I currently live in a very high cost-of-living area and could not keep the house if only working half time. Also, houses don't sell very fast during active national election cycles. I need to put it on the market in the Spring if I'm going to sell this year.)
My project manager, realizing that I'm still vacillating back and forth gave me one more week before coming to a final decision. And even then, if they can't find an appropriate replacement soon enough, he will allow me to delay my actual retirement until my replacement is knowledgeable enough to keep the instrument humming along smoothly.
Right now, I'm leaning on bailing in August. The one thing that keeps coming back to me is that people do not regret when they retired and overwhelmingly wish they had done so sooner. They might have wished they saved more and spent less, but rarely do you hear that someone wishes they had continued working, (unless they voluntarily wanted to do so, not because they had to). (Yes, there are always exceptions and there are forced retirement, of which there have been way too many the past eight years. I'm referring to voluntary retirements.)
Thanks again everyone.
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