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54 year old, about two years away from being able to retire with a full pension (Defined Benefit plan) with a monthly payment of about 2,700. I could retire now at reduced benefits with a monthly payment of about 2,200. I have about 25,000 in a deferred compensation through work. There is a small investment account. Current salary is about 58K.
Only debt is the mortgage on the house, the amount owed being approximately 130K.
The Retirement plan is as follows: Work until I can draw a full pension in about two years. Then retire and start drawing the pension. At the same time, I would then transition over to a second job. This would probably entail moving to a new location as the nature of my job is something that can’t be duplicated in a geographical area, government work. Ideally the second job would have a pension also I could vest in and receive payments on when the time comes.
The plan is to live off one salary while the pension or salary would be pumped into retirement savings. This would go on from anywhere from 5 to 15 years, with reevaluation every five years until the second retirement. I would put off drawing Social Security as long as possible and really would view anything I could get from Social Security as a bonus beyond what I save. I would also look at other possible revenue streams I could find, side hustles and the like.
I thought I would post this here to get opinions form the group as I’ve always believed that the more eyes on a problem, there is more of a chance of finding things a single person would miss. What are your thoughts and constructive suggestions?
The assumption is you do not like your current job and or the location you are living in. If true go for it. If not need a lot more financial detail if you are asking for a recommendation based on dollars. From what you said you are probably going to be very good on retirement income (I think of these as bonds) so you need to get a much much large portfolio of stocks. Is your pension adjusted for inflation?
If you work longer than the additional 2 years, what happens to your pension? Does it grow or stay the same? If it is not going to grow substantially then I think you have a good plan. Many with pensions do the same thing.
I'd know exactly where you would be moving prior to making any decisions. How many opportunities are there in that area you choose and Is it a higher or Lower COLA area? Is your wife on board with this? Good luck!
54 year old, about two years away from being able to retire with a full pension (Defined Benefit plan) with a monthly payment of about 2,700. I could retire now at reduced benefits with a monthly payment of about 2,200. I have about 25,000 in a deferred compensation through work. There is a small investment account. Current salary is about 58K.
Only debt is the mortgage on the house, the amount owed being approximately 130K.
The Retirement plan is as follows: Work until I can draw a full pension in about two years. Then retire and start drawing the pension. At the same time, I would then transition over to a second job. This would probably entail moving to a new location as the nature of my job is something that can’t be duplicated in a geographical area, government work. Ideally the second job would have a pension also I could vest in and receive payments on when the time comes.
The plan is to live off one salary while the pension or salary would be pumped into retirement savings. This would go on from anywhere from 5 to 15 years, with reevaluation every five years until the second retirement. I would put off drawing Social Security as long as possible and really would view anything I could get from Social Security as a bonus beyond what I save. I would also look at other possible revenue streams I could find, side hustles and the like.
I thought I would post this here to get opinions form the group as I’ve always believed that the more eyes on a problem, there is more of a chance of finding things a single person would miss. What are your thoughts and constructive suggestions?
First off, you will find it very difficult to find another job with a pension. And if you do it will likely never be as generous as the one you currently have. I work for the Federal Government under the FERS retirement system, and if you were to get a Federal job now at your currently salary and over the course of 15 years may grown your salary say by another $10K/year making your average high 3 around say $66K/year, with 15 years of service at which time you will be nearly age 70 you will walk away with a pension of around $10,000/year. You don't say how your current pension is calculated but it is possible that you could grown it by an additional $10K/year working at your current job to age 62 bringing it up to $42,400/year. At that point you could retire and either begin collecting your SS or get 2nd job to tide you over with income until you reach your SS FRA which is likely 67 and begin collecting at that time. And at your current income level and if you worked 35+ years your benefit will be likely >$30K/year by that time which provides you >$14K/year of income than your are earning now working.
First off, you will find it very difficult to find another job with a pension. ....
In many fields there is a high demand for experienced workers. I got my best job offer by far, unsolicited, several years after I had retired. Mid 50s is certainly not too old to start a new job or even a new career.
In many fields there is a high demand for experienced workers. I got my best job offer by far, unsolicited, several years after I had retired. Mid 50s is certainly not too old to start a new job or even a new career.
I meant a job with a pension which the OP mentioned in his post that is what he would be looking for. I too got my best job offer at 44 which fortunately for me it included a pension. And I can tell you as an R.N. I can't think of one private sector hospital or other healthcare facility in my area which spans to Boston that offers employees an annuitized pension. Not sure what the OP does for work, so maybe he will luck out finding a job with a pension as long as it is not in healthcare.
One thing often overlooked is health insurance premiums that are not covered in your pension. Until you are 65 (at least) that could cost a bundle. More than you will comfortably afford. And you must have a platinum plan at all times at this point in life, or face the possibility of going broke for just one unforseen incident. You are NOT 40 years old anymore. Anything can happen!
Your "cushion" account is a little lean at this time. I'd work a few more years, and use that pay to increase that stash - $200,000 minimum. Your pension plus SS (not available for 10 more years at least) will be more than adequate.But that's then. It's between now and then that you need to concentrate on. That includes any moves you might plan to make and just what you'll consider adequate tolerable retirement living 10 years from now. That can be be very costly and unpredictable. Best to have those figures on a piece of paper you can easily pull out from time to time because that figure will likely change in the next ten years.
You're not quite ready yet. I'd go 3 or 4 more years.
Last edited by TwinbrookNine; 10-07-2020 at 12:35 PM..
If you like your current job, why not stay in it instead of going through the stressful hassle of finding a second job that requires a move, selling your house, and buying a new house (with a new 30 year mortgage)? If you are in government work, does your pension still increase with number of years put in? A full pension does not necessarily mean a maximum pension.
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