Retire at age 55?

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Brett

Brett

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Ah…. To retire at 55 (if you are one of the lucky ones with CSRS). But wait; there are choices to make here. In my particular situation, when I’m 55 (I’m 48 now.), I will have 35 years with darn near a year of sick leave to boot. This should give me about 68% of my high three.

Choices:

1.) Retire and don’t look back, take your 68% and run!
2.) I’m way too young to retire and should stay to get my 80% at age 60. This would also allow me to grow my TSP with more contributions.

There’s got to be several of you out there in the same situation, I would be interested in hearing what some of you are deciding to do.
 
Depends what you want.

Many people choose a seperate career, and build a second retirement. Those individuals not only collect FED retirement but also add a second stream of income, thus far exceeding the income if they stay (even with greater percentage hi-3).

If you do stay, calculate how much you would be drawing in retirement vs how much you make on the job. Sometimes the difference is pennies per hour. Hardly worth investing your limited hours (we all are limited on how many hours we will have in life) at work, unless is it your dream job.

These are just a couple of many considerations.

Peace and Blessings!
 
Brett, I juat retired in July with 37 years service and 1 1/2 years of sick leave. I am 59 years old. As long as you are enjoying your job stay put. When you get up in the morning and dread going to work, it's time to go. I miss the people I worked with, but not the job. You can always start a second career. Enjoy what ever you decide to do you can't go wrong.
 
I'll be the outsider in this post, but still throw in my 2 cents. Mandatory retirement is 56, min age 48 with 25 years of service. I am 42 - six years from min age. Work conditions have deteriorated so bad recently that I (and most of my co-workers) plan to leave ASAP. FERS at min age is 39%, so the rest of what we need is obviously up to me. Over the past few years my wife and I have slowly been adjusting our budget towards this big change, meaning reducing expenditures, increasing investing/savings, and credit cards paid off every month (we only have two left). My goal now is to be ABLE TO RETIRE when I am eligible, but hope that I can stay with my job long enough to be comfortable in retirement WITHOUT having to work another job.

My backup plan is learning Spanish so I can afford retirement to another country where no one can pronounce my name... (no joking).
 
If your are in FERS, your accrued sick leave simply evaporates. As a result, older FERS people are starting to use lots of it, a fact that has been noticed by OPM. I hear that there is no chance of changing the law to allow it to count as service time (as it does for CSRS) but that there are proposals to do something so it doesn't just count for nothing.

Anyone got any up-to-date info on what is likely to happen?
 
The same issues that I went through in deciding when to retire apply today. I retired September 30, 2005 at age of 56 1/2. I wanted to retire at 55 but delayed for 18 months.

I hated my job because of all the reorganizations at the Navy base I worked. I could not get the final pay 3% increase of payband under Demonstration pay system (started in 1999). The job was not satisfying and there were no challenges.

However, I hung in until age 56 to get a greater yearly amount of non-taxable annuity and contribute as much as I could to TSP and Roth IRA. The non-taxable portion of my CSRS annuity is the return of all the money (7%) I deposited into CSRS. They prorate the total money based upon life expectancy and return it over the years in retirement. By waiting until age 56 it increased by 18% compared to age 55.

If I had liked what I was doing, I would have stayed a few years longer. Since I hated the job I decided to retire at 56 and collect 70% of my high three. Almost seven percent of my annuity is non-taxable because it's a return of my contributions to CSRS.

My net CSRS annuity is 76% of my pre-retirement salary net pay because of lower the tax brackets, 7% is non-taxable, and I am not contributing to CSRS (7%) or Medicare (1.45%). When I factor in not contributing to TSP or Roth in retirement, the net retirement annuity jumps to 99% of pre-retirement salary net. So the money to live on is not a problem.

I have considered coming back as a contractor, but the stigma and resentment I have still lingers. I'd rather do something different, or volunteer. I don't need the money.
 
Thanks guys for your input. I'm leaning toward retiring at 55 because my wife is older and will be able to retire before me, but also because I figured that each additional year will give me roughly $100 a month extra or, only $3.30 a day. That can add up over time, of course, but like SkyPilot mentioned, we only have a limited number of hours to live. EWGuy, I hadn’t even considered that the retirement amount we have paid in over the years was tax free income. That’s good to know.
 
EWGuy said:
When I factor in not contributing to TSP or Roth in retirement, the net retirement annuity jumps to 99% of pre-retirement salary net. So the money to live on is not a problem.
Click to expand...

That is awesome.................20 years from now I hope to follow in your foot steps.
 
Agreed. Hopefully by making that max TSP contributions for my next 30 years of service (*sigh*) will let me get out in a similar situation.

There will not be a question about when to get out for me. Its MRA and out. You only live once, and I want to enjoy as much of it as I can. Right now Im tying too much of it up with little things like work... :)
 
I have a question to those retirees or about to retire...

I have about 8-9 years for retirement and the way I am basing myself for me to retire is to be able to have an income within 10k-12k a month. Reading the posts of some retirees (and those closed to retirement), it seems like the concern here is how much more percentage they could get after working from their current job and how much more they will have in their retirement. Many are retiring before the 59 1/2 requirement for them to start drawing down into their retirement account.

For those who are still far away from retiring (like me) wouldn't it be better to find a retirement account that will start providing the amount needed for you to live as soon as you retire. TSP, IRA (whether it is ROTH and traditional), 401ks etc are no help really unless you want to start drawing down from them before the 59 1/2 requirement.

Having pointing this out, i am very interested in what people have to say about their retirement strategy, how much they will need (whether they will retire at age 45 or 55) to retire to live comfortably, and where are they at in meeting those goals.

As for me, I know i'll be receiving 50% of my base pay upon retirement and I also have real estate rentals. My real estate is actually providing me the cash flow now and i don't have to wait until 59 1/2.
 
mlk_man said:
I'm retiring at 45. Works over rated. ;)
Click to expand...

There you go! I dream of expatriating to my wife's home country or somewhere else in S. America. It is amazing how little you need (in US $)to live like kings. Una finca en las montanas...ahhhhh
 
pyriel said:
i am very interested in what people have to say about their retirement strategy.
Click to expand...

My plan is very sketchy but it goes something like this.

Retire in 5.5 years at age 49. (ATC)

Fers pension = 39% (more like 35% after survivor benefits).

S.S. Supplement = 7%

Begin drawing on my TSP using IRS rule 72t (equal payments based on life expectancy). I figure this will get me roughly 20% of my salary annually (I'll show you the math if you are interested).

That's only 62% percent of my salary. The rest will come from reduced expenses. My mortgage will be paid off. That's worth about 20%. The rest will come from no fica tax, reduced federal tax, no retirement expense, no union dues, etc, etc, etc.
 
Wheels said:
My plan is very sketchy but it goes something like this.

Retire in 5.5 years at age 49. (ATC)

Fers pension = 39% (more like 35% after survivor benefits).

S.S. Supplement = 7%

Begin drawing on my TSP using IRS rule 72t (equal payments based on life expectancy). I figure this will get me roughly 20% of my salary annually (I'll show you the math if you are interested).

That's only 62% percent of my salary. The rest will come from reduced expenses. My mortgage will be paid off. That's worth about 20%. The rest will come from no fica tax, reduced federal tax, no retirement expense, no union dues, etc, etc, etc.
Click to expand...

Thanks Wheels,
Can you pm me it to me... I can share mine as well... Based on your calculation, if you are earning 100k (200k) now, then your retirement at age 49, you'll be receiving 35k (70k). Provided that you have no mortgage debt and everything is paid off, almost 6k (12k) a month until you reach 59 1/2 to start drawing down from your retirement accounts. From there it will increase significantly.

All,
Other people at my work continues to try to extend. They say things like they have alot more to contribute to the organization. I'm sure that you've heard the same thing. But what I really think about that comment is that they needed to keep their job to be able to sustain their current lifestyle and they are not ready for retirement at all... Sometimes, I feel like coming up to those individuals and asking them why won't they retire and then come back and work for free and contribute to the organization. I wonder how many people would take me up on that challenge...
 
Wheels said:
My plan is very sketchy but it goes something like this.

Fers pension = 39% (more like 35% after survivor benefits).

S.S. Supplement = 7%
Click to expand...

Wheels, my plan does not include survivor benefits because I read some where that a good life insurance policy would be less expensive or as/ more effective. Any thoughts?

And S.S. supplement - I get conflicting info - where'd you get 7%?

Rusty
 
atcsat64 said:
Wheels, my plan does not include survivor benefits because I read some where that a good life insurance policy would be less expensive or as/ more effective. Any thoughts?

And S.S. supplement - I get conflicting info - where'd you get 7%?

Rusty
Click to expand...

1st, outside life insurance isn't doable for me because of the wheelchair (now you all know where my user name comes from). Secondly, you have to do survivor benefits if you want your spouse to have access to your health insurance after you die.

Lastly, the SS Supplement can be a bit tedious. I'll 'splain it to you via a PM
 
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