I've got a decision to make.......

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I got a call from a co-worker this morning. He was on his place on a river in Idaho. He had gotten a call from his wife on Saturday. He'd received a letter in the mail offering him early retirement.

After talking with him, I checked my Saturday mail.

I got the offer too!

Of course, it's reduced income but then, I won't pay Social Security and with a reduced income less taxes to pay...........

I've got some research to do and make a decision before month's end.....


I'm only 58 and can't touch my 401K without paying penalties for a while......


It's a good decision to make ......I guess....


Got to do some research!

What to do....................
 
I wish I had your problem (said with a wink). I accepted a job a couple years ago when I had two offers. One was a lot more money but a lot more of a commute (2 hours each way IF everything is moving).

I did a lot of figuring (spreadsheets help). If you're comfortable now and the reduction will take you below comfortable, I'd think carefully. I thought; hey for that kinda money I can give up 4 or 5 hours of my life to commute. Fortunately, friends made me see clearly that money really wasn't everything. I would have had NO shop time. Similarly if you retire, you'll have lotsa time but, if it means no money for materials, what good is it.

Good luck and happy figuring.
 
Ken,
Big decision, but for reference, my Dad was 2-3 years older when he was offered early retirement. For spare change, and to keep costs down, (can you say employee discount:D) he found a part time job at a hardware store - still there . He's really enjoyed retirement - he'll be 80 this winter and is going strong - in part because he was still young enough to get involved in a lot of things which have kept him busy.

Good luck on working things through to resolution. I really hope the numbers work in your favor!

Wes
 
what kinda clauses are contingant on recieving your retirement ken?
could you for instance offer consultation in your field?
could you work for a competetor?
besides the number/time crunching those are some things that come to mind..
tod
 
Don't know if it is relevant for where you work now, but my SIL worked at a large company and was given a one time offer of early retirement. She too thought long and hard and then decided to take it at the last minute. Less than a year later, the company announced cutbacks in both employees and future retirement/pension benefits... Her's were locked in, so she is doing fine. Appears the early offer was a hint of things to come, at least in her situation.

Good luck in whatever you do.
 
I work for a very large Global Electric company. They have a policy that you can work part time after retirement but only after being off for at least 6 months. Then I could come back to work after that and pick and choose the jobs I wanted to take on....

I'm going to call some friends of mine who have retired and see what they say.

It's going to be a tough decision!

More research.
 
One other thing to think about Ken, is that if you work a little longer, your Social Security check will also be larger when you do start receiving it, (even if you start collecting it early at 62+), and from my personal experience, NO WAY would I take money out of ANYTHING (again) that required paying a "Penalty". YMMV

I wish you the Very Best in your Decision, as it is never an easy one to make for most folks.

This brings to mind a story about a Lady that asked her Friend how she and her husband were enjoying his Retirement. The Second Lady said, I'm not enjoying it very much!! First lady asked Why? Second Lady replied, "Twice as much Husband, Half as much Money!!
 
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[size=+1]Ken,
I've been retired for about three years now. I 'hung it up' at age 59, and have never looked back. I'm really enjoying this retirement stuff!

That said, there are a few things to add into your considerations:

1. Will your retirement compensation be enough to meet your monthly expenses? In addition to food, mortgage, clothing, etc., don't forget to factor in annual or semiannual expenses like property taxes, car insurance, etc. Also, do include hobby expenses for everyone in the family. Retirement won't be much fun if you can't afford a few hobby things.

2. If you want to travel, will your retirement compensation cover that, or will you be dipping into savings? You're planning on living for a long time, aren't you? You don't want to blow your savings early.

3. Home maintenance and remodelling can get expensive, and retired or not, they tend to be ongoing. Got enough for that?

4. Don't know your current situation, but sometimes taking the equity in your home - by selling it and moving to a more modest home in a more economical area - can benefit a lot, too.

5. And now for the BIGGIE: Medical and Dental insurance. Will your retirement package provide it, or at least subsidize it? It can be very expensive to get it on your own. It was the availability of good, but inexpensive medical & dental coverage that made the difference between retiring, or working another six years, for my wife and I. I'm retired USMC, so I could get TriCare coverage very cheaply.

6. On the plus side, you'll save a bit by not having work clothes, lunches, etc. to buy, or any commuting expenses. The lack of commuting may even help reduce your car insurance premiums a (little) bit.

I'm sure you've already taken most, or even all, of the above into consideration, but if not, it's offered here as 'food-for-thought.'

Hoping that all works out for you... Enjoy your upcoming retirement![/size]
 
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A lot depends upon how you feel about your job. I "retired" at age 59 due to a layoff. Although I enjoy woodworking, I'm bored and would much prefer to be working.

As far as medical insurance is concerned, once COBRA runs out (if the company won't give you medical insurance) you'll pay through the nose - if you can get it. Probably $1,000 per month just for coverage for you - and even more for your spouse. Don't believe the figures you see on those health insurance company web sites. When you apply for those plans, you'll find that they won't underwrite you at those rates. If they agree to cover you, it'll be at a MUCH higher rate.

If you like your work, and you think the job will still be there, stay until you're 65 - it's only a few more years. You'll get more social security and Medicare is a great medical plan - much better than anything you'll find on the open market.

Mike
 
Jim beat me to the insurance issue. It has been a major factor in my decision to work for at least 3 more years.:( It's not really that bad. Most days are still fun. Just be sure to be able to keep the spiny addiction funded.;) Best of luck in your research.
 
There has been some really good advice given. Here's one way to feel out your gut:

When you wake up in the morning, imagine you've made the decision. Let it be that you've retired. How does it feel? Just let it sink in and let your feelings flow.

Next day, same thing, only this time you haven't retired.

Crunch all the figures, but include what your gut tells you too.

just my $.03 [allowing for inflation in retirement.]

Oh, one more thing, when your co-worker told you his situation did you think poor guy, or lucky fella?
 
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I just realized.....there are a couple of knuckleheads here that were involved in "lathing" me last year........In a couple of months I was going to purchase a much bigger mustard lathe, a large b/s and dust collection for my shop. Now......I don't know but


That lathe..........may be thing that prevents me from taking the offer......

That gift could just keep on giving.........


Thanks guys?:huh::eek::rolleyes::D
 
I just realized.....there are a couple of knuckleheads here that were involved in "lathing" me last year........In a couple of months I was going to purchase a much bigger mustard lathe, a large b/s and dust collection for my shop. Now......I don't know but


That lathe..........may be thing that prevents me from taking the offer......

That gift could just keep on giving.........


Thanks guys?:huh::eek::rolleyes::D
Ken, how about this:

You buy the bigger lathe, send it to me, then go ahead and retire. I'd be willing to take one for the team so the lathe doesn't prevent your early retirement. Works for me. :rofl:
 
Ken, my Dad retired a bit early, got a good lump sum payment and all his medical etc etc.

The kicker for him was that he worked in a office with about 5 other guys (he was an electrical inspector for the BC Government for 30 years). Some of the guys that he had worked with for 20+ years had already left and been replaced by new guys, and the last couple of guys he knew well were taking the retirement package, so he was not wanting to stay, add to that, I think he was just ready to retire, he had his fill of the whole government thing, way too many rules and regulations that seemed to change weekly, so for him, he was HAPPY to leave a bit early.

I think he left some money on the table, but not much by quiting a few year early. He invested that lump sum, sold one newer car, bought an older van, and has been really enjoying retirement for 10+ years now. He builds and flies RC model airplanes, so he had LOTS to do, now he says he is busier that when he worked full time.

About the lathe, buy your last lathe, just be done with it, you know you want it, and you will put it to great use. :wave:

Lucky Guy! :thumb:
 
Ken

There is lots of good advice here so I won't repeat that. You might want to do as much calculating as you can, but then find a fee based financial adviser I believe a CFA is the designation of the most rigorous accreditation out there and buy an hour or two of his/her time to review your analysis. Having a disinterested person to talk with about a decision like this can be very helpful.

That said, one door closes, another opens. You will be amazed at the alternatives that come up when you don't have to do the job every day. My wife and I quit our "big" jobs when we were 45, we went sailing for two years, then moved to Florida, since then we started a little computer training business, have done some consulting projects, renovated a house, traveled a lot -- oh, I started to learn something about woodworking! We are careful with our money but, after 15 years of being "under employed" we've done fine.

This will be an exciting time for you and your wife as you consider the possibilities. I am not saying that you should jump for it because Jim is right, many men have a lot of their identity tied up in their jobs so without that, where are they? And the job provides structure to the day, so you need to find something to replace it or you'll slip into Oprah land and we know that you don't want to do that!


The lathe purchase is an excellent test of whether you are financially and emotionally ready for this transition. It is difficult to consider purchases when income is reduced from your prior norms. Over your life time, this one purchase is chump change. But a whole series of similar decisions could represent significant funds which could cripple your financial security. So, lathe now, no new(or new to you) car for several more years? You get the idea.

Good luck

Jay
 
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I'm only 58 and can't touch my 401K without paying penalties for a while......


It's a good decision to make ......I guess....


Got to do some research!

What to do....................

Well you need to do more research as if you are no no longer work for the company there are ways to make use if the 4o1k plan at a much earlier age without penalties. If may have to be transfered to an IRA but basically it means you have to set up monthly payouts that you can't adjust for a set number of years. The other thing is once you start taking advantage of any tax defered plan then you can't contribuate to another tax deffered plan.

I have forgot the details but went all thru it when I planned on retiring at 55. But my company made some great moves and our stock went from about $70 a share when I was 52 to around $40 when I was 55. I thought this can't get much worse and when I was 57 it was around $18 a share. Of course we had to keep most of it in company stock until we were 55 so I am still trying to save back to where I was at 52 while I am headed for 61.

I can't imagine not being happy retired if there is enough money to more or less do what you want to..

I am supposed to have retirement insurance but the way companys change the rules anymore who knows...

Good Luck with your decision but there are ways you can use your 401k without penalities, great care is required to do it right..


Garry
 
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