. So for a long time I planned to retire at age 60 but transition into retirement by working part-time for at least a few years.
The more I study this particular plan, the more I realize I'd be better off just trying to put in 1 additional year of f/t work at the bank.
Mainly because, when I think about it, there don't seem to be many part-time jobs that would pay more than $15/hr. So based on working a 20 hour work week making $15/hr, I would make more money working full-time for one more year at the bank than I would working part-time for seven years!
Also, I was under the mistaken impression that I could get health insurance at the bank as a part-timer. I learned at some point that no, you have to work at least 30 hours, which is pretty much the same as most other employers.
So the smarter choices would be, after working the expected 3.5 more years til I turn 60:
1. Work 1 more year full time with full benefits.
Or if i absolutely felt i needed a break, I could ask for:
2. Work 1 more year at 30 hours with full benefits.
This would come with a commensurate 25% decrease in salary, I assume, at about $61,500 based on current income. Assuming they even went for it. Assuming they don't lay me off before this time!
Unhappy retirement conclusion
March 20th, 2016 at 06:17 pm
March 20th, 2016 at 07:24 pm 1458501868
March 20th, 2016 at 08:15 pm 1458504940
March 20th, 2016 at 08:40 pm 1458506440
Rob, in my mind it's "bad" because I so dearly want to quit working now!
March 20th, 2016 at 09:09 pm 1458508189
March 20th, 2016 at 09:19 pm 1458508799
March 20th, 2016 at 09:47 pm 1458510465
March 20th, 2016 at 11:03 pm 1458515014
On the other hand, if you are able to keep up the prodigious savings 34K/year savings rate during this time, then if you earn 5%/year, your retirement kitty should be about 985K retiring at 60.
Switching to a more conservative strategy netting 3% at retirement (you'll note that I am using very conservative numbers here, more conservative than you used), nets you annual withdrawals of 42.5K over *40* years, and more if you adjust your life expectancy downward from 100 to 95 or 90.
Combined with your Social Security (which has the benefit of built-in inflation adjustments) of at least 24k, that's 66K, more than DOUBLE your current spending of 32K per year. Yes, health care is projected to grow at about 6% per year, but you are concerned primarily with the five years from 60 until Medicare kicks in at 65. Medicare will help significantly with the health care although you will want a Medigap policy as well.
Social security WILL have some changes, but I think it is unlikely that they will raise the eligibility age further for people over 55 (when they raised it from 65 to 66 back in 1983, it only affected people under age 45, so they gave people 20+ years to prepare for the additional year of work; even though the Republican proposals to raise the age are more aggressive than this, I really think that they would give people at least 10 years to prepare for an additional year increase in the retirement age), and there are a variety of ways they could change the system that would raise more money so that benefits would *not* be decreased. But even if they *did* decrease benefits, the decrease wouldn't be entire, it would be to 75% of benefits and that is currently scheduled to kick in in 2035. I really think you are fretting too much over this. Relax, continue to do that great job saving, and see where you are emotionally, physically, and financially in a couple more years. And don't get caught on "magic numbers" like a million or 4% safe withdrawal rate...those are very, very rough rules of thumb and not comparable to a real retirement plan analysis based on your asset allocation, location, expected longevity, and "burn rate" (spending patterns), which I still suggest you have done in the next year or two by a fee-based Registered Investment Advisor/CFP. (RIAs have a fiduciary duty, but broker/dealers do NOT. If someone's credentials feature their Series 6, 7, 63, &/or 65 licenses and no CFP or CFA certification, inquire seriously into their fees. Those licenses, especially when they are the only financial credentials, tend to be code for "I'm a salesperson" and I will suggest to you those investment options that maximally feather MY OWN next while also nominally meeting your goals."
March 20th, 2016 at 11:19 pm 1458515972
People need less than they think. It's a personal thing to really investigate. Also do you have more in working quarters than taking SS from your spouse? What about taking from spouse, delaying your benefit then claiming your benefit? So much to work around