Reply to Retiring before you have a full work pension

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[quote=Anonymous]I would like to put some hard numbers on this because some people seem confused.

Let's look at FERS federal pension as an example.  Let's say person A retires at 62 with 20 years of service and their salary at retirement (and high-3) is $100k.  Their pension benefit (deferred until 62) will be $22k per year.

Person B works another 10 years, retiring at 72 with 30 years of service.  Meanwhile, cost of living adjustments have brought their salary up to, say $110k.  Their pension benefit will be $36k per year.  So the difference will be about $14k per year for working those last 10 years.

That may or may not be "worth it" to someone, depending on their other financial resources, budget, and the value they place on their time.  If you also have a 401k, and take social security, the pension at 62/20 years might be "enough" and they can enjoy their 60s in "early" retirement.

There is no one right answer of course.  It depends on the individual circumstances.

And of course, other pension systems work differently, further confirming the notion that there is no one "right" answer to when to take your pension.[/quote]

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