Most people love their jobs, it's the management (thus morale, pay, etc.) that makes them leave/switch/retire. Quality of life, commute, and health condition are also factors when you should call it quit.


Yeah, I doubt that. You think the woman at McDonalds loves asking if you want fries with that? Or that the garbage man enjoys picking up your trash? Even in the professional world I still don't think most people really love working; they do it because they need to pay the bills.

Anonymous wrote:Most people love their jobs, it's the management (thus morale, pay, etc.) that makes them leave/switch/retire. Quality of life, commute, and health condition are also factors when you should call it quit.

Anonymous wrote:The pearl clutching on this thread about not achieving the full pension benefit is pretty strange - what about the opportunity cost of wasting another 5-10 years in a soul-sucking job? I'm planning to retire after 20 years with the Feds at age 51, and have no qualms about having to ratchet down my retirement spending by 10% as a result.

The pearl clutching on this thread about not achieving the full pension benefit is pretty strange - what about the opportunity cost of wasting another 5-10 years in a soul-sucking job? I'm planning to retire after 20 years with the Feds at age 51, and have no qualms about having to ratchet down my retirement spending by 10% as a result.

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote: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, ...
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.

But person B didn't collect the pension for ten years while person A did. Not worth it.

Right, I should have added, it also depends on how long you think you're going to live. And this was only one example, and the ages and incomes obviously could be changed. The point was only that there is no one-size-fits-all answer. Heuristics like "you should never retire before full pension" are overly simplistic.

I would be surprised if anyone would your scenario of working until 72.

Fine, perhaps I didn't put enough thought into the hypothetical parameters in order to make it a balanced hypo. I really just came up with the numbers off the top of my head. Let's adjust the numbers a bit then.

Change it to: person A retires at 55 with 20 years of service and their salary at retirement (and high-3) is $100k. Their pension benefit (deferred until 62) will be $20k per year.

Person B works another 7 years, retiring at 62 with 27 years of service. Cost of living adjustments have brought their salary up to $110k. Their pension benefit will be $33k per year. So the difference will be about $13k per year for working those last 10 years.

Depending on your 401k balance, your budget, and your priorities, you may prefer to be person A or person B.

But, the point isn't really in the specific numbers. It's that there is no single one right answer that works in every situation.

Someone else already mentioned, but the difference is not $13K per year due to the opportunity cost of not getting money for 7 years. 7 years x 20K=140K, so breakeven is 10 3/4 years-almost 73. Also, pensions get COLAs plus you could plan to invest part of that pension income and get a return. That said, I would not plan to retire if you're a healthy 55 year old.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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, ...
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.

But person B didn't collect the pension for ten years while person A did. Not worth it.

Right, I should have added, it also depends on how long you think you're going to live. And this was only one example, and the ages and incomes obviously could be changed. The point was only that there is no one-size-fits-all answer. Heuristics like "you should never retire before full pension" are overly simplistic.

I would be surprised if anyone would your scenario of working until 72.

Fine, perhaps I didn't put enough thought into the hypothetical parameters in order to make it a balanced hypo. I really just came up with the numbers off the top of my head. Let's adjust the numbers a bit then.

Change it to: person A retires at 55 with 20 years of service and their salary at retirement (and high-3) is $100k. Their pension benefit (deferred until 62) will be $20k per year.

Person B works another 7 years, retiring at 62 with 27 years of service. Cost of living adjustments have brought their salary up to $110k. Their pension benefit will be $33k per year. So the difference will be about $13k per year for working those last 10 years.

Depending on your 401k balance, your budget, and your priorities, you may prefer to be person A or person B.

But, the point isn't really in the specific numbers. It's that there is no single one right answer that works in every situation.

Every situation is different. I definitely don't want to hold out for a full pension then drop dead in 3 months after retirement.

I have a pension where the difference between 25 and 30 years is huge. If I retire at 25 I get 2K per month. If I leave at 30 I get almost 4K per month. Since this is for the rest of my life the difference is huge. The pension is structured to reward long term employees.


Wow what a terribly stupid system. Wherever you are (private company or public institution) I can't imagine who thought it would be a good idea to have a big bump at some arbitrary point like "30 years". Actually, I assume it's public, because any private company would be looking to find whatever cause necessary to fire people with 25+ years of service.

Anonymous wrote:Very broadly speaking, the actuarial reduction for commencing a pension before a pension plan's normal retirement age (generally age 65) is 6% for each year. So for someone to commence at age 55 instead, his pension will be cut by more than 50% of what it would have been had he stayed on to retire at age 65.

A someone mentioned though, some plans provide an encouragement of sorts for older, long-service employees to take early retirement -- i.e., 30 years of service and at least age 55. Generally, such an early retirement benefit is subsidized (i.e., there is no actuarial reduction and the individual is entitled to the "full" pension benefit as if he'd worked until age 65). Alternatively, instead of a 0% reduction, the plan might provide for some other reduction (i.e., subsidy), but in any case less than 6%. I have to assume your sister is referring to a pension plan that includes a special subsidized early retirement benefit for someone who attains a magic number under the terms of the plan, such as 30 years (or 25 years), in order to be eligible for a full subsidized pension. If she's just referring to the normal 6% actuarial reduction for commencing early, then her concern is still valid (6% per year adds up!) but less so.