So it starts to slow down eventually? That will probably be much more healthy for me.
Awhile back I looked at a statement and ran the numbers. It seemed like the number of dollars matched around age 80. That is, if you started at 62 and totaled the dollars and divided by 18 years, it would be about the same as getting paid more at 70 if you divided by the ten years till you turn 80. Moral: if you know you’re going to live past 80, you’ll get more dollars by waiting longer. But what about interest on the money you start collecting at 62…?
…or inflation? Prices are getting pretty wonky in the US lately. Retire early and see how those dollars spend in a few years. I’m wondering too if people have 401K savings that will be affected by what’s going on in Ukraine.
The other thing is that a lot of people don’t retire at 62. They keep paying into social security, thus raising their later payoff. If you have a job that has a pension instead of social security, that changes things too.
For me the decision to retire was based much more on how much money I’d accumulated, and how secure that made me feel, rather than how sick I was of my job. I’d been sick of it for a long time, but I felt I had to tough it out until my savings/pension/Social security was enough to make me feel secure.
An interesting question. Do you mean value to you or value to society? Or both?
So for example does my job have value to me? No, as I’ve noted before, not particularly. I have a neurotic need to do a passably decent job when I’m working and I never mind going to work. But when I’m off I could scarcely give a shit about what happens there. One of many reasons I never had any aspirations for management is that I never, ever wanted to take my job home with me.
Does my work have above replacement cost to society or my employer? Possibly not and yes, respectively. I’m experienced in a niche field and much of it is the sort of experience you can only gain by a lot of seat time. Replacing me isn’t exactly hard, but it is also not quite trivial. At the end of the day my employer would probably prefer to employ me until I more or less drop dead. Replacing me would cost roughly the same in labor expense (not exactly, but close enough in the grand scheme of things) and be at least a moderate hassle.
Ah, but society? As above I have some minor added value as an employee, but I am occupying a scarce well-paid job that doesn’t strictly require a college degree (though a number of my co-workers have one). If I can retire right now without penalty isn’t society better off if I make room for someone else? My pension + the salary of a new employee would easily exceed what I make alone.
I actually could retire without penalty as of a couple months ago, but probably won’t for ~1-3 years for reasons. But that is strictly speaking selfish of me 
. Society would likely benefit from me leaving now.
The breakeven point, from a pure dollars point of view, is indeed around 80-81 years old. Whether one should take it early or late is very individualistic and depends on things like life expectancy, if you are still working at 62, need for the money immediately or not, current accumulated wealth and where that wealth is.
I don’t need the money but I can take it early and invest it which will very likely be better for me than waiting. In addition, every dollar I get from SS (tax free) will be a dollar that I don’t take out of my 401k (taxable) right away. I am already retired and there is not way that I will be working at 62. In my case, taking it early is a no brainer.
I see both as commonly intertwined. Part of the value work has for me is the fact that I think I am doing something worthwhile, of value to society or least some other individual members of society. The paycheck doesn’t hurt. But I do, selfishly, have a need to consider myself as contributing to the greater good.
My working longer won’t keep anyone else from entering the field.
I don’t look at it this way. My goal is to maximize my SS payment as protection against outliving my other sources of post-retirement money. If I die before the breakeven point, well, I’m dead, what do I care about my money? But if I should live until 105 (I’m laying 20-1 odds against) my investments might have been used up, but SS will keep sending me checks.
You, for some reason, cut off all of my other reasons. Life expectancy is just one piece of the equation. I have enough money to not need any social security. I am taking the approach that minimizes taxes and gives me the best return for my specific situation.
I was forced to retire at 64, a year earlier than I had hoped, but my company give me a great financial package to leave, which made it easier for me to walk away. After working 40 years I was ready to take some time off, and have since spent a lot of my time volunteering in my local community.
I started taking social security at 66 (age of full payment). I vowed to use up as much as I could before dying. I pity those that pay into the system for 35 years and then die after they retire, or worse, while still working. At least their spouses get some of that money.
Fortunately, my wife and I are financially secure, at least for the next 25 years. My house is paid for, and our 3 kids are out on their own earning money. I hope to be able to do some traveling once that becomes easier, but I’m in no hurry. My wife is still working, and my social security check comes every month. We can almost live on that and her wages.
I don’t miss work, but I miss my paycheck. Let’s hope the stock market doesn’t crash in the next 10-15 years and I don’t lose most of my investments. Thanks to the ACA and Medicare medical insurance isn’t eating me alive.
Thing is that @Roger_That’s analysis is not one that is easily amenable to a minimizing taxes and best returns approach. It’s more in the behavioral economics arena: a dollar isn’t just worth a dollar, especially in face of incomplete information (such as how long will I in fact live, and what will my investments actually return). The dollar that assures basic needs for food and shelter is worth lots more than the dollar that goes towards an extra latte.
In this case a few thousands more when they have all their basic needs and comforts already met is worth much less than the assurance that they do not have do worry as much about basic needs being met if they far outlive expected life expectancy. It’s emotional and psychological, not impossible to put monetary values on but difficult to.
A surety that if they beat the odds on life expectancy and are exceptionally long lived they will have an annuity that minimizes their risk of living that time as a pauper is worth something of value that is minimally difficult to put a dollar value on. Even if odds are great that doing so will not maximize their dollars (net, inclusive of tax impacts and lost opportunity to invest that money) … because odds are that they will die before then and that their other safe investments won’t tank.
Yeah, I’m going to get by on my investments, etc, through age 80, barring catastrophe, and I hope I’ll still have a goodly amount socked away at that point too. But if disaster comes, and all my savings disappear, I’ll want the largest possible SS payment to have for the remainder of my life.
I can’t make any realistic assumptions based on my family history:
One grandmother lived to 100.
The other grandmother died in a car accident at age 65.
One grandfather died of a heart attack at age 69.
The other grandfather died in combat in WWII.
I’m retiring soon. My end date will be at or after mid year this year. My banked sabbatical will carry me on the rolls for nearly 6 months after I retire, to get me to age 65 and full pension (I’m only at 98.2% vested now) plus medicare, and my unused sick time will pay for the same health coverage thru work I have now, for a good 15 years at least. I’ll have 35 years of paying into SS at the max amount, so with that plus my wife’s share of that (half my SS amount as her spousal payout will be bigger than her SS payout) and the pension (which will continue until both my wife and I are dead), I’m hoping I won’t need to dip into the nest egg except for the frivolous necessities like travel, etc.
I’m burnt out. Modern medical bureaucracy has disillusioned me, Covid has fried me. My work has value to society, and not enough people are entering the field so I expect my departure will reduce quality of medical care in our system but I have had enough. My health has suffered, I have 6 different specialist appointments lined up over the next few months, and I do NOT want to work until I die. It’s time and then some. Enough with the damned delayed gratification, which has been my guiding principle for too long. That 6 months of sabbatical I have coming is derived from vacation time I didn’t take over the last 20 years. WTF was I thinking?
What I discovered when I retired 5 years ago is that it isn’t the amount of savings that counts, it is cash flow. I just hit 70 and went from getting half of my wife’s SS to getting all of mine and her getting half of mine, which is a lot more than all of hers. That gives us enough so that we can live on the income generated from our investments quite nicely. I don’t care what happens to the market. I only sell to reduce the amount I’m going to have to sell when I start having to cash in more of my IRA. We only dip into capital for major projects for the house, or for new cars. I’m basically good forever.
A lot of our investments are in dividend producing stock funds that are less volatile than index funds. We made less in the boom, but we lose less in crashes.
As for when to retire, I retired in time that I and my wife could get healthcare covered by COBRA before we went on Medicare. I liked my job just fine, but I didn’t like getting to it. No alarm now, no 40 minute commute, no worry about traffic. We get up when we get up, get the paper and read it while drinking coffee and then get dressed. Going to stores on weekdays when there aren’t a lot of people there is a big plus also, especially with Covid.
I’m as busy as I want to be. And I don’t freak out on Sunday night about the stuff I wanted to get done during the weekend but didn’t have time for.
Before I retired I went around the house and made a list of stuff that I wanted to do, and put it in a spreadsheet. I had tons of entries.
I get to stay active in my field. I even presented an invited paper after I retired, and I still have my column.
My only regret is that I didn’t stay long enough to get laid off, which I knew was coming but took longer than I thought.
If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2022, that limit is $19,560 .
Call it mad money, travel money, rainy day money…if you want to continue working something part time, seasonal, doing gigs, or whatever, to a certain extent you can do so without reducing your benefits.
Do you have a plan for your sabbatical or is it just whatever you feel like?
the stored hours are referred to as “Sabbatical” but it’s just going to be used to keep me on the payroll longer at full salary for over 5 months after I stop working. It’s not the old school sabbatical where one went off to rest, relax, recharge, come back better for it. I wish we had those, but our system has no way to get much more than 2 weeks off at a time.
I just retired this past fall right after my 69th birthday. I made up my mind I was not going to work (at least at a “career type job”) much into my 70th year so in June I served notice I was done. Zero regrets.
I retired 25 months before I hit 65, on 12/31/99. Basically, they made an offer I could not refuse. First off, 75% of that 25 month’s salary. But the biggie was that they had been using outdated actuarial tables that paid 8.5% of my accumulated pension fund and that was going to go down by a significant amount (maybe a whole point) for anyone who retired after 1/1/00. In Canada, neither health insurance not medical bills are an issue. I was reasonably happy in my job, but the part I really enjoyed–mathematical research–could and did continue. I think that latter was the biggest reason I am so satisfied to have retired. There are 29 items in my CV dated 2000 or later.
That’s still somewhat individualistic - you want to maximize your social security as protection against outliving your other sources of retirement money , but I’m not worried about that because I have a pension that will keep sending checks until I die and to my husband after that if he survives me. So maybe I’ll decide to collect at 62 and buy those lattes* since I’m not worried about my basic needs.
* Not really lattes, of course, but other things I will want to do in my sixties that I may not want or be able to do in my eighties. There’s a difference between vacationing with a six year old grandchild and vacationing with the same grandchild twenty years later.