NeuroTalk Support Groups - Considering retirement...

NeuroTalk Support Groups (https://www.neurotalk.org/)

- The Stumble Inn (https://www.neurotalk.org/the-stumble-inn/)

- - Considering retirement... (https://www.neurotalk.org/the-stumble-inn/106508-considering-retirement.html)

Considering retirement...

I have filed for retirement from the State of Illinois on May 31, 2012. I know that is 2 1/2 years away.;) But if you retire at the last minute, you miss out on certain benefits.

I could not sleep last night as I started to second guess myself on this whole retirement thing. But it is a little too late to do that since the Vice President and Dean have already set things in motion. The only way I can get the benefit of teaching for the two next summers and increasing my average salary by a significant amount was by declaring a firm retirement date. They calculate your salary based on the average of your last four years. Plus, I will get reimbursed for about 25% of my accumulated (about four months) sick days. The longer I teach the greater the possibility I might need to use them and then miss this advantage.

I meet with a retirement counselor on Tuesday. I am taking a penalty for retiring before I am 60, but I seriously do not think I could make it until then. The penalty is a bit higher than I had anticipated, but if my calculations are right I will still make about 50% of my salary. Plus there is a 3% cost of living raise each year. In addition, will also get a payment due to the fact I do not have a survivor that I can add to my monthly pension, put into an annuity, or take as a cash payment. I will only have to pay federal income tax and medicare.

At this point the state does not require us to pay for health care once you have retired and have 20 years. (Of course Illinois is 7 months in paying its insurance premiums right now.:rolleyes:) I should be okay as I will have a decent savings account (cd's) and a few other small annuities, etc, plus no debt, but this is still scary. If I had taught until I was 60, I would have received about 72% of my final salary. And once you reach 30 years, you receive 80% which is the maximum. Since this is only my 21st year, I don't see how I could possibly do that. I am not even sure I will make it through he next 2 1/2 years. Am I making a huge mistake? Disability benefits and disability retirement are less.

If you manged to read this entire post, thank you:)! Sorry for the long ramble. I am just trying to think this through. It is scary not knowing what the future holds. I guess I should have met with the retirement counselor before I submitted my letter, but I could not get an appointment prior to the deadline for guaranteed summer teaching.

Any advice would be appreciated.

Quote:

Originally Posted by barb02 (Post 582079)

...It is scary not knowing what the future holds...

You have traditionally known what the future holds?? :eek: :Bow::Bow::Bow:

You'll be fine, Barb. When I quit working, I was surprised by how much less life costs without the financial demands of a job.

It's a given that at some point, we all stop working by choice or fate. Choosing to reward yourself with a little freedom before you keel over for good is the best gift you can give yourself. :)

It's like gambling it seems. Walk away now with a sure thing or risk losing it all for more. I think you made a good choice. If you still can, use this free time to do the things you want. In Zen they say an inch of time is worth a foot of gold. It is. It takes a new mind set and acceptance. if you were on Deal or No Deal, I'd be yelling "Take the Deal!". IMHO

you are doing the right thing. its amazing how much lower your expenses go when you stop working. Less gas, no dry cleaner, no packed lunches, no morning coffee out, no supplies, less make up, less clothing budgets, and so forth. you will be just fine, and before you know it the two plus years will zip by, and you will be saying "oh thank goodness!"

its scary to start or stop something. You have done your homework, you have planned well, and prepared well. Now, sit back and enjoy the fact that its all planned and waiting for you!

Good for you, Barb. I wish you well! :hug:

PERS? public employee retirement system? any benefits due to you under Social Security?

I do not have to pay into social security, and do not have enough credits. This is a retirement system for state university employees.

I'm a freak but I've been worried about my retirement since I was in my 20's, lol. It sounds like you are doing the smart thing.

Is there any way you could teach or tutor part-time etc. to add a few extra dollars if you become bored or in need?

This is exciting. Congratulations!!!

Six months after retiring, I can teach one class if I miss it.

I started planning my own retirement when I was 25. opened all the right accounts, and made the 401k dance happen, and filed all the right paperwork. As a state employee, at 20 years you get a full retirement with full benefits, so I knew I could get out at 45 and be ok. Woo! it pays to think ahead. I was able to walk away, even tho I was just a couple years shy of my 20, I had all the right contacts, and all the right accounts, and since I had been planning for it anyway, my budget survived well.

Wow, that is a good plan! I will be 55 with 24 years and still take about a 25% penalty of what I would get if I was 60. On the other hand, I will be receiving a pension for five years before I turn 60. I understand why there is a penalty.

I think you're doing the right thing Barb. It's better to make the decision now and be able to plan ahead. The MS decided for me without any notice. I never thought I'd be retired at 43!

My best advice is to make sure you have something...anything...to occupy your time that will give you some social interaction. That's what I've been struggling with. Volunteering somewhere sounds like something great for you if you're up to it. Best of luck to ya :)!

I just had an appointment with a retirement counselor with my pension plan. I am feeling ok about my decision. I just hope I can last another 2 1/2 years:).

What would happen to your plan, if you have to retire earlier?? Would it be much less?

You can't retire until you are 55. I would have to take sick leave and then go on disability. At 55 I would then be on either diasability retirement or retirement depending on which one paid the most. It would be significantly less. Over the next 2 1/2 years, I will be able to increase my average salary by over 15 % through guaranteed summer teaching. Your pension is based on your age, years of service, contributions, and the average of your last four years of teaching. I will also be able to use up to one year of sick leave to add on to my years of service, and be reimbursed for about 4 other months of sick leave. I also found out that since I am single with no children, I will receive additional money that I can either take as a cash payment, roll over into an annunity, or add onto my monthly pension. I will just have to hope for the best:)

Long story about how planning helped me.

Feel free to not read, if you are not interested.

First of all, congrats, Barb, that it looks like things are going to work out for you, even though it means taking a penalty. I agree, that if you are worried about being able to stay there long enough, early retirement sounds like a good option.

I "retired" (became eligible for disability) at age 46.

I had planned, somewhat, for my retirement, too. In the earlier years of our marriage, we contributed to IRA's, but, as kids came, and family expenses increased, contributions to those went by the wayside.

Thankfully, a job that DH held for 8 years had contributed 7% of his check all of those 8 years towards a retirement plan which we rolled over to a mutual fund IRA when he left there.

At his current job, we contribute 6% of his check, and they do a 50% match by contributing another 3%.

Also, I worked for a county health dept. for almost 9 years, then a school district for 4. They are both on the KPERS (KS Public Employees Retirement) plan. I think lots of states have those.

Here's where my planning really paid off. They deduct 4% of our check. Except for the first year -- nothing. To be "vested", you have to contribute for 10 years. 3 of those years, I could not contribute, because I worked less than 20 hours per week.

So, I would've contributed:
9yrs(county) - 1(first yr) - 3(<20hrs) + 4(school district) = only 9.
and I needed 10.

If you are vested, you are eligible for LTD and retirement. If you are not vested, all you get is that 4% of check back, with 4% interest. Because I worked only part time all of those years, I contributed less than $5,000. That's all I would've got, with 4% interest.

But, I chose, after my first year, to "buy" into the plan, paying double (8%) for a year. Because of that choice, I managed to just barely meet that 10 year requirement before I was let go. Was actually let go from both those jobs. Ran out of FMLA time at county (was off 8 months, FMLA gives you 12 weeks). And HR Director at school district got tired of my running out of sick time every year, and taking the FMLA time that I was entitled to.

Because I am vested, I get minimum amount of LTD ($100/month) because I also receive SSDI. If I did not receive SSDI, but was deemed eligible for their LTD, I'd get 60% of wages.

I also, assuming that I stay on their LTD plan until retirement age (almost 20 years away), will receive retirement benefits as if I worked for them for approx. 30 years, rather the 10 that I did. It will be over $600 month.

So, from LTD, . . .
instead of getting about a $5000 check, + 4% interest,

I receive $100/month for about 20 years (approx. $20,000)
+ over $600/month from retirement age until I die.

If I would not have bought that year of my plan, when I was in my 20's and did not anticipate MS and disability, my financial future would look much different.

We did have to refinance our home in 2003, due to medical expenses not covered by our insurance. DH's company is based in St. Louis, and they had no in-network providers near us (Wichita, KS area). We didn't understand, at the time, some of the out-of-network costs, related to all the tests related to dx-ing MS, and two surgeries that I also had during that year. Thankfully, although we started off with a 30-year mortgage again (we had only 5 years left, and our second mortgage was slightly higher than our first), we should have that paid off by the time we are 65. We are much more savvy about insurance now, after tens of thousands of dollars in medical bills.

And, like everyone else, the value of our investments went down with the economy. But, we are just sitting tight, and assuming that they will continue to go back up. We have 20 years to before DH retires, and, we're managing to pay what we had planned to contribute to our kids college expenses out of our current income, so we don't have to withdraw anything while it's value is so decreased.

~ Faith

Quote:

Originally Posted by Dejibo (Post 582465)

Kudos to you!!!

One of the first things I thought when I was diagnosed with MS was that thank goodness my finances were in order, cars and houses paid off etc. I can't imagine dealing with this miserable disease along with not having enough money to pay the basic bills.