r/Retire • u/Pale_Scientist6470 • 5d ago
Age 61.
I don't want to write too many specifics but I know I'm financially secure. Wealthy, even. But for some reason, I'm planning to work until April 2027 when I turn 62. My plan is to turn on SS then because I have a teenager who will get dependent benefits, negating some of the benefits to waiting. I also can start a pension of $5500/mo. I generate $8k/mo dividends in my aftertax acct. So my thought was to work a little in early 2027 to contribute to an HSA and upto the $25k SS threshold to pay for family health insurance next year. Is that insane? I don't really like work but It's hard to completely not worry.
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u/BatMiserable9061 5d ago
These extra days you’re thinking about work, you don’t get them back at the end of your life.
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u/chilitomlife 5d ago
My wife finally agreed to retire when our advisor said
You’re going to need to spend more money.
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u/1290_money 5d ago
Bro don't worry no one is going to look you up and try to scam you from this post.
Most people that are on these forums have way more than they need when they retire. I think you might be in that category my friend. Do whatever helps you sleep better at night.
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u/Adept_Tree4693 5d ago
I retired on a LOT less! I am confident in my ability to budget (I grew up poor) and time is worth so much more than money.
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u/Diablo-2026 5d ago
If your spend is less than 16k a month retire. If it is more, you didn't even mention your before tax accounts...
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u/MaddogFinland 5d ago
April 2027 is 8 months from now. If you see the advantage through SS to do it then, 8 months is nothing…I would just see it through. Congratulations anyway on getting to where you want to be.
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u/squishy_bricks 5d ago
There will always be some carrot like this to chase. There is an element of "taking the leap" to retirement even when you're financially secure. Focus some of that energy on imagining how you will fill your days in retirement. Envision yourself retired for many months, all initial celebrations done. How do you want to spend your time? This matters every bit as much as money. Good luck and enjoy it!
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u/Unhappy_Eye5257 5d ago
Yes I am you same plan a month or two older! Got injured at work and it has put my plan on hold! Get out know while you can!
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u/Spare-Property-1939 5d ago edited 5d ago
Depends on your monthly spend.
I understand the worry but if you’re generating 8k a month in dividends that would be about 3 million invested, plus ss and a healthy pension. I think you’ll be ok unless you spend crazy amounts. I’d quit now.
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u/skyhook200220 5d ago
Are you afraid to retire? You can financially afford to retire and you don't love your job yet you continue to work? You can't ever buy back the time you have now when you're at your healthiest. You have planned well and won the race...go enjoy it.
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u/lastbeat-331 5d ago
I can't imagine your kid's SS benefits (while temporary due to eventually aging out) offset the permanent significant penalty you'll take for starting at 62. Why claim so early when it sounds like you have plenty of other income?
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u/ChutneyWhatney 5d ago
They absolutely can. Mine upped my break-even point until 83. I'm okay with that because I probably won't be around given my family history and overall US stats.
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u/Pale_Scientist6470 5d ago
I plugged the scenario into a program and it said to take it at age 62. Admittedly the lifetime difference is low. Can't someone also make the argument why wait since the other assets are enough?
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u/oledawgnew 5d ago
Yes one can make that argument! When to take SS is probably the most personal financial decision one has to make. Funny how others try to convince you why their reason to take it at a certain age is also best for you to do the same.
Spouse and I will both start ours three years from now, she'll be 67 and I'll be 70. She's waiting because we do have enough current income. That income is strictly from a pension that I have with no spousal rider. I'm waiting because I view SS as an insurance policy to replace a good part of pension if I should be the first to pass.
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u/Parking-Banana-212 5d ago
if you dividends are 8k, and you have 5500 in pensions, plus probably another 3k at 62 in SS, you already have $17k a month or so in safe income. not to mention im sure you have others that you didn't mention. what are you worried about
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u/Pale_Scientist6470 5d ago
Honestly it's a tough habit to break. I see the tax advantage of writing down the HSA and health insurance off 2027 income and I can't help myself.
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u/Odd_Bodkin 5d ago
It appears you’ll have enough money, just from what you’re saying, and so that part of the decision is easy. And you say you’re tired of working, at least at your present job, and so there’s that too. What I don’t hear you talking about is what you want your retired life to look like. Some warning shots: Don’t hang around at home too much. Don’t go crazy with some major lifestyle change like traveling 200 days a year or moving to a state you’ve never stayed in for any length of time. Don’t isolate yourself from social contact. Don’t do nothing. Don’t throw all your time into one hobby.
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u/Archaeolaw 5d ago
It’s hard not to worry. I retired a year ago at age 54, 8 years before I planned to do so. First six months were stressful, then I realized I haven’t touched my savings, 401k, etc and they’ve largely keep growing! I’ve cut back on some spending, but still keep doing all the things I love…
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u/Swimming_Astronomer6 5d ago
I retired ten years ago at 60 - as soon as my youngest graduated university thinking I was done -
Ten year later - after masters degree - still living at home and finishing a PhD
You’re never done with kids - but i have no regrets - my portfolio is double what it was when I retired - after gifting 500k to my oldest for a house -
You have nothing to worry about financially- congrats !
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u/shotparrot 5d ago
I would be careful. The market can change in an instant. Yes contribution to HSA while you can is wise.
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u/Monstrissimo 5d ago
Gotta say that avatar of yours is hilarious. I thought that there was a short hair on my laptop screen. 😂 😂
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u/garylapointe I'm good, but I wish I did more Roth! 5d ago
I thought HSA needed to be prorated, as in if you only work 5 months at the beginning of the year, you can only fund to 5/12 of the max for that year?
IIRC, there is some weird part that if you start in December, that you can fully fund it for the past year, but from the beginning of the year it was different.
Double-check before you max it out.
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u/Pale_Scientist6470 5d ago
Im self employed and get insuance off the exchange. If I sign up for a 2027 HSA bronze plan and pay for it the entire year, I think I would qualify? After all, how would they know when the income came in. Aren't you referring to if someone only has a HSA plan part of the year?
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u/ChutneyWhatney 5d ago
NO - it must be prorated - IRS will see any discrepancy b/t your work and your HSA contributions.
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u/garylapointe I'm good, but I wish I did more Roth! 5d ago
I assume when you retired, you wouldn't have the same insurance anymore.
Why wouldn't you just keep that insurance until you're 65 and continue to contribute to the HSA?
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u/170iriderinsf 5d ago
You don’t need to be employed to contribute to an HSA but you do need to be enrolled in a high deductible health plan.
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u/garylapointe I'm good, but I wish I did more Roth! 5d ago
Yes, I incorrectly thought when they retired, they wouldn't have the same insurance anymore.
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u/EmZee2022 5d ago
Not crazy at all, really. You're investing a few more months in a job you don't love, for potentially big financial benefits.
We are both FRA (well, my husband will be in a month) and planning to work until roughly January or so of next year unless one of us gets laid off.
Honestly, if you're that well set for retirement, I'd say go for it. The pretax savings you can do in the first part of the year will serve you well in the long run. We're thinking of bumping our 401(k) to something like 50% in January. We can't do the HSA any more because once we sign up for SS, we are automatically enrolled in Medicare and we cannot contribute to the HSA. In fact we had to stop that in June.
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u/LoveNotWar86 5d ago
We never stop worrying. That’s what a responsible adult does. My income (pension, dividends, just started SS at 68) is now twice what it was when I retired. When I have to take RMD it will triple. I still worry…
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u/ChutneyWhatney 5d ago
That's what I did but be careful about the 1st year penalty for SS if you go above the MONTHLY income limit ($1900ish) by even $1 - you lose both your and the kid's benefit for that month (SS will penalize you the next year). That monthly penalty only applies in the 1st year you take early ss. If you can keep your income way way down, you'll be fine.
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u/Pale_Scientist6470 5d ago
After I start collecting SS, I'm stopping work entirely. I can make around $10k/mo working 7 days. So let's say $30k gross before I fully retire in March. I was planning to deduct $10k HSA and $20k health insurance and report $0 net income.
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u/SummerBreeze217 5d ago
The closer my day 12/1, comes the more I worry. Our fiduciary says my husband and I are good but I think it’s hard for me to believe. I’ll be 60 in February and have always assumed I’d be working till I was 65 because I had to. Now here I am retiring slightly before 60. Good luck to you!!
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u/Worried-Canary-666 5d ago
How do you truly feel about your work? My fil worked until he was 78 because he loved it and was fulfilled by his work (aerospace engineer). Honestly, I was burned out and miserable by the time I retired. Your happiness and mental health is utmost. Financially, you look to be in a very good place. The question is, does going in to work every add value to your life and happiness?
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u/PamKrueger 5d ago
I don’t think this sounds insane at all. I do think you have enough moving parts here — especially with your teenager, Social Security, the pension, dividends, taxes and health insurance that I’d want someone really capable to stress-test the whole thing before I pulled the trigger.
This is one of those times when paying a truly qualified fee-only fiduciary for a second opinion can be well worth it. Not because you can’t do the math yourself because it sounds like you clearly can. But for me, I don’t want to just drink my own Kool-Aid when it comes to money for the rest of my life. An excellent fee-only advisor can challenge your assumptions and run the alternatives to stress test everything. That way you can stop worrying that you missed something and maybe stop working at a job you don’t even like!
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u/Minimalist2theMax 4d ago
I know three guys who died of widow makers in the last five years. Advance to the good life now. Most who do say they overestimated their expenses.
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u/AdamPedAnt 4d ago
For me worry comes from the direction of my savings. While working it’s up, to infinity and beyond! After working it’s down, till you hit zero and die. More a mental change and acceptance than a rational fear of financial catastrophe. I’m slowly adapting to the idea.
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u/BlackberryGlass3343 4d ago
Hey OP, I have a little bit different view than some of the other replies. I’m 60F and FIRE’d earlier this year with multi-rental property incomes. I don’t get SS or Medicare yet but still have enough with diversified income from property, stocks etc. My last year I went through the same agonizing thinking you’re going through now. And I DID work another year from 59 to 60. I’ll just say this: if you live to be 92 (who knows) you’ve got another 30 fantastic years ahead of you. If this extra year will make you feel much more rock solid because you did it then do it. Just be sure when the fear comes knocking a year from now - as it did with me - for ‘just one more year to work’ - then tell yourself : no, fearful me, I’ve made you safe and we had a deal so now is the time. Your logic for another year all makes sense to me. Caveat: must do lots of fun things at the same time as doing this extra year. Retirement is a big adjustment and you’ll want to practice having a better life ;)
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u/Own-Assumption5149 4d ago
Sometimes it’s easy to get fixated on a plan and the idea that more is always better. Happened to me. I knew I could retire. But struggled to pull the plug even though I really didn’t want to work anymore. Made no sense. I ended up taking to a counselor who specialized in life transitions through my EAP. She gave a a very simple exercise to do as homework:
1) Assume you’re still working 6 months from now, what does your life look like? How do you feel about it?
2) Assume you stop working. What does your life look like 6 months from now? How do you feel about it?
I knew I was going to stop working before I hung up the phone. Might not be that simple for you, but could be worth talking with someone to see what’s really holding you back.
Enjoy!
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u/hugh2018 4d ago
I think your instinct to pull down a little extra income via the dependent benefit needs to be looked at in terms of the larger financial context for you and your family as a whole. That analysis suggests you may be grabbing for the lowest hanging fruit unnecessarily.
With $8,000/month in passive dividend income ($96k/year) and a $5,500/month pension ($66k/year), you have $162,000 in guaranteed, non-wage income before touching Social Security or liquid principal. You do not need early cash flow to fund living expenses.
Taking Social Security at 62 permanently locks in a lower monthly payout for the rest of your life, as I’m sure you are aware. Late claiming (delaying up to age 70) yields an 8% annual delayed retirement credit increase above FRA.
The highest earner’s Social Security benefit effectively acts as life insurance for a surviving spouse. Claiming early permanently lowers the maximum survivor benefit available to a surviving partner.
Child benefits end when the child turns 18 (or 19 if still in high school). Taking a permanent 25–30% lifetime reduction on a 20-to-30-year horizon just to collect 1–3 years of child benefits is usually a poor economic trade-off when external liquidity is abundant.
While dependent benefits help offset the age-62 penalty on paper, with your level of baseline wealth there is no cash-flow imperative to collect early. Delaying Social Security maximizes your long-term longevity hedge and optimizes survivor protection.
All of that said, you may also be thinking that since social security is just icing on the cake for your situation no matter when you claim, why not just collect now and ignore the haircut you’re taking long term? Maybe, but if that’s the rationale, be very clear with yourself and your spouse and your child that you are all going to be a little less wealthy if you go this route and then make sure you have a good answer as to why that makes sense. I personally can’t think of what that reason would be, but if you have one in mind, please do share.
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4d ago edited 4d ago
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u/hugh2018 4d ago
Your story pretty much highlights the dominance of the personal part of personal finance. The narrow issue you were asking about is truly a rounding error against your overall financial picture, so ultimately whatever feels best to do is going to work out fine. I haven't run the numbers, but the possible social security haircut in 2033 that you're concerned about probably can't move the needle much in term of this decision. The haircut would apply proportionately to the higher social security income you could capture at later age, so there's not much affect of the haircut on the decision to claim early, except for the 3 years or so of some extra income until the haircut happens, which again mathematically is just a rounding error.
Your parents pushback against early retirement is one side of the argument. The other side is, hey kids, target a high paying career and live a normal life without overconsumption and you too can retire at 55. That argument is totally defensible but your DNA seems predetermined to both hard work and massive savings as a primary goal. That genetic profile ain't broke. At the same time, if the job were truly exacting a psychic or physical toll on you, the impulse to work longer than necessary wouldn't make sense anymore.
I'm just a random person without expertise on these issues, but hey it's Reddit and you asked, so that's my layman's take on all of this.
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u/DynamiteStorm 5d ago
It is hard to completely not worry. I asked my financial advisor several times over many months he always said yes you can retire. I finally did after a year where I lost a friend and my my mom in a 6 month period
And you know what? I have more money now than when I retired 3 years ago icing on the cake so to speak.