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Deciding When to Retire

I'm almost 63 and have worked at my job (IT) for over 20 years. In an effort to decrease staff, my work is offering (to anyone eligible) a great early retirement option. I will get 16 weeks of pay and insurance (at what I'm paying now) until I turn 65.

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I really like my job so I'm on the fence. If I retire, money will be tight (my husband just retired). The problem is our house payment. A few years ago we refinanced and in hopes of paying it off early, took a shorter loan (at a great rate) with high payments. When we were both working, it was fine. Even with my husband's decreased income, I could handle it. However if I stop working, my take home pay will go down by about 15%.

I first thought of taking enough out of my retirement to pay it off, but the tax "hit" would be horrible. Our other consideration is to refinance again. The lower loan amount and a longer term and hopefully even better interest rate should decrease the payment by at least half. The other option is for me to keep working for two more years and hope that the next step at work isn't layoffs. I'm a very frugal person and don't have many more places to save money. I'd really like to retire now. Your opinions and suggestions please? Thanks.

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By Marie S.

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October 23, 20110 found this helpful

I believe the current age to receive full benefits is 66. Retiring prior to that age will give you less in your Social Security check. When you turn 65 you will enroll in Medicare and that cost will be deducted from your Social Security check.

Also when you go over to Medicare you will need a supplemental plan and a Plan D prescription plan at additional cost.There are many supplemental plans to consider. Going to socialsecurity.gov may help you sort it all out.I would figure out what all your costs are per month,per year and the amount of expected income to help you decide if you will have enough cash. As you well know prices on every thing rise every year.

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I am not advising you what decisions to make as only you know all of your personal details. Be sure to weight all your choices carefully.As an aside, I retired at 62 and draw social security,a pension plus income from investments such as IRA and stocks.

I am on Medicare but my company that I retired from will no longer carry its retirees on there supplemental, prescription and dental plans. So next year I will have to look and pay for those items. I have been advised to forget any thoughts of dental insurance as it is too expensive. Good luck.

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October 24, 20110 found this helpful

My gut reaction is to stick it out for two more years. Consider your health and how good a shape your employer is in. It looks like prices of everything will only go up, and retirement doesn't though you will be surprised at how much money will be saved by not working; clothes, shoes, gasoline, lunches, gifts, etc. Be cautious. You will have to live the rest of your life with your choice.

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Retirement is great, but we were in good financial shape - no debts. And you may find you will want to work part time as retirement can be boring. One can only knit, crochet, read, watch TV so much. Retirement should be enjoyable; a reward you give yourself.

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October 24, 20110 found this helpful

If you have the option stick it out. At least until you are 65 and will go on Medicare (don't forget a suppliment like AARP). That way you won't be out the health insurance and you can continue making your house payments easily. When you no longer have to pay health insurance, you can retire in a better situation.

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October 24, 20110 found this helpful

Thoroughly research the refinance options you have. Exactly what you qualify for (now, before you retire or get laid-off) in interest rates, length of loan, and how much would your closing costs be. Depending on what you qualify for, that should help you make your decision. I understand wanting to "take what you can get" from the early retirement, rather than end up laid-off with expensive COBRA insurance. Been there too many times. But, try to make a rational decision, rather than an emotional one.

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October 24, 20110 found this helpful

Perhaps you could retire now and get part time job or both of you could get a part time job.

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October 24, 20110 found this helpful

I highly recommend retirement, but only if you can exist with what you will receive in any/all forms of monies. I age 50and my husband age 52 when we retired with probably a quarter of what most people retire on. You will find that a lot of the expense of working will be greatly reduced. Gas, clothing, meals, all that 'goes on' in the 'office' (gifts for births, weddings, other parties). So you will not need as much $$ as you now need while working.

A good financial adviser is your best bet, our guy has kept us afloat for 11 years with barely a reduction in our full retirement portfolios. We have just now (11 years later) begun taking a small payment out of our retirement funds and I really don't worry about it. We didn't have a clue what retirement was about, but have thoroughly enjoyed every minute. You never know what the next hour will bring and we decided to enjoy what we had when we could. We now have 2 grandchildren, a nice home with a small mortgage, a great church life, and volunteering for just about anything we want to.

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There are endless ways to spend your time. Again, think hard, figure good, and get the best advice you can. Enjoy! Your insurance is a a great perk. We do not have dental, I still have my husband's employer ins which will end when I turn 65 (medicare), he is now on medicare. We have to buy supplemental for him. So there are lots of little things to think about, just be sure and then do it! But again, I highly recommend retirement!

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October 24, 20110 found this helpful

In order to make your informed decision you need to talk to your financial advisor. You'll need less money than you think - I was surprised to find that I could live on a pension as I retired at age 50 (with medical and dental benefits though).

Since you have a background in IT you could always work part-time or through a temp agency to pick up extra money. In some states when you take early retirement you are still able to collect unemployment. Check that thru your company as they should know thru the offer they're giving you.

As far as the house I'd check to see if you qualify for a lower interest rate - sometimes with the same co. then you don't have all the other associated fees. Your car insurance will also go down as you're not driving to work! Good luck and I hope you can make the right decision for you! and your hubby too...can't forget him!

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October 25, 20110 found this helpful

If your health and his are good, 2 years is nothing. Keep working. Also, the adjustment to his retirement takes time. I wouldn't refinance. I would continue to work and save.

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