Mr. Moe has a new name for me, “Mrs. Wishy Washy”. He says (and I agree) that I’m super wishy washy about how we plan to retire, and he’s right. There are SO MANY options and ways to work it! This blog has been very helpful for me to process those feelings and encourages me to read how others who face similar situations make their own decisions. I have countless “tabs” on my spreadsheet to consider a slew of scenarios. Mr. Moe knows I watch the “books” like a bird of prey, won’t let us get into some dire situation and he implicitly trusts that wherever we go it’ll all work out. He’s much less of a worry wart than I am. We make a good balance.
One thing is for sure: We are in place for the next 3.5 years to allow Miss Moe to complete her high school experience. Why am I being so wishy washy on the below options? Well, looking at the scenarios in detail I think most any analytical thinkers might agree that each have some really great arguments and the one that doesn’t is the most emotionally pleasing.
The Three Scenarios
- Retire at 57 (17 years)
- Work until Mrs. Moe reaches 20 year in service (7 years)
- Semi-retire (3 years)
In 17 years, both Mr. Moe and I will both have the required 30 years and meet minimum federal retirement age (57). Due to our own saving habits this would create a situation of substantial wealth for us.
- Full health benefits (this one is huge with the ACA and healthcare in flux)
- Full and immediate pensions that are adjusted for inflation (20% for Mrs. Moe and 25% for Mr. Moe)
- Social Security stipend (until social security kicks in at 62)
- At 57 we are considered full retirement age (this leaves a lot of life ahead of us – if we’re lucky) to be fully retired
- We have really healthy leave packages by American standards (5 weeks a year, 2 weeks sick time, and every other week one day off for extra hours worked for Mrs. Moe)
- We save the maximum in our retirement plans – so funding a lucrative lifestyle wouldn’t be an issue.
On paper, this is by far the smartest option. By paper. However, life is more complex than what looks right on paper. This would keep us in the DC area for the next seventeen years.
Seven years is another milestone moment in our journey. In seven years, both Mr. and Mrs. will have 20 years of service. This 20 year mark give some unique benefits (though not as many as the full retirement option:
- Pensions at 60 (not adjusted for inflation)
- We would not have to work at all in anything else for the rest of our lives, as we will continue to save the max for retirement + more as we downsize.
- We have really healthy leave packages by American standards (5 weeks a year, 2 weeks sick time, and every other week one day off for extra hours worked for Mrs. Moe).
- We wouldn’t be wealthy, but we surely wouldn’t starve.
On paper, this is the second smartest option. This would keep us in the DC area for the next seven years (it dovetails nicely to when Miss Moe graduates college).
We’re considering a gap year (much like kids take between high school and college). Then, since we won’t be able to afford a completely funded retirement, we would like to relocate back to California and start gig work.
- Pensions at 62 (not adjusted for inflation). If you don’t put in 20, you can still get a pension with the government under the current federal system with at least five years. You have to wait until 62 to be able to withdraw without penalization, and like the seven year option – it is not adjusted for inflation.
- We miss our family and Miss Moe will likely be going to Cali for college. Being on the side of the country as our entire family and Miss Moe will take an emotional toll on us.
- Getting to Cali will allow instate tuition to help offset some of the college costs.
- We will not have enough to live in Cali indefinitely after three years. However, we will have enough to travel the world and resettle back with plenty of time to find gig work by leveraging our existing network.
- We are marketable. Both of us have the right titles, experiences, educations, and certifications in our lines of work. We find our work interesting (most of the time) and would rather work part time. Therefore, while gig work may seem like a risk – we have worked hard for the ability to be marketable in the marketplace.
What to choose?
Most of our peers find even the first option too risky and plan to work until traditional security retirement age. I don’t think I have it in me to do be a cog in the machine for seventeen more years (57 is the absolute end game for me in work – not 62 or even 67), despite the arguments for it. Obviously, the absolute riskiest option is the last one, and honestly this is where I’m leaning right now. We definitely want to use some of our skills in retirement (we worked hard for those skills and pursued them for a reason), but don’t want to be tied to a desk 24/7. I don’t think it is that we want to be completely useless in retirement, we just want to choose how and where we spend our time. We want to use our skills for projects we care about, and we both want the time to pursue other things as well. Plus, relocating when our little one heads off to college (three years) is important to us. We miss our California family and lifestyle. What would happen if we failed? I think if we know about eight months before when to call it a failure we can look for positions back in the government, or work a full time job somewhere in a location of our choice (Cali). So, while this option isn’t the “smartest” one by an examination of the black and white, it’s the one that feels the best.
The one, absolutely massive variable in any of our choices is Miss Moe. If she chooses to stay in state (Virginia) we’ll probably be leaning more toward the seven year option. I am a massive hypocrite. I picked up and moved across the country when I turned 18, but we will not be across the country from her. She’ll be hard-pressed to shake her parents. So, while she’s college shopping we’ll be touring a lot of California universities!
What would you decide?
~ Mrs. Moe