Monday, October 5, 2009

Early Retirement Red Letter Day!

Today is it - my first official day as a retiree! Although I haven’t received the official confirmation letter yet, I did receive acknowledgement of my application and show as a pending retiree on the pension plan’s website. I’d like to share the process through which I chose to take my retirement at 51½ rather than waiting until 55.

The main factor in making the decision to begin drawing my retirement this early is the uncertain economic climate. It seemed prudent to get on the receiving end to avoid the possibility of being adversely affected by unforeseen changes that may have altered the rules to which I am currently subject. While waiting until 55 would have increased the monthly amount by about $200, that could have easily been negated by a change in retirement formula or other plan modifications. If nothing changed with the plan and I had waited until 55, it would take about 10 years before reaching the break even point with the amount I will draw over the next 3½ years.

Another consideration was income tax liability. From a tax standpoint, drawing my retirement now shouldn’t be too painful. As we are currently firmly within the lowest tax bracket, there won’t be much of an impact.

The final straw was our desire to save up cash for a new car. My husband and I are completely debt-free and intend to remain so but plan to drive the ALCAN Highway to Alaska in a few years and will need a vehicle capable of that type of trip. The retirement checks will be directly deposited into a separate account designated for that purpose alone.

In all things financial, I’m not much of a risk-taker so it is a relief to have this settled. I hope this explanation is of some use to those who may be struggling with the same issue. While opting to start drawing retirement early is not for everyone, I feel completely comfortable with my decision.


  1. Congratulations on your retirement!

    I guess I could say that I “retired” when my last real job moved several hundred miles away. Since then I haven’t had a real job. I’ve had part-time employment here and there, but nothing exciting or challenging.

    You and your husband sound like you did things the right way. Being debt free is a big help.

    Wow, retired at 51 and ½. You have so much more life to live, and you can live it without having to go to work. That’s a great reason to celebrate!

  2. Thanks Felicia! I actually voluntarily discontinued regular employment in 2002 after working 16+ years for the County Health Dept. My last kid grew up and left me so I took the opportunity to change focus and pursue my dreams.

    And yes, I do have a lot more life to live, hence this blog. I want to encourage others to think a little outside the box and explore their possibilities. With this blog, I feel like I'm really hitting my stride.

    Once more I’d like to give credit where credit is due and thank you again. Through your No Job for Mom blog my eyes have really been opened to the many opportunities available online. I hope my blog efforts will have even half as big of an impact.