I have prepared for an exit from my job, potentially in about 1 week.
Part one: The classic "pension or lump-sum" question.
I'm in my early 60's, with a choice between a pension and a lump-sum:
- The pension would be about $9,300 per month, with up to a 2% COLA per year, and a (non-guaranteed) contribution towards health care.
- The lump sum would be for about $1,600,000, with no other benefits provided.
My current invested assets are in the mid seven-figures range, with about a 50-50 split between stock and bonds+cash (I am quite cash-heavy at the moment, as I may buy a more expensive house in retirement). So the pension would be a nice contribution to my retirement, but it would not be the dominant one.
I heard an interesting point in an earlier post: that if your pre-retirement assets are relatively dominant over your pension/lump-sum, then in some ways perhaps the lump sum may be the better choice after all, i.e. there's more flexibility, you / your heirs receive all assets should your retirement be cut short, and there's no risk of the pension failing (though certainly a remaining risk of mismanagement, etc.).
Furthermore, one of the usual arguments in favor of a pension - reduced "longevity risk" - isn't as important in that the other, more substantial, assets would presumably be sufficient to carry you through to the end anyway.
I still lean towards the pension. What are your thoughts?
Part two: The classic "should I go vs. one more year" question.
I'm not very worried about money, but like so many here have expressed, I'm still conflicted about the idea of retirement. This last year of work (in near complete isolation at home), and indeed the last several years, have not felt satisfying or productive. I'm clearly somewhat burned out. But taking the plunge now feels a little precipitous given the strain of the last year in particular. I half think I should stick with it for the classic "one more year" just to see if the burn-out lifts as normality returns. But if I had to wager about that, I'd guess not.
As well, continuing to work vs. retiring means that I'm working for less than minimum wage. The take-home difference between my pension and my paycheck would be about $300 per month. That's crazy! And all I've been doing with my paycheck is throwing it into retirement accounts anyway, as I live well beneath my means.
There's also a great collaborative project that I've been aiming at for a decade which has always seemed to be one year away from reality. It's likely to stay one year away for another 5-10 years, but I'd feel quite disappointed if it did finally come through the moment I stepped out the door. But again, if I had to wager, that would likely not happen.
Finally, there's the old advice about retiring "to" something instead of "from" something. Frankly, I don't have much in mind for the "to" part yet. I think I'd need a year or more to find or construct a bit of a newer self. But my career is one in which, classically, few retire from voluntarily, and doing so means substantially closing off a source of engagement with the world that was once extremely important to me. (I do not believe I would be looking for other work post-retirement.)
Your thoughts?
Thank you very much!