I retired at 55. I started May 1st, I maxed my 401K for that year, and ended up with an AGI that gave me great medical rates under the affordable care act. I have to say I really like retirement - I was a bit concerned about getting bored as I used worked a lot. Ive been retired over 7 years now and it is just incredible. The only surprise was that I saved up quite a bit on money for retirement and it's hard for me to spend it now as I still have a "Save for retirement mindset". My investments are growing much faster than my spending depletes them. Maybe I'm just cheap......anyhow, save, retire, and enjoy. It really is a special time in life.
Retiring in the fall if you live in a northern state is also good because then you don't have to think about going to work in the snow. It's also right around that holiday period so it's more festive. Honestly, being able to retire at all is great.
I turn 63 in November. I'm retiring November 1st, November 6th we fly to Barcelona for a Mediterranean cruise. I live in Ontario 🇨🇦 and I have a 1 hour commute to work through hilly farm country so I chose to retire BEFORE the snow hits. Yay! I have a lot of hobbies that I can do indoors until March when I start my seeds indoors for my garden prep. Always something to do l. ❤
i retired at 60 and started drawing my SSI at 62. if i waited until 70 max allowance waiting 8 years i would have left 58 k on the table. I would say if SSI is not a priority or necessary, take the $ and run!! tomorrow is not guaranteed.
I turn 65 in March, plan on retiring in June. I have to give my employer 4 week notice to collect 5 thousand dollar bonus. With my social security and two union pensions I hope to live comfortably.
Always retire or quit work near the first of the month. If you work on the 1st day of the month your employer health insurance is covered for the whole month
Oh also if you have a flexible spending account. you can spend the whole years worth in January and retire/quit work in March as I did. Thus I only paid for 2 1/2 months of FSA contributions, but I was able to use the full year's worth of FSA, I treated my self to braces right before I retired and paid for most of it with the FSA. the same true in the other direction If your contribute more to the FSA before you quit. you don't get the extra back the employer keeps it. Yes I know a 60 year old getting braces. Hey it ended up being very cheap and I have a new look in retirement (No more big gap like david letterman)
My company pays me for whatever vacation I have leftover when I retire. So I decided to wait till the start of the year to retire. I get 4 weeks of vacation and can carry another week over, so a "retirement" check of 5 weeks' pay will be a nice sign off!
Retire in autumn as the first few months will be the honeymoon, then when maybe your over that it will be spring and then you can enjoy the weather improving and summer.
I had a check list on when to ideally retire. 1. Get my employer 401k yearly contribution in February. 2. Get my semiannual bonus check on April 1st. 3. Last working day was May 18th, my 56th birthday and my 37th anniversary at the company. 4. Use the last of my PTO to get me to June 30th. 5. Officially retired and my ACA health plan started on July 1st. 6. Retired coming out of winter, going into summer. 7. Working just beginning of the year allowed me to earn up to the maximum MAGI to get the optimum premium credits for my ACA Bronze HDHP+HSA plan. Your channel and others really helped me learn quite a bit about optimizing retirement planning.
ha! Your plan is almost identical to mine. 1st Roll - my 401k pre/post tax into IRA/Roth 11JAN25. I still have until may to max everything out. IRA/ROTH/401k. Retire 5May25 - 2st Roll - into my IRA's of 401k pre/post tax to close it out. My Medical is covered, but still need to get a dental plan. Same on the bouous checks and such, 1APR25. I'm actually wanting to use my PTO up before then. A year+ of cash. So, will not even touch an investment until sometime in 2026. I'll take SS at 62 in 2027.
Well, I'm screwed. I'm retiring this fall/early winter. But I'm not going to stay on until spring. I'm using the cold, dark days to go room by room de-cluttering my home. There are a lot of variables to consider. These are good points to consider but I just wasn't ready this spring and I don't want to wait until next spring. I have plenty to do this winter to get my house ready for sale!
I think you’ll find that not being tied down at a job means you’ll be able to get outside more during the day, which is a plus in winter where I know I used to go to work in the dark and drive home in the dark.
love the idea of 'out with the old' as a marker before 'in with the new' on this. May purposefully schedule some time to de-crap the house in the very first phase of retirement as we switch modes of life.
Your video just randomly showed up and I am glad it did, you have some great information. I just turned 59 but I'm thinking of retiring at 62. I can do it financially but just the idea makes me scratch my head! I will review some more of your videos. Thanks!
I turn 67 in July in two years at my FR age. I plan to wait till the next January as I understand I will get The 8% bonus in SS since I made it to my 68th year. I will take vacation the entire month of January. And after watching this video will max out my 401k and/or my Roth IRA contribution (since it has to be earned).
This is great stuff. My plan is April 1st. Why? One is the company bonus. You just have to check in after the first of the year but it is paid out in February. Two is that it gives my employer 3 months notice from the start of the year. Three is that it is the best time of year to be outside, where I am from. And now I have a fourth reason (thank you) so that I can max out my contribution for the year and reduce taxable income. Thanks for so many great videos and advice!
If you have a severance package coming to you, retire early in the year. Avoid having to claim all/most of your salary plus severance in the same tax year.
Dave, thank you. watched several in a row tonight. I believe you provide a unique perspective and advice and connect mental/emotional and financial components of retirement decision making. For me these are very helpful.
On my fire dept, we all retire in May, that’s when your mustering out check maxs out if you structured your furlough and cycle time correctly . Mine was 22k
Another thing if on a pension read your plan documents. If you work at least half of the year it counts as another full year. Also if at least 6 mos away from age 65 you can contribute to HSA to lower your income if you have a Qualified High Deductible Medical Plan. Also some companies will true up the 401k matching if you paid enough in during the year. So you may want to wait and get that. If you are retiring early may want to limit income so you pay lower Premiums for Obama care. Also if you leave at the beginning of the month some companies continue insurance through the end of the month. May want to do that overseas trip then while you still have company insurance.😊
All pensions are different. Mine does it monthly. I know my wife will be eligible on 3/1/2028. Working longer would simply add that many months to her time.
I was an October retiree. I spent quite a lot of time in the cold intentionally. I got quite a few ski days in last winter. I think of how many winters do I left to enjoy......
Thanks for another good video. I have a counter point to present…what if your job is so stressful and draining that no amount of extra tax benefit is worth it?
Always take care of you. Know when to walk away, know when to run. My husband had to walk away from an extremely toxic, high stress, draining job despite earning high six figures. It was that bad. Co-workers in their 40’s were having heart attacks and strokes. Sometimes the juice is not worth the squeeze
Retiring early, in Sept (Dallas, TX) the super hot summers keep me indoors and the fall, winter and spring are my active months. Also waited as my employer pays out bonus and vests stock option In August.
Outstanding video. I did a retirement practice run between jobs this summer. Your point about retiring before the summer starts is pure gold. Excellent suggestions.
I retired this year end of August at 57 years old. I've been creating new habits of walking daily, meet ups with friends and am taking weekly yoga classes. I think that my timing was great because with the holidays coming up I can enjoy family and friends and travel without the stress of work and using vacation time.
For MD state workers, the two optimal times are Jan 1st and July 1st. My date is Jan 1st, 2026 so I can max out my unused leave payout (600 hours). They also allow you to defer up to 85% of your payout to your supplemental accounts (401, 457b, or 403b). The July 1st date is popular for those who want to minimize the wait for their pension COLA. The COLAs go into effect every July 1st and you must be retired at least 1 year to get the first COLA.
RSU vesting schedule is a good retirement date driver if you forfeit remaining unvested RSU’s. Also was able to max out the Mega Backdoor Roth with after tax contributions to the 401k and in plan conversions in the final year. Another big tax saver for us was to contribute highly-appreciated stock to a Donor Advised Fund to get a big deduction while our tax rate was high, effectively pre funding our charitable contributions to the point where we can start QCD’s.
A topic few has discussed👍🏼 Please research on the best date to retire for federal employees. There are many out there! They have more to consider in order to choose the best date to retire.
My employer gives bonuses in April. My birthday is in May. I also live in Illinois. My plan for a May 31 retirement date makes sense. I did consider the bonus and not wanting to retire in the winter when picking the date. May 31, 2028.
My hire date was july 3rd. So I cannot retire until that date. My plan right now though is to finish out the year and retire in January because my Birthday is Dec 2 so if I retire in January both my pension and SS will both start in January.
Dave, love your videos, fellow Illinoisan, posting to help boost the algorithm for you. I do have a question and possibly a future short video idea for Streamline: If we have an existing financial advisor we work with, but want a second opinion 'sanity check' what's the most polite, least jarring way to do that? Also is there a checklist of things I should ask/know before going for this second opinion?
Thanks for this info, we haven't heard anyone mention this before. I watched this with my husband, and when you mentioned you were excited about tax harvesting because you are a nerd, my husband said you are the guy who he wants to hire!
I missed it or you didn’t mention it. I retired after 32 years at the same place. Two years after full benefits on July the first. I took social security benefits Jan first that same year because you can still work and collect SS benefits up to there maximum for your retirement year. I worked six months collecting SS and my normal pay at work and dumped me sick day pay into deferred compensation.
Good tips. I think a lot of people don’t think about these things. I live in California so I’ve never considered time of year as a climate factor. I do agree that the first part of the year is better. The first year I retired in the month of May for the tax and heath insurance planning strategies you mentioned.
Perfect topic. I'm 3 years in retirement in march @57, did a good job in the accumulation phase with net worth of $3M+. The problem is I haven't spent any of it despite knowing I have no concerns of running out of money. Some minimalist traits that helped me save are not easily cast aside. I sense I'll be dead and gone with plenty of money left behind, but that was never a goal.
You’re young enough to start spending traveling more now! But I understand. I’m in a similar boat at age 56. I have spent more on things than I did when working, but not that much more. Old habits die hard.
One thing i would like to add to several comments to the ones who plan on retiring is to do a 4- or 6-month Retirment practice run. Increase you Roth 401k contribution to the maximum you can, but don't max out your limit to soon so you lose the company matching before you retire. With less money coming in (paycheck) you can see if you can live on these funds and if a withdraw from your retire fund will be needed. On Dave comment about continuing to contribute to your 401k so you can do a bigger Roth conversion later, why, it just seems like you are still converting and paying the tax bill that same year so why not do it with the paycheck (Roth 401k), of course if your employer offer a Roth accounts.
Good stuff! I retired at the end of December 2023 (55 and 51 now.) That gave me the full annual portion of our bonus and I was able to cash out a good chunk of PTO. I got a modified COBRA plan as part of my package. I get to stay on the company plan, at employee rates, for 12 months via COBRA. Starting next year we'll move over to an ACA plan. Staying through December gave us a nice round year to roll into the next medical plan and we'll manage our MAGI income level (Small side-hustle, Interest, Dividends and ROTH conversions) to maximize ACA subsidies going forward. We're in Georgia, so I can't claim the same level of winter experience you northerners get (🤣) so weather wasn't too much of a factor in our decision...mostly bonus and medical expense driven. How has the process of moving onto an ACA plan been for folks? Any tips to offer? Any fellow Georgians already take the plunge?
I would suggest people take the topics discussed as relevant points to think about for their situation. But frankly, the proposed dates may or may not be relevant to your situation at all. As just one example. I will be more than ready to retire by 55, but will wait until the year I turn 55 in order to access the 401k at my current job. As such, one or two days worked in Jan and I'm good. Further, I'm very involved in highschool sports. Waiting to retire until spring just means missing out on more involvement of another season. So have a think about the topics, and how they fit into your situation. But don't put too much value in the suggested dates given, because only you know your situation.
9:00 lol, 10 minutes after my bonus check cleared the bank is when I handed my boss my retirement letter. (To be clear, boss was great.) They ended up making me a phenomenal offer to remain part-time, which ended up happening for almost 2 years. Turned out to be a wonderful transition to full retirement. I recommend that if one can do it.
First of your videos I've watched. A lot of good points made that I haven't heard elsewhere. Thanks! P.S. I'm in Illinois also, and just retired in July for the very reason you mentioned. I didn't want to begin my retired life at the start of winter in the midwest.
Hello, I am due for retirement in two years, I'm a senior citizen but I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $50K per year but nothing to show for it yet.
One other point not mentioned in the video - if you make over the Social Security cap, retiring after you’ve reached the cap means you avoid a 6% tax on leave payout. This may or may not be offset by your marginal tax rate comparing to an early year retirement
12 Calendar Days until State Civil Service Retirement with a 70% Pension at just over age 62... Coordinated Social Security will be delayed until Age 65 [at the earliest}. I delayed my Retirement Date Six Months to fully capture a 3.5% COLA in my Pension. September, I'll finish cleaning out my Apartment. In October: I'm headed to the Philippines for at least Six Months more or less lining up with the Dry Season. If I decide to Return to the US: I could take a Federal Civil Service job.
Good info! I work for a company that gives out annual bonuses in March, but to qualify for the NEXT year's bonus, employees need to work for at least half the year (into July). As such, I'm planning on retiring in August so I can get a pro-rated bonus the following March.
Retire in december at 63, went on aca healthcare insurance in january. Managed my income to be really low so healthcare cost virtually nothing until medicare. Think about it.
Thanks for the advice! I had thought on when, to get my retirement money fast, end of PP. The time of year, I hadn’t considered! We never think of our mental health just on how much longer we can physically do the job.
I can't see working another cold winter would make me happier. How dreadful to force yourself through another working winter because you think it is a must. I love winter, what's not to love about it? What is there to love about going to work from dark to dark? I respectfully disagree on this point.
I loved this topic and you bring out excellent points. However, Is there anything fatally wrong with retiring the last week of the year? I get a substantial bonus if I work through 1/2 of Dec. I was hoping to max out Roth/457b contributions with that. Also, being from Illinois as well, I’m hoping to go into the new year with my first ever winter vacation as my job is always busiest Nov-April and never able to go on a vac during those months for the past 37 years. Really looking forward to a winter vac on a warm beach or cruise.
Individual situations can always vary. My pension gives me credit for a full year if I make it past June 30, so that will be a factor for my timing. Just have to do the math for your specific situation to see what works for you.
I retired Dec.7, 2012 and headed straight to Thailand and spent 4 months in So. East Asia. Been traveling about 9 months a year ever since. Except during Covid ,,,,,,,
Health insurance planning was an intricate part of our retirement also getting needed surgery before retirement ( ie hip replacement) yeah ok sounds a bit premeditated but you have earned it in most cases so take care of yourself first. Your golf game will thank you…. Maybe😊
Teachers- Retire in June, collect a pay through August, collect your pension in September, you'll get your pension from June - July- August and September in October
I’m looking at June. Profit sharing check arrives in March, max out Roth IRA for my wife and I, and I don’t want to work another summer in the heat & rain.
Something else regarding COBRA: Best not to have COBRA end in the middle of the year and have to start over with a new deductible and new out of pocket maximum mid-year
I might disagree if you want to time it to last till you turn 65. You probably can do Roth conversions the year you retire and the next year. You only generally get 18 months.
Semper Fi. 1,117 days until retirement...but who's counting. Fortunately for me, my military retirement pension, VA disability and Tricare mitigate several of the financial risks described.
Caveat: As with my company you may miss out on thing like discretionary company contributions to 401k or other benefits if you don't work until a specific date. At my company, if I'm not on payroll until September 30th, I forefit any discretionary contributions. So that is something to keep in mind too.
The financials are a little above my pay grade literally, but I like the idea of thinking about how many years you would likely to have left better to face it sooner than later, it doesn't need to be a bad thing
Great topic. You mentioned 401K's but didn't talk about IRA Contributions for the year. I'd like to max out both again in Roth accounts (over 50 limits), but it will be hard to get out by the Summer. Number 1 is I'm not a high income earner, and Number 2, the Secure Act 2.0 is increasing the contribution limits for 2025.
Excellent video! I’m a teacher, so I gave my notice the day after students’ last day in May. I could have retired May 31, but I had planned a wonderful 3-week roadtrip in June. Due to some medical issues I just didn’t feel comfortable switching to the insurance plan offered by the pension until after that trip so I retired June 30. I highly recommend traveling right as you retire and it makes a clear break from your past life to the future. Retiring June 30 allowed me to start collecting a pension July 1, while still being owed two months’ pay from my employer, so it was nice knowing I had extra money for my trip. I definitely recommend being somewhere warm when you start retirement.
I retired at 55. I started May 1st, I maxed my 401K for that year, and ended up with an AGI that gave me great medical rates under the affordable care act. I have to say I really like retirement - I was a bit concerned about getting bored as I used worked a lot. Ive been retired over 7 years now and it is just incredible. The only surprise was that I saved up quite a bit on money for retirement and it's hard for me to spend it now as I still have a "Save for retirement mindset". My investments are growing much faster than my spending depletes them. Maybe I'm just cheap......anyhow, save, retire, and enjoy. It really is a special time in life.
Retiring in the fall if you live in a northern state is also good because then you don't have to think about going to work in the snow. It's also right around that holiday period so it's more festive.
Honestly, being able to retire at all is great.
I turn 63 in November. I'm retiring November 1st, November 6th we fly to Barcelona for a Mediterranean cruise. I live in Ontario 🇨🇦 and I have a 1 hour commute to work through hilly farm country so I chose to retire BEFORE the snow hits. Yay! I have a lot of hobbies that I can do indoors until March when I start my seeds indoors for my garden prep. Always something to do l. ❤
i retired at 60 and started drawing my SSI at 62. if i waited until 70 max allowance waiting 8 years i would have left 58 k on the table. I would say if SSI is not a priority or necessary, take the $ and run!! tomorrow is not guaranteed.
I turn 65 in March, plan on retiring in June. I have to give my employer 4 week notice to collect 5 thousand dollar bonus. With my social security and two union pensions I hope to live comfortably.
Always retire or quit work near the first of the month. If you work on the 1st day of the month your employer health insurance is covered for the whole month
Oh also if you have a flexible spending account. you can spend the whole years worth in January and retire/quit work in March as I did. Thus I only paid for 2 1/2 months of FSA contributions, but I was able to use the full year's worth of FSA, I treated my self to braces right before I retired and paid for most of it with the FSA. the same true in the other direction If your contribute more to the FSA before you quit. you don't get the extra back the employer keeps it. Yes I know a 60 year old getting braces. Hey it ended up being very cheap and I have a new look in retirement (No more big gap like david letterman)
My company pays me for whatever vacation I have leftover when I retire. So I decided to wait till the start of the year to retire. I get 4 weeks of vacation and can carry another week over, so a "retirement" check of 5 weeks' pay will be a nice sign off!
Only 20 or so summers left. Yikes! That puts it all into perspective. I have to remember I am not 33 anymore.
I had not thought of maxing my 401k in my last year of employment. Great point.
Husband plans to retire in January. He can’t wait to ski midweek. No fighting traffic and crowds!
Retire in autumn as the first few months will be the honeymoon, then when maybe your over that it will be spring and then you can enjoy the weather improving and summer.
I had a check list on when to ideally retire.
1. Get my employer 401k yearly contribution in February.
2. Get my semiannual bonus check on April 1st.
3. Last working day was May 18th, my 56th birthday and my 37th anniversary at the company.
4. Use the last of my PTO to get me to June 30th.
5. Officially retired and my ACA health plan started on July 1st.
6. Retired coming out of winter, going into summer.
7. Working just beginning of the year allowed me to earn up to the maximum MAGI to get the optimum premium credits for my ACA Bronze HDHP+HSA plan.
Your channel and others really helped me learn quite a bit about optimizing retirement planning.
That’s a great list.
ha! Your plan is almost identical to mine.
1st Roll - my 401k pre/post tax into IRA/Roth 11JAN25.
I still have until may to max everything out. IRA/ROTH/401k.
Retire 5May25 - 2st Roll - into my IRA's of 401k pre/post tax to close it out.
My Medical is covered, but still need to get a dental plan.
Same on the bouous checks and such, 1APR25.
I'm actually wanting to use my PTO up before then.
A year+ of cash. So, will not even touch an investment until sometime in 2026.
I'll take SS at 62 in 2027.
If you are retired, what's the purpose of an hdhp/HSA?
Age 56 with 37 years in. You are definitely an old school employee, a dying breed! Congratulations on your well-deserved retirement! 🎈
Well, I'm screwed. I'm retiring this fall/early winter. But I'm not going to stay on until spring. I'm using the cold, dark days to go room by room de-cluttering my home. There are a lot of variables to consider. These are good points to consider but I just wasn't ready this spring and I don't want to wait until next spring. I have plenty to do this winter to get my house ready for sale!
I think you’ll find that not being tied down at a job means you’ll be able to get outside more during the day, which is a plus in winter where I know I used to go to work in the dark and drive home in the dark.
love the idea of 'out with the old' as a marker before 'in with the new' on this. May purposefully schedule some time to de-crap the house in the very first phase of retirement as we switch modes of life.
Your video just randomly showed up and I am glad it did, you have some great information. I just turned 59 but I'm thinking of retiring at 62. I can do it financially but just the idea makes me scratch my head! I will review some more of your videos. Thanks!
I want to retire in January so I have one last Christmas I can use work as an excuse to miss out on
In a similar fashion to 401k contribution, your HSA contribution can be front loaded to further reduce your income.
I turn 67 in July in two years at my FR age. I plan to wait till the next January as I understand I will get The 8% bonus in SS since I made it to my 68th year. I will take vacation the entire month of January. And after watching this video will max out my 401k and/or my Roth IRA contribution (since it has to be earned).
Good thought on the seasons. As a retired teacher, I ended in June and hit the summer running!
This is great stuff. My plan is April 1st. Why? One is the company bonus. You just have to check in after the first of the year but it is paid out in February. Two is that it gives my employer 3 months notice from the start of the year. Three is that it is the best time of year to be outside, where I am from. And now I have a fourth reason (thank you) so that I can max out my contribution for the year and reduce taxable income.
Thanks for so many great videos and advice!
If you have a severance package coming to you, retire early in the year. Avoid having to claim all/most of your salary plus severance in the same tax year.
I could retire in November then go visit my sister-in-law in New Zealand - Sumner time down under in January.
Dave, thank you. watched several in a row tonight. I believe you provide a unique perspective and advice and connect mental/emotional and financial components of retirement decision making. For me these are very helpful.
I live in Phoenix. November is a perfect time to retire. The weather is best as we go into “Winter.”
My last day was Dec 29 2023. I wanted to keep taxes simple from one tax year to the next.
I like that.
On my fire dept, we all retire in May, that’s when your mustering out check maxs out if you structured your furlough and cycle time correctly . Mine was 22k
This! Finally someone who speaks to what means the most to me. Love the suggestion of going somewhere warm right after retirement.
Thank you! I'm 51. All your expertise to optimize my retirement were super helpful. Things I have not even considered.
Another thing if on a pension read your plan documents. If you work at least half of the year it counts as another full year. Also if at least 6 mos away from age 65 you can contribute to HSA to lower your income if you have a Qualified High Deductible Medical Plan. Also some companies will true up the 401k matching if you paid enough in during the year. So you may want to wait and get that. If you are retiring early may want to limit income so you pay lower Premiums for Obama care. Also if you leave at the beginning of the month some companies continue insurance through the end of the month. May want to do that overseas trip then while you still have company insurance.😊
All pensions are different. Mine does it monthly. I know my wife will be eligible on 3/1/2028. Working longer would simply add that many months to her time.
I was an October retiree. I spent quite a lot of time in the cold intentionally. I got quite a few ski days in last winter. I think of how many winters do I left to enjoy......
Thanks for another good video. I have a counter point to present…what if your job is so stressful and draining that no amount of extra tax benefit is worth it?
Always take care of you. Know when to walk away, know when to run. My husband had to walk away from an extremely toxic, high stress, draining job despite earning high six figures. It was that bad. Co-workers in their 40’s were having heart attacks and strokes. Sometimes the juice is not worth the squeeze
I retired at the end of April while living in FL, 2023. It worked out perfectly.
I'm 38 and a long way from retirement, and I very much appreciate your insightful videos!!!
Retiring early, in Sept (Dallas, TX) the super hot summers keep me indoors and the fall, winter and spring are my active months.
Also waited as my employer pays out bonus and vests stock option In August.
Sorry, but there's no such thing as a Winter in Dallas Texas...
Outstanding video. I did a retirement practice run between jobs this summer. Your point about retiring before the summer starts is pure gold. Excellent suggestions.
Thanks for sharing!
Agree with starting off your retirement with a vacation. Book a cruise, a bike tour, a resort.
I retired this year end of August at 57 years old. I've been creating new habits of walking daily, meet ups with friends and am taking weekly yoga classes. I think that my timing was great because with the holidays coming up I can enjoy family and friends and travel without the stress of work and using vacation time.
For MD state workers, the two optimal times are Jan 1st and July 1st. My date is Jan 1st, 2026 so I can max out my unused leave payout (600 hours). They also allow you to defer up to 85% of your payout to your supplemental accounts (401, 457b, or 403b). The July 1st date is popular for those who want to minimize the wait for their pension COLA. The COLAs go into effect every July 1st and you must be retired at least 1 year to get the first COLA.
RSU vesting schedule is a good retirement date driver if you forfeit remaining unvested RSU’s. Also was able to max out the Mega Backdoor Roth with after tax contributions to the 401k and in plan conversions in the final year. Another big tax saver for us was to contribute highly-appreciated stock to a Donor Advised Fund to get a big deduction while our tax rate was high, effectively pre funding our charitable contributions to the point where we can start QCD’s.
A topic few has discussed👍🏼 Please research on the best date to retire for federal employees. There are many out there! They have more to consider in order to choose the best date to retire.
My employer gives bonuses in April. My birthday is in May. I also live in Illinois. My plan for a May 31 retirement date makes sense. I did consider the bonus and not wanting to retire in the winter when picking the date. May 31, 2028.
That makes sense.
I had not thought about the bumping 401k to max that year to minimize AGI. Great tip.
I will retire at 65, if I had more confidence in the economy I would retire now (61).
This is actually really helpful to think through.
Thank you! I’m glad it was helpful.
My hire date was july 3rd. So I cannot retire until that date.
My plan right now though is to finish out the year and retire in January because my Birthday is Dec 2 so if I retire in January both my pension and SS will both start in January.
Dave, love your videos, fellow Illinoisan, posting to help boost the algorithm for you.
I do have a question and possibly a future short video idea for Streamline: If we have an existing financial advisor we work with, but want a second opinion 'sanity check' what's the most polite, least jarring way to do that? Also is there a checklist of things I should ask/know before going for this second opinion?
Thanks for this info, we haven't heard anyone mention this before. I watched this with my husband, and when you mentioned you were excited about tax harvesting because you are a nerd, my husband said you are the guy who he wants to hire!
Great info! Live in the north and retired in April so I had the nice weather to enjoy right away!
Wonderful!
I missed it or you didn’t mention it. I retired after 32 years at the same place. Two years after full benefits on July the first. I took social security benefits Jan first that same year because you can still work and collect SS benefits up to there maximum for your retirement year. I worked six months collecting SS and my normal pay at work and dumped me sick day pay into deferred compensation.
Great information. Thank you!
Good tips. I think a lot of people don’t think about these things. I live in California so I’ve never considered time of year as a climate factor. I do agree that the first part of the year is better. The first year I retired in the month of May for the tax and heath insurance planning strategies you mentioned.
Being in a hot climate where it is regularly over 100F in the summer I’d like a fall or winter retirement.
Same here. Extremely hot May to September in Texas.
Take a vacation while you are still getting paid, then give your two weeks notice.
Perfect topic. I'm 3 years in retirement in march @57, did a good job in the accumulation phase with net worth of $3M+. The problem is I haven't spent any of it despite knowing I have no concerns of running out of money. Some minimalist traits that helped me save are not easily cast aside. I sense I'll be dead and gone with plenty of money left behind, but that was never a goal.
You’re young enough to start spending traveling more now! But I understand. I’m in a similar boat at age 56. I have spent more on things than I did when working, but not that much more. Old habits die hard.
For me it is far more important to focus on job related financial items like bonus payments and stock grants.
End of year works for the southern hemisphere. We are in New Zealand and I plan to retire at Christmas in 2 or 3 years.
One thing i would like to add to several comments to the ones who plan on retiring is to do a 4- or 6-month Retirment practice run. Increase you Roth 401k contribution to the maximum you can, but don't max out your limit to soon so you lose the company matching before you retire. With less money coming in (paycheck) you can see if you can live on these funds and if a withdraw from your retire fund will be needed. On Dave comment about continuing to contribute to your 401k so you can do a bigger Roth conversion later, why, it just seems like you are still converting and paying the tax bill that same year so why not do it with the paycheck (Roth 401k), of course if your employer offer a Roth accounts.
Good stuff! I retired at the end of December 2023 (55 and 51 now.) That gave me the full annual portion of our bonus and I was able to cash out a good chunk of PTO. I got a modified COBRA plan as part of my package. I get to stay on the company plan, at employee rates, for 12 months via COBRA. Starting next year we'll move over to an ACA plan. Staying through December gave us a nice round year to roll into the next medical plan and we'll manage our MAGI income level (Small side-hustle, Interest, Dividends and ROTH conversions) to maximize ACA subsidies going forward. We're in Georgia, so I can't claim the same level of winter experience you northerners get (🤣) so weather wasn't too much of a factor in our decision...mostly bonus and medical expense driven. How has the process of moving onto an ACA plan been for folks? Any tips to offer? Any fellow Georgians already take the plunge?
I’m retiring 2 days after my 67th birthday 2041. and putting in my papers January 2nd, 6 months before my 67th birthday
I turn 65 next May. So I plan to retire in June because my SS will start in July.
Completing a full year for Social Security calculation may benefit you if you are in your highest earning years.
I would suggest people take the topics discussed as relevant points to think about for their situation. But frankly, the proposed dates may or may not be relevant to your situation at all.
As just one example. I will be more than ready to retire by 55, but will wait until the year I turn 55 in order to access the 401k at my current job. As such, one or two days worked in Jan and I'm good. Further, I'm very involved in highschool sports. Waiting to retire until spring just means missing out on more involvement of another season.
So have a think about the topics, and how they fit into your situation. But don't put too much value in the suggested dates given, because only you know your situation.
9:00 lol, 10 minutes after my bonus check cleared the bank is when I handed my boss my retirement letter. (To be clear, boss was great.)
They ended up making me a phenomenal offer to remain part-time, which ended up happening for almost 2 years. Turned out to be a wonderful transition to full retirement. I recommend that if one can do it.
Yes, I retired in April
First of your videos I've watched. A lot of good points made that I haven't heard elsewhere. Thanks! P.S. I'm in Illinois also, and just retired in July for the very reason you mentioned. I didn't want to begin my retired life at the start of winter in the midwest.
Hello, I am due for retirement in two years, I'm a senior citizen but I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $50K per year but nothing to show for it yet.
One other point not mentioned in the video - if you make over the Social Security cap, retiring after you’ve reached the cap means you avoid a 6% tax on leave payout. This may or may not be offset by your marginal tax rate comparing to an early year retirement
12 Calendar Days until State Civil Service Retirement with a 70% Pension at just over age 62... Coordinated Social Security will be delayed until Age 65 [at the earliest}. I delayed my Retirement Date Six Months to fully capture a 3.5% COLA in my Pension. September, I'll finish cleaning out my Apartment. In October: I'm headed to the Philippines for at least Six Months more or less lining up with the Dry Season. If I decide to Return to the US: I could take a Federal Civil Service job.
Good info! I work for a company that gives out annual bonuses in March, but to qualify for the NEXT year's bonus, employees need to work for at least half the year (into July). As such, I'm planning on retiring in August so I can get a pro-rated bonus the following March.
A financial impact for me will be accelerated vesting of PTO in retirement year; six months versus 10 months.
Very good info. Do a video for all the people that are in the pension system, etc.
Going to the tropics is nice for us Northerners but check the weather first.
Hurricane season ends around November
Typhoon season ends around October
Retire in december at 63, went on aca healthcare insurance in january. Managed my income to be really low so healthcare cost virtually nothing until medicare. Think about it.
I am 66 possibly looking to retire next year, however I want to work part-time. Any advice on this?
Thanks for the advice! I had thought on when, to get my retirement money fast, end of PP. The time of year, I hadn’t considered! We never think of our mental health just on how much longer we can physically do the job.
I can't see working another cold winter would make me happier. How dreadful to force yourself through another working winter because you think it is a must. I love winter, what's not to love about it? What is there to love about going to work from dark to dark? I respectfully disagree on this point.
I loved this topic and you bring out excellent points. However, Is there anything fatally wrong with retiring the last week of the year? I get a substantial bonus if I work through 1/2 of Dec. I was hoping to max out Roth/457b contributions with that. Also, being from Illinois as well, I’m hoping to go into the new year with my first ever winter vacation as my job is always busiest Nov-April and never able to go on a vac during those months for the past 37 years. Really looking forward to a winter vac on a warm beach or cruise.
Individual situations can always vary.
My pension gives me credit for a full year if I make it past June 30, so that will be a factor for my timing.
Just have to do the math for your specific situation to see what works for you.
I had not thought about this. Thanks for the information. I am looking to retire in 2025, but not sure of the exact date yet.
Best of luck!
I retired Dec.7, 2012 and headed straight to Thailand and spent 4 months in So. East Asia. Been traveling about 9 months a year ever since. Except during Covid ,,,,,,,
❤️ thanks for the call out Dave!
Semper Fi Sir!❤️🇺🇸
Health insurance planning was an intricate part of our retirement also getting needed surgery before retirement ( ie hip replacement) yeah ok sounds a bit premeditated but you have earned it in most cases so take care of yourself first. Your golf game will thank you…. Maybe😊
This is an excellent, helpful checklist to carefully consider in setting "the date." Thank you!
Wonderful topic. Right on time for me personally. So many factors to consider. I want to make good choices. Very helpful video. Thanks
Teachers- Retire in June, collect a pay through August, collect your pension in September, you'll get your pension from June - July- August and September in October
I’m looking at June. Profit sharing check arrives in March, max out Roth IRA for my wife and I, and I don’t want to work another summer in the heat & rain.
Good plan!
Something else regarding COBRA: Best not to have COBRA end in the middle of the year and have to start over with a new deductible and new out of pocket maximum mid-year
I might disagree if you want to time it to last till you turn 65. You probably can do Roth conversions the year you retire and the next year. You only generally get 18 months.
Retiring in December. FL gal can’t wait for the cooler weather and plant the garden. Lol 🌴
Semper Fi. 1,117 days until retirement...but who's counting. Fortunately for me, my military retirement pension, VA disability and Tricare mitigate several of the financial risks described.
Very interesting Topic 👌 kind of late for me. I did retired at 62
Thanks
I asked my husband to wait until February to retire from his job so that we would have the benefit of his Flex benefits.
another item (financial) with health is when starting medicare is best Jan. to avoid double deductions with work ins and medicare
Very informative; I learned things here that I have never heard before. Thanks!
Caveat: As with my company you may miss out on thing like discretionary company contributions to 401k or other benefits if you don't work until a specific date.
At my company, if I'm not on payroll until September 30th, I forefit any discretionary contributions. So that is something to keep in mind too.
Great video, i plan to retire 2025, hopefully by May 15 before my 63 B day
Thank you for this video, it was super helpful to learn some insights I hadn’t considered before
The financials are a little above my pay grade literally, but I like the idea of thinking about how many years you would likely to have left better to face it sooner than later, it doesn't need to be a bad thing
Great topic. You mentioned 401K's but didn't talk about IRA Contributions for the year. I'd like to max out both again in Roth accounts (over 50 limits), but it will be hard to get out by the Summer. Number 1 is I'm not a high income earner, and Number 2, the Secure Act 2.0 is increasing the contribution limits for 2025.
Excellent video! I’m a teacher, so I gave my notice the day after students’ last day in May. I could have retired May 31, but I had planned a wonderful 3-week roadtrip in June. Due to some medical issues I just didn’t feel comfortable switching to the insurance plan offered by the pension until after that trip so I retired June 30. I highly recommend traveling right as you retire and it makes a clear break from your past life to the future. Retiring June 30 allowed me to start collecting a pension July 1, while still being owed two months’ pay from my employer, so it was nice knowing I had extra money for my trip. I definitely recommend being somewhere warm when you start retirement.
Awesome video....
Thank you so much
Retired October 31, 2023 so I could enjoy the holidays. No other reason why I pick that date. Very happy with my choice.
What if you're working contracts and just get sick of trying to find a new job and decide to stay unemployed and retire?
You forgot to mention things like ESPP purchase dates or 401(k) match requirements.