Doesn't the answer to that kind of question all depend on how long you're going to live? I personally can't imagine retiring at age 55 if I liked my job (or even if it was just okay and I wasn't miserable) and could increase my pension by that amount by working to age 59 - still young to retire in my opinion. But I may be biased as I don't really envision myself retiring - switching to a less demanding, less stressful job maybe - but not retiring completely.

I'm with gibby - how old is hubbie and how long is he going to live? If it was me, and I was younger when considering this, and especially if I didn't have hobbies (does he have any?), I'd keep working. What are your plans for your retirement years? If they aren't clear, then why retire?

from the OP: "DH is elgible to retire at 55 in 2009 "
Doesn't that make him 52 or 53 now?

And how the heck is she to know how long he is going to live?

$1700 X 12= $20,400
$20,4000 X 4 years = $81,600

$81,600 divided by $1300 (the difference if he waited until full retirement) = 62.76

So it would take nearly 63 years to gain back what he would have earned had he taken it 'early'.

Will insurance or the cost of it be an issue? Do you think you will have the right proportion of after retirement income to live as you would like to in your retirement years?

What I have seen of many who retire early, is that once they hit social security age, their 'pension' is reduced by the amount they start receiving from SS, thus their income never really goes up. I would think you would need an appropriate amount of additional retirement savings that you can invest and watch 'grow' as it will be needed when your income does not grow to meet inflation.

It was a bit scary when I retired, but with the help of a good financial planner, I felt confident in that I would be secure and went ahead and retired at 48 with 30 years of service.

I have never regretted it as I have a life filled with loved ones, and enjoy everyday being a 'vacation' day, filled with whatever I choose to do, (or not do) that day.

Sue

Chemocurl says:

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$1700 X 12= $20,400
$20,400 X 4 years = $81,600
$81,600 divided by $1300 (the difference if he waited until full retirement) = 62.76

So it would take nearly 63 years to gain back what he would have earned had he taken it 'early'.
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These numbers don't seem right to me. That $1300 difference is $1300 per month, not per year. So it would take 63 months, not 63 years, to catch up, or somewhat more than five years.

Now, in practice, that's not true, because you could have been investing the money rather than just putting it in your mattress. Still, my back-of-envelope computations suggest that even if the money were invested at 10%, it would take only a dozen years or so to catch up after retiring later.

LOL...I must not have had enough coffee yet when I computed that.

Thanks for the correction...what I posted didn't seem right when I did it.

Sue

Financially he would be better off working the full 30 years b/c he would get a full salary for the 5 years and then the higher pension afterwards.

I get the breakeven at 6.5 years. Does the pension have COLAs, are you setting it up with survivor benefits? But the main question is what do you need to live? Seems to me that 20K per year would be tough to live on compared to 36K. But if you have other money to live on then it is a quality of life issue.

I'll make my pitch again for pretirement.

20-25 years getting ready for prime work years
25-35 years prime full time work
20-25 years pretirement
after that, around age 75-80, go ahead and do nothing....

So for hubby, it depends on how he wants to treat that third stage. No work and no income for decades? Really? That could get old. And cause major financial stress down the road if inflation and investments and expenses don't act as you planned. He (and you) should be seriously considering what you want the next couple decades to be like. A transition into pretirement (=some other kind of part time, enjoyable work or business) will make all the difference. And drive when and how to exit the current job.

Dream. Do.

I myself am 51 years old (almost 52) and can retire from a state institution in 3 years with 25 years of service. But it seems like a no-brainer to me that I should work at least 5 more years past that -- probably 7 years, which would put me at age 62 and able to start drawing SS. And my retirement income will be so much more after 30 (or 32) years of service than after 25 years of service.

Unless there are some other circumstances you haven't told us -- does he hate the job? is he sick? just tired of working?

What about the salary the poster earns during the additional 4 years of working before retiring? Clearly the salary is more then pension,so in essence he is WAY ahead by postponing retirement

And what about health care and other benefits?

$1700 X 12= $20,400
$20,400 X 4 years = $81,600
$81,600 divided by $1300 (the difference if he waited until full retirement) = 62.76

You aren't taking into account that he is would be earning full salary for those four additional years. If we assume his early retirement pension is 50% of his salary, that would be $40,800 x4 years or $163,200. Compare that with the $81,600. So, from a purely financial standpoint, working and taking the higher pension would make more sense.

However, there are intangibles, like maybe he's just sick of working and wants to enjoy life.

What I would do is to take that early retirement and immediately take another comparable job. That could put you WAY ahead.

That's a big increase in pension for only 4 more years of work.

Assuming he doesn't have a poor family health history, I'd probably keep working. 59 is still considered 'early retirement.' OTOH, if his father/uncles/brothers tend to drop dead of heart attacks at 57, then by all means he shd retire, and make sure he gets to enjoy it for a few years (and work on heart health while he's at it).