What would you do to better prepare yourself before announcing your retirement? I have some time left but want to be ready for that day
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Do you remember the days back in the 1980s when we all had our sights on accumulating 1 million dollars by retirement? Inflation and our standard of living has certainly kicked that amount up to about 5 million. We are very fortunate to be in an industry with great pay and benefits to allow some of us to achieve that 5 million goal.
Oxy retirement medical is an advantage plan (part C). If you get a serious illness these plans are not an “advantage “ to you financially.
Most of the post below are spot on, and congrats to the one who has 7 million in the bank. At 62 back when they retired they have done a great job. I plan on changing my lifestyle and don't have 7 million, but think I can make it. At least we got our house paid off, but we still have house expenses. Having no rent or mortgage is key. With rent you will be subject to the crazy fluctuations in rent we are seeing now, so paying off the mortgage was key for us. As well, I think we might hit a recession and the Fed said we would see 5% unemployment, so working may help me help others in my family if they lose their jobs.
During this time I am going to try and stay employed to keep up with inflation. Every single bill I have went up over the last 12 months. Taxes on the house is the biggest expense, and that went up a lot this year. I am really waiting on a buyout of Oxy or another VSP, and that will send me out the door for sure. I have too much in LTI to just walk away. The job is not that stressful and only in the office 3 days a week is a bonus, so that works out well with only communting 3 days a week. Key now is to save as much as possible and max out the 401K and build up cash. Once I retire I want to have enough cash to alst two years so I can get my full SS benefit and not a reduced one. By doing that if I pass away it will leave my wife with the highest payment from SS. I am going on 65 and my full payout is 66 and 8 mos, so if no VSP or buyout of Oxy for the COC to kick in I will at least work two more years.
Insurance for dependents is another expense to look into. Even if you go on retiree insurance it has a cost to it. Understand Medicare and the different versions of it you will need. That in itself was pretty hard to work through with all the different variables.
Good luck!!
Start thinking about this event five years ago. I did not think retirement was a reality til Chevron took a run at APC in 2019. Retire at 62... $200,000/yr for 35 years... Better have something like $7mm in your war chest. Then have a plan for all the free time you have that used to be used for finding grease. My first two years in retirement were difficult, this year is better. Have a strong financial and personal plan together before you leave. Good luck!
Retire in Portugal, Ecuador. Not here
I am going to do the same after the bonus, and next round of LTI vest. That way I will have income for the first year, and not have to hit the 401K and push out SS another year. Your first year on Medicare B will be higher than the normal monthly cost because it is based on the last two years of income, so you will pay a little more a month at first. Also, look at a supplemental insurance policy that covers co-pays and all. The AARP United Health Care policy is the best I can find. Plus, I know those who have it and most of their bills are covered and no co-pays. As well get a Medicare Plan D to cover the prescriptions. Oxy retriree insurance is a PPO if you are over 65. With that insurance you will have more out of pocket expenses, so that is why I am going with a supplemental policy. All this cost money so figure that into you budget. From what I can tell a supplemental or medi-gap policy is the best to cover you for expenses. All the above is based on you being 65.
Now the other side of the coin is push retirement as far out as possible and especially if you are getting to WFH two days a week. If Oxy goes more than two days a week WFH it might be worth working a few more years and taking PTO to get good two week breaks throughout the year.
If you are 100% going to retire work with your manager to transition your job. It is better to leave on a good note than burn bridges. You never know they might work with you to keep you and reduce your work schedule and more WFH. Good luck!!
If you are an LAPC employee with the APC or KMG pension, you’ll want to watch interest rates closely and decide if your expected bonus and LTIs if you have them will offset the loss in pension value.
Here are suggestions
- Get your network of work friends and colleagues well established.
- If you want to build or purchase another home that requires financing do it while you have W2 income. After that you can get a portfolio loan but it requires significant liquid assets to get a loan if you can even get one.
- Put together a cost tracking model to see what you are actually spending now. Then you can forecast what you will spend during retirement under different scenarios
- liquidate expensive assets like lake homes, beach properties, etc to minimize your monthly costs.
- Rethink your decision if you need to. Once you retire you will not want to work again. Unless there is a VSP that requires a quick decision you can delay retirement because without a pension there really are no financial benefits to retirement except for medical.