Episode summary
Give Up a $76K Federal Pension and Retire Early: Worth It?
Your Money Your Wealth
· · 48 min · Hosts: Joe Anderson, Big Al Clopine
Summary
The episode works through four early-retirement “spitball” cases and keeps returning to the same question: how much flexibility does a strong savings rate buy, and where does the math get tight. For Shane and Ilya, the hosts conclude that walking away from a federal job at 50 looks close to doable even though Ilya would be giving up a projected $76,000 pension and subsidized health insurance until Medicare. They say the plan is borderline on a straight-line assumption, but probably workable if spending stays controlled and the couple keeps saving for the next 12 years.
For Rip and Beth, the episode says a $1.8 million business sale likely pencils out after taxes, especially if Beth is willing to step back into part-time work or keep some income coming in through consulting. The hosts stress that installment-sale timing, tax treatment, and child-care costs all matter, so the answer is not just a single number.
Leroy and Belle get a green light for a gap year, with the hosts impressed that two teachers have nearly $1 million saved in their 30s. Jake’s Coast FIRE plan is the one they treat as tightest: they like the idea of working part-time and traveling more, but think the withdrawals could be too aggressive unless he waits longer or has Social Security to help.
Key takeaways
- The hosts think Shane and Ilya are probably on track to retire at 50, but only if they accept that the plan is “close” and revisit the numbers as they get nearer to 50.
- A $1.8 million sale for Beth’s business likely works after taxes, but the hosts say installment payments and other moving parts make this more than a simple yes-or-no decision.
- Leroy and Belle’s planned gap year is endorsed as a reasonable use of flexibility, given their age, savings rate, and teacher pensions.
- Jake’s Coast FIRE setup looks “pretty tight” to the hosts because a $70,000 spending target grows into a higher withdrawal rate over the next several years.
- The episode repeatedly argues that working a little longer usually improves the odds, but quality of life can still justify early retirement when savings are strong.
Notable quotes
“I would qualify for a pension at age 50 that I project will pay $76,000 a year until I qualify for social security at 62”
“Assuming I can keep making our IRA contributions and make equivalent max 401k contributions over the next 12 years, can we still stop working at 50”
“if Beth stops working now, but we invest the payouts for the business, it will take 3 years to receive”
“The answer is no. Do your gap year, you totally deserve it”
How the episode opens
Shane and Ilya are 38 and 37. Ilya has a big federal pension and lifetime health insurance waiting for him at age 50, but he needs out of his job now. Rip and Beth are 35 and 33, and Beth can sell her business for 1.8 million dollars.
Is that enough for her to be done for good, or would she end up back at work anyway? Leroy and Belle are teachers with just shy of a million dollars saved at age 34 and 33. Is it crazy for them to take a gap year?
Finally, Jake is in his early 50s with 1.1 million dollars planning to coast fire his way out at age 58. Does the math hold up? We'll find out today on Your Money, Your Wealth podcast number 606.
Tell your friends we're making fun of finance over here on YMYW. Leave your honest ratings and reviews for us in Apple podcasts and any other app that accepts them, and help us reach more people like you. I'm executive producer Andy Last, and here are the hosts of Your Money, Your Wealth, Joe Anderson, CFP, and Big Al Clopine, CPA.
Let's go to Shane and Lal, Ella? What What Help me on, Andy. — Shane and Ilya. It's from a TV It It's from a romance novel, I guess, that actually got turned into a show called Heated Rivalry. — Oh. L L Y A.
I L Y A. — I I L Y A. And well, it looks See, that's That's the weird thing about, you know, capitalize. It looks the same as an L. — Right. — I I'm okay. — It's Ilya. It's It's Shane Hollander and Ilya Rosenov, the central characters of Heated Rivalry, a best-selling sports romance novel by Rachel Reid, and its crave television adaptation.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- early retirement
- federal pension
- pension vs work decision
- retirement planning math
- coast fire
Companies and tickers mentioned
- Pure Financial Advisors, LLC
Watch the episode
Watch “Give Up a $76K Federal Pension and Retire Early: Worth It?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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