Should I Retire at 49 with $8,000 Monthly Pension and $1.2 Million Net Worth?

A Reddit user is considering retiring at 49. He has a net worth of $1.2 million, a portion of which is tied up in his home.  While this ordinarily would not be enough money to retire on, the poster also served in the military and then worked as a government contractor, so he has an $8,000 pension coming to him. 

So, given that he said his pension provides enough to cover his costs, should he go ahead and retire?

Can you retire with a big pension?

The Reddit poster is in a unique position here because he has a guaranteed pension from the government that will last for life. Unlike most people who need to save for their own retirement — and who need to worry about maintaining a safe withdrawal rate to make their money last for life — this poster doesn’t have to worry about his income going away once he retires.

Because of the fact he has a secure pension, and he said his pension more than covers his expenses, he can pretty much retire without worries, as long as he confirms his pension can transfer to his spouse if he has one (which is typically an option with a military pension). Plus, unlike most people, he said he will keep his inexpensive insurance through the military after retirement, which means that he doesn’t even need to worry about his healthcare premiums going up once he loses access to employer-sponsored coverage. 

Since his $8,000 monthly pension can pay for everything that he needs, he also won’t even need to touch his savings. He can leave his money invested and allow it to keep growing and provide him a backup cushion for a rainy day. 

Unless he has some reason to suspect that he will have to significantly increase his monthly spending, he can retire with no money worries. 

Being ready for retirement is about more than just money

While the poster is in a financial position to retire, other Redditors urged him to think about the non-financial aspects of quitting work.

One commenter, for example, advised considering the emotional implications of no longer having a job to provide purpose and a sense of fulfillment. Others warned that it will be important for the OP to find something to do with his time, while a third commenter said to think about the lifestyle changes that will come with quitting his job, including no longer having the social connections that working can provide. 

These are serious issues, as many people who retire end up feeling depressed, lonely, or isolated– and the OP may very well be at risk of this happening to him, especially as he has served his country, and he obviously had an important job to do for the majority of his career. Suddenly finding himself without that identity and that structure would be a major change, and he must make sure he is ready for that.  

If the OP has some ideas of how he wants to spend his time, though, then there’s nothing holding him back– and many other Redditors acknowledged that and said they personally would retire today if they were in his shoes.

He should, however, talk with a financial advisor first, as many posters also suggested. The advisor can help him confirm that nothing is missing from his planning process and can work with him to ensure he is using his money as wisely as possible to fully enjoy the financial security that his large pension can provide to him.

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