Originally Posted by redmcclain
Well I've been reading the posts on this site for several months and finally decided to delurk and join in the fun
I plan to retire at 55 - presently that's the earliest I can receive health care through my retirement as well as a COLA pension. In addition to contributing 10% of my salary to the retirement program I'm contributing 10% to a 403B. I also have a small IRA that I rolled over after leaving the private sector.
I'm fairly certain I'll be able to retire in 2023 (health care is the main concern in the event the retirement system removes that benefit) but DH may have to work several years beyond that unless we have some fantastic returns on our investments or he stays at his current place of employment and leaves with a pension. He's aware of this possibility and doesn't seem too concerned - yet. In all seriousness he doesn't appear to experience any difficulty going to work during the summer while I remain snoozing so this may never become an issue.
I'm curious for those of you with COLA pensions in your futures how aggressive/conservative are you with your current investments. My perspective (which may be in error) has been that since most of my retirement income is guaranteed (as long as I stay put) then I can assume more risk with my 403b/IRA which are 100% equities - growth funds, foreign markets and some BRK.B.
While I don't have the luxury of a COLAed pension, I would definitely agree with your overall view that, since you have a COLAed pension, you can be much riskier with your equity allocation....however, you'd have to do some comparisons first:
1) What is your anticipated retirement budget (without health insurance)? How much would health insurance add if it were cut from DH's coverage?
2) Are you eligible for SS as a teacher? What portion would your pensions and SS make up of your total budget needs?
3) 100% equities can be aggressive enough - but are you being 'conservatively aggressive' (a la Wellesley), 'moderately aggressive' (a la Wellington), or 'strap down, we're shootin' for the moon' with 90% foreign/emerging markets?
For instance, if your dividend yields from your equities could almost pay the difference between your budget and COLAed pensions/SS, then there's nothing to worry about. However, the more you have to withdraw from your equities, the more you'd want to lean a little more conservative when it gets closer to FIREing off.