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Old 05-07-2013, 10:48 AM   #21
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A $37K pension is roughly equivalent to a $1 million cash pile
This is a big reason I don't discuss this stuff with friends and family, many of whom have COLA'd pensions. We're saying the same thing but in different languages.

To the OP, good luck and enjoy your ER! I'm an OMYer right now, half hoping for someone to tap me on my shoulder and tell me to leave.
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Old 05-07-2013, 12:24 PM   #22
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However, I might not want to have 80% of my investment in equities if I was in retirement. I'm still working and I can't justify more than 60%. There is too much risk of a correction and you don't want to find yourself down $60-$70K if we have a 20% correction in the markets.

Congratulations on your new retirement! I can't wait to experience it some day!

On the bond side would it be safe to invest in just one bond index - Spartan U.S. Bond Index Fund. Or should I be more diversified?
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Old 05-09-2013, 09:21 AM   #23
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I wonder if there is a calculator to compare a non cola vs cola pension...ie tell you the amount of your non cola pension you can spend and how much to invest?
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Old 05-09-2013, 09:59 AM   #24
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I wonder if there is a calculator to compare a non cola vs cola pension...ie tell you the amount of your non cola pension you can spend and how much to invest?
Based on both generating streams of cash flow (with an arbitrary end point at hypothetical date of death) it should be possible to use any business calculator or spreadsheet to calculate the NPV (net present value) of each, or the FV (future value) for that matter. The difference would be equivalent to the amount of money that someone with a non-COLA pension should invest to ensure equivalent future cash flows.

Ah, pensions! I wish I had one!
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Old 05-09-2013, 06:35 PM   #25
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Until I eventually "got" the idea that a guaranteed income stream had intrinsic value, I never appreciated the true value of a DB plan or even SS or lifetime disability grant.

The fact that DW and I have a guaranteed string of at least six income streams makes life very easy for us and allows us to invest a greater portion of our assets in equities than if we did not have such a floor. It is a real shame that pensions are fading away.
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Old 05-09-2013, 08:37 PM   #26
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A $37K pension is quite significant, considering your expenses are only between $41-$48K. Social security will give you a bit of cushion so that you don't have to rely too much on the $400K savings. However, I might not want to have 80% of my investment in equities if I was in retirement. I'm still working and I can't justify more than 60%. There is too much risk of a correction and you don't want to find yourself down $60-$70K if we have a 20% correction in the markets.
I agree completely. You're in pretty good shape because of the $37 pension (and SS coming), but since the pension is non-COLA'd and you will hopefully have many years of retirement life to finance, you're going to want to be very careful with that $400,000 you have invested. I think 50-60% in equities should be plenty, and even then, I'd watch things carefully and be prepared to adjust as necessary if market conditions change. You can always reduce expenses a little bit for a year or two if you need to at some point.....what you don't want to do is lose a significant chunk of that $400 grand if we have another 2008.
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