Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Money now/little later- where to invest?
Old 11-18-2012, 05:43 AM   #1
Dryer sheet aficionado
 
Join Date: Apr 2011
Posts: 44
Money now/little later- where to invest?

I am 52, and I plan on retiring next year on a pension of $100,000. Yes I am in Fire/police.

My wife (51) was supposed to have a good pension too. But, she took several years off when our child was born. That interupted her years of service. Now her pension will suck big time! However, she makes a big salary currently (over $200,000).

Basically, she is making a big salary now, but will have a very small retirement. Is there a strategy/investment for this?

Money now, little later.
__________________

__________________
Senin is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-18-2012, 08:36 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2011
Posts: 1,207
It's predominantly a question of your expenses, lifestyle, and current lifestyle. Without knowing more details, my question to you would be how long does your wife plan to work, how much excess $$$ you have now etc.
For what it's worth, my RE is this March (YAY!) and my wife will continue to work, by her choice. In the last year, we have made a concerted push to increase our already-significant savings rate to help fund my initial retirement years --- something you may also want to consider.
__________________

__________________
mystang52 is offline   Reply With Quote
Old 11-18-2012, 09:09 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,407
Quote:
Originally Posted by Senin View Post
.....Basically, she is making a big salary now, but will have a very small retirement. Is there a strategy/investment for this?
Is this question for real? To be candid, there are many couples that live very well in retirement on less than $100k, so you are all set. Congratulations.

Yes, there is a strategy for that- creating her own pension assets by saving as much as possible in a 401k, 403b or other tax-deferred retirement savings accounts (and taxable accounts) and then withdrawing from those accounts in retirement.

Also, if she works at the same employer as where she was going to get the good pension, it may be possible to buy pension credits for the years that she took off.
__________________
pb4uski is offline   Reply With Quote
Old 11-18-2012, 09:14 AM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Retire on $100 k a year?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-18-2012, 06:20 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,318
Quote:
Originally Posted by Nords View Post
You might as well also read the sad stories in this book:

Getting by on $100, 000 a Year (and Other Sad Tales): Andrew tobias: 9780671255183: Amazon.com: Books
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 11-18-2012, 06:36 PM   #6
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by Chuckanut View Post
You might as well also read the sad stories in this book:
Take another look at the author of that thread. OP put it up 18 months ago, and I think it's a useful check on progress to date.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-18-2012, 08:10 PM   #7
gone traveling
 
Join Date: Mar 2007
Posts: 559
Quote:
Originally Posted by Senin View Post
I am 52, and I plan on retiring next year on a pension of $100,000. Yes I am in Fire/police.

My wife (51) was supposed to have a good pension too. But, she took several years off when our child was born. That interupted her years of service. Now her pension will suck big time! However, she makes a big salary currently (over $200,000).

Basically, she is making a big salary now, but will have a very small retirement. Is there a strategy/investment for this?

Money now, little later.

state pension plans a gazillion dollars in debt. heres why


LOL
__________________
gerrym51 is offline   Reply With Quote
Old 11-18-2012, 08:44 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,753
Quote:
Originally Posted by gerrym51 View Post
state pension plans a gazillion dollars in debt. heres why


LOL
Which Canadian 'state' to you refer to?
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 11-18-2012, 08:48 PM   #9
gone traveling
 
Join Date: Mar 2007
Posts: 559
Quote:
Originally Posted by kumquat View Post
Which Canadian 'state' to you refer to?

since i did not know it was canada i stand corrected. I guess canada is smarter than USA
__________________
gerrym51 is offline   Reply With Quote
Old 11-18-2012, 09:01 PM   #10
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Yes there are strategies. It depends on what you want from the money.

I have alot of savings and alot of investments. But neither I or my spouse have a pension. As a result I took about 20% of my money and bought a pension of $109K. It goes up to $133K if I need help at home and to $156K if I'm in a nursing home. However I will never see the principal again as I bought four of the highest lifetime income annuities I could find.
__________________
Sun456 is offline   Reply With Quote
Old 11-18-2012, 09:04 PM   #11
gone traveling
 
Join Date: Mar 2007
Posts: 559
Quote:
Originally Posted by Sun456 View Post
Yes there are strategies. It depends on what you want from the money.

I have alot of savings and alot of investments. But neither I or my spouse have a pension. As a result I took about 20% of my money and bought a pension of $109K. It goes up to $133K if I need help at home and to $156K if I'm in a nursing home. However I will never see the principal again as I bought four of the highest lifetime income annuities I could find.

cool. how did you go about it and how do you buy a pension. is it an annuity?
__________________
gerrym51 is offline   Reply With Quote
Old 11-18-2012, 09:15 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Save a lot, spend less now and later. How many years of service did you wife lose to trash the pension that bad? No chance of working a few extra years to recover? Did it depend on continuous service?
__________________
Animorph is offline   Reply With Quote
Old 11-18-2012, 09:19 PM   #13
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Quote:
Originally Posted by gerrym51 View Post
cool. how did you go about it and how do you buy a pension. is it an annuity?
Yes. I bought 4 annuities. In my situation they made sense. No kids, no pension, and plenty of assets.
__________________
Sun456 is offline   Reply With Quote
Old 11-18-2012, 11:01 PM   #14
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
Same here. I started to buy some annuities this year.
Quote:
Originally Posted by Sun456 View Post
In my situation they made sense. No kids, no pension, and plenty of assets.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 11-19-2012, 01:18 PM   #15
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,802
The strategy for preparing for your wife's smaller pension, with her big salary now, is to save/invest a LARGE percentage of her big salary while she's still working.

This will do two things.
1) increase your nest egg for when she does retire.
2) get you both used to living below your means.

No matter how you slice it - if you only have 100k or so in savings, despite $230k in income you're not good savers.
__________________
rodi is offline   Reply With Quote
Old 11-19-2012, 02:06 PM   #16
gone traveling
 
Join Date: Mar 2007
Posts: 559
Quote:
Originally Posted by rodi View Post
The strategy for preparing for your wife's smaller pension, with her big salary now, is to save/invest a LARGE percentage of her big salary while she's still working.

This will do two things.
1) increase your nest egg for when she does retire.
2) get you both used to living below your means.

No matter how you slice it - if you only have 100k or so in savings, despite $230k in income you're not good savers.

senin says he has 100,000 PENSION. he'gets that every year.
__________________
gerrym51 is offline   Reply With Quote
Old 11-19-2012, 03:04 PM   #17
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,802
Quote:
Originally Posted by gerrym51 View Post
senin says he has 100,000 PENSION. he'gets that every year.


Got it. I based the $100k savings on his other post, 18 months ago - that Nords linked above.
Quote:
Originally Posted by Nords View Post
Either way - he's earning $130k now (based on his other post) and is wife is earning $200k now (based on this post). So they're used to $230k income.

So getting $100k pension might not cover their current spending.
__________________
rodi is offline   Reply With Quote
Old 11-23-2012, 05:32 AM   #18
Thinks s/he gets paid by the post
Marita40's Avatar
 
Join Date: May 2011
Location: St. Paul
Posts: 1,116
sun and obygn, may I ask what kind of annuities--SPIAs?--you bought and how far you are from retirement? I am still mulling this one over.
__________________
Marita40 is offline   Reply With Quote
Old 11-23-2012, 05:47 AM   #19
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
Deferred annuity in my case. I am 47, and no heir.
Quote:
Originally Posted by Marita40
sun and obygn, may I ask what kind of annuities--SPIAs?--you bought and how far you are from retirement? I am still mulling this one over.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 11-23-2012, 11:36 AM   #20
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Quote:
Originally Posted by Marita40 View Post
sun and obygn, may I ask what kind of annuities--SPIAs?--you bought and how far you are from retirement? I am still mulling this one over.
I'm 45. I bought deferred annuities (3 indexed and 1 variable). I don't plan to start taking money until I'm 65 but I have the option to start earlier.

If you do decide on annuities it is a large project to learn about them. It took me about a year to get comfortable with pulling the trigger. There is alot of reading involved as you must read and understand all the materials.

No one sales person has access to all the plans so you have to contact quite a few. Almost all the sales people are marginal at best and many have no problem lying to you so you have to be on your toes and look after your own best interests.

One tip I read which was very helpful is that the annuity firms define their own terms so when one company uses a term you have to look up the definition in their paperwork as it may not mean the same thing as when another company uses the same term.

I found it very helpful to keep a spreadsheet documenting the points that were important to me, both pro and con so that I could compare them.
__________________

__________________
Sun456 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 04:27 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.