New to the board and eager to learn

[smashfactor18]

I just found this forum and am here to introduce myself. My goal is to retire early and enjoy life from about 50 years on ! I am looking for some advice and guidance in my current plan. I just turned 30 years old and have been working at a government job for the last 7 years. With our current retirement system I am able to retire with 20 years of service a pension of 50 percent of my highest years salary. If I stay for 25 years of service I will receive a pension of 75 percent of my highest years salary. With the value of todays dollar that would equal about 75-80 thousand dollars a year pension upon my retirement. With my Def comp program I currently have contributed 28000 dollars and I have a IRA with an additional 20 thousand dollars in it.

Since I will already be pretty young when I retire I am looking to protect myself from inflation after I leave my current career. I will be 47 when I leave this profession.

I am looking for any advice on where to put my money and what moves I should take.

[ronocnikral]

welcome. i'm tres envious of that pension. 2.5%/yr plus 5%/yr years 20-25. Wowza. Plus you make about $100k/yr now?! I would say control your spending and enjoy the ride!!

[smashfactor18]

Thanks for the reply, At this stage in my career I make 80 thousand dollars. I was estimating about what my salary would be without any field promotions at the time of my retirement. I must also take into consideration my current girlfriend whom I will likely marry has never heard of the concept of saving. She does not have a pension but does contribute to her companies 401k program with matching funds.

[Bestwifeever]

Welcome to the boards. You're in an enviable financial state already--you can probably teach some of us a thing or two .

[madcityacct]

Nice work smashfactor18. I'm in close to the same situation - so I'm interested in your progress.

Is your IRA a Roth? Do you have any debt?

[Rashen]

Quote:

Originally Posted by smashfactor18 I just found this forum and am here to introduce myself. My goal is to retire early and enjoy life from about 50 years on ! I am looking for some advice and guidance in my current plan. I just turned 30 years old and have been working at a government job for the last 7 years. With our current retirement system I am able to retire with 20 years of service a pension of 50 percent of my highest years salary. If I stay for 25 years of service I will receive a pension of 75 percent of my highest years salary. With the value of todays dollar that would equal about 75-80 thousand dollars a year pension upon my retirement. With my Def comp program I currently have contributed 28000 dollars and I have a IRA with an additional 20 thousand dollars in it. Since I will already be pretty young when I retire I am looking to protect myself from inflation after I leave my current career. I will be 47 when I leave this profession. I am looking for any advice on where to put my money and what moves I should take.

Well smashfactor18 first what govt are u working for fed or state? If ur a fed u may want to relook at the retirement program ur under I just recently retired from the fed under the new FERs program and it's not that good. My advice is to continue to invest in ur 401k to the fullest. The problem u have is retiring at 50 may be difficult because of those bad things known as taxes. Well anyhow good luck.

[smashfactor18]

Rashen, I work for a state gov, due to the current bleak financial outlook our state has started to restructure the retirement benefits for new hires. My retirement is safe and the law enforcement agency I work for has always had an independent retirement fund separated from the other state workers. I plan on contributing 4000 dollars a year to my 401K Until I retire.

Mad City, right now debt wise I have my Mortgage which is 1360 a month, a car payment which is at 400 a month and my student loan which I am 2 payments away from killing :-) Once I get my car payment done I plan on driving that car around until it gives out and start getting rid of my Mortgage.

When I was in high school and college I was fortunate my parents never let me have credit cards. I got in the habit very early on paying for things with cash and to this day hardly use anything other than my debit card.

[travelover]

Quote:

Originally Posted by smashfactor18 ........... I must also take into consideration my current girlfriend whom I will likely marry has never heard of the concept of saving. She does not have a pension but does contribute to her companies 401k program with matching funds.

This is a bigger problem than you realize. If your spouse is not aligned with your goal, that can torpedo your early retirement plans either before or after she divorces you.

Homework assignment: Google "QDRO" and "prenuptial agreement"

[ronocnikral]

Quote:

Originally Posted by Bestwifeever Welcome to the boards. You're in an enviable financial state already--you can probably teach some of us a thing or two .

I was just going to ask for a j*b application and a reference.

[walkinwood]

Welcome to the board.

Given the fiscal issues facing state & local governments, I wouldn't count on my pension plan staying the same for the next 20 years. You will almost definitely keep what you have accumulated to date, but there may be cuts in future benefit calculations or even an abrupt end (freeze) to the pension plan. This HAS already happened in corporate America and right now, the sentiment is definitely in that direction for government workers too.

No one knows what the future will hold & I hope it doesn't change for you. But, it helps to look at possible changes and weigh the risks.

[Onward]

Quote:

Originally Posted by smashfactor18 my current girlfriend whom I will likely marry has never heard of the concept of saving

Better push that retirement date back a bit.

[Walt34]

Quote:

Originally Posted by smashfactor18 I must also take into consideration my current girlfriend whom I will likely marry has never heard of the concept of saving.

Take it from the voice of experience. This is a huge red flag! I ignored it, married the financial airhead, and paid dearly for my mistake. She was great to be with and otherwise very intelligent but that is (I learned) no indication of her sense of financial responsibility. Financially it set me back eight years but I was fortunately young enough to mostly recover.

I licked my wounds, learned my lesson, and I've been married 22+ years to a wonderful lady who is in some ways more financially conservative than I am, but when "crunch times" come we are so on the same page about priorities it's sometimes a little weird.

I'm retired law enforcement, the pension plan I'm under they stopped offering around 1983 or so. So far it's still fully funded but medical insurance costs are increasing. Don't count too heavily on your employer keeping the promises made now. A lot is going to happen in the next 25 years.

[chris2008]

Try to find common ground with your girlfriend. There is a lot of research that a partner with the same financial attitiude is one of the most important tools to financial stability and wealth.
If not, better keep all financial matters seperated. However, this will become very difficult if kids are in the game.

Do not trust in pension plans that could be modified till you have reached the cross over point.

[dex]

Quote:

Originally Posted by smashfactor18 Since I will already be pretty young when I retire I am looking to protect myself from inflation after I leave my current career. I will be 47 when I leave this profession.

Quote:

Originally Posted by smashfactor18 I must also take into consideration my current girlfriend whom I will likely marry has never heard of the concept of saving. She does not have a pension but does contribute to her companies 401k program with matching funds.

The current risk is not inflation but divorce. Take the advise about what others have said about you and your girlfriend being on the same page about finances. I would add, do not think you will change her. It might happen for a short period of time but it usually does not last.

Imagine 10 years from now having to split 50% of your assets with your soon to be ex wife.

[smashfactor18]

Hey guys thanks for the wealth of responses, I agree with everyones assessment on the spending habits of my girlfriend. I will give her credit for years she was working at an entry level job in the business field. She was not making good money but has her own 401K plan. She just got promoted and has actively started paying down her credit card debt. She is aware of my financial situation and has said she would be willing to sign a prenup. I have expressed numerous times that I am not willing to inherit her debt at marriage and I also never want to risk losing what I worked so hard for.

I always seem to plan for the worse and that Is part of the reason I found this forum. The worse case scenario for me is the State eliminates the pension plan before I am able to retire. I would like to plan for that worst case scenario and am hoping for some advice on what other options I should be looking at. At this moment I have my deferred comp program with the State and I have my own 401k which I contribute 4 thousand dollars a year to.

About 4 years ago I also started to invest in precious metals as an inflation hedge.

Is there anything else I can be doing ? I do plan on eliminating all of my own debt except for my mortgage.

[MooreBonds]

Quote:

Originally Posted by smashfactor18 About 4 years ago I also started to invest in precious metals as an inflation hedge. Is there anything else I can be doing ? I do plan on eliminating all of my own debt except for my mortgage.

Everyone has their own way to hedge against this or that, or take advantage of different opportunities.

Personally, if I had a significant amount (more than 1%) of my portfolio in precious metals that I had started 4 years ago, I'd seriously think about liquidating it and putting it in other areas, since - at these levels - additional growth from precious metals (IMO) will not be significantly greater than an index fund or other opportunities.

Based on your first post, I can't tell if this is in addition to your retirement plan, or if this precious metals position is within your retirement plan. Either way, I'd suggest you rethink what your goals are with it, and how effective it truly might be 10 years from now (compared to a 10 year forecast with other opportunities).

[kyounge1956]

Quote:

Originally Posted by smashfactor18 (snip) my current girlfriend whom I will likely marry has never heard of the concept of saving. (snip)

Quote:

Originally Posted by smashfactor18 Hey guys thanks for the wealth of responses, I agree with everyones assessment on the spending habits of my girlfriend. I will give her credit for years she was working at an entry level job in the business field. She was not making good money but has her own 401K plan. She just got promoted and has actively started paying down her credit card debt. She is aware of my financial situation and has said she would be willing to sign a prenup. I have expressed numerous times that I am not willing to inherit her debt at marriage and I also never want to risk losing what I worked so hard for. (snip) (bold added)

Forgive me if I am reading too much into your words, but it appears to me you are planning to marry someone whom you already anticipate eventually divorcing. Why?

[obgyn65]

Welcome to the board Smashfactor18

[Walt34]

Quote:

Originally Posted by kyounge1956 Forgive me if I am reading too much into your words, but it appears to me you are planning to marry someone whom you already anticipate eventually divorcing. Why?

+1.

Go very slow going forward on this marriage, and watch carefully what she actually does vs. what she says she's going to do. People can change and often do, but more often they don't. See if she pays off the cc debt and then runs it up again.

If that happens you have the pattern and then have to decide if you can live with it.

[Danmar]

Looks like your on top of everything except maybe the girlfriend ( sorry about that). I married someone with terrible financial habits and it cost me millions. I was lucky to survive financially. Be very careful.