pension and fire calc

[ricthemic]

Hello, Great website, I am 57 have been selling HVAC systems for eight years. I have 36 years in a local union pension fund which, if I retire now, would be about 60K per year gross plus about 220K in union annuity (the sales job pays into union funds). Have another 32K in a 401K. Have our retirement house paid off and two others mortgaged (one rental, one we live in) with maybe 500K total in equity.


When doing Firecalc how do you enter your pension regarding total assets?

I apologize in advance if this is a dumb question.

 

[Nords]

Welcome to the board, Ric.

Your FIRECalc assets would be the things that you're going to sell off for spending cash during your retirement. You can add up all the assets into your retirement portfolio if you're planning to sell them all off eventually.

Another way to run FIRECalc would be to assume that your annuity will pay for a certain portion of your spending and your retirement portfolio will handle the rest. So, for example, if you're spending $30K/year and your annuity is $10K/year, your annual FIRECalc spending will be $20K. The drawback with this approach is that FIRECalc will raise your spending with inflation, but in real life your annuity will stay at $10K/year every year. In 20 years that'll barely pay your annual Starbucks latté bills.

A third (much more complicated) lump-sum cash value of your pension. This is fraught with assumptions and the numbers could vary wildly.

I'd take your annual spending, subtract your pension & annuities from that number, and assume that your portfolio has to support the remaining spending. Put that "remaining spending" number and your portfolio value into FIRECalc.

If you can figure out how much that $220K annuity will cough up each year then subtract that and your pension from your annual expenses and enter the remaining expenses into FIRECalc. Your portfolio would be the $32K plus the $500K (or however much you're willing to consider turning your real estate into cash someday).

Then go to "Advanced FIRECalc" and run the numbers all over again with your Social Security numbers...

If you have other FIRECalc questions you can post them on the "FIRECalc Support" board.

 

[ricthemic]

Thank you Nords,

I have another dumb question:

This website is fantastic, educational and entertaining. My question is how does the website make $$$? I don't see any advertisements.

Did you ever hear of the New England work ethic? Basically you work sixty hour weeks not counting the 3:30 AM regular wake up thinking about work.

I can't wait to retire and relax.

 

[Nords]

I have another dumb question:
This website is fantastic, educational and entertaining. My question is how does the website make $$$? I don't see any advertisements.

Unregistered users (guests) see the ads.

Dory's server fund also earns pennies per transaction via the Amazon.com link to Bob Clyatt's "Work Less, Live More" book. I use that link as my bookmark to Amazon for every purchase, not just for all my WLLM copies that friends borrow and never return keep disappearing.

You can also make a donation to FIRECalc which many of us regulars do annually (or after every profitable investment transaction inspired by this board).

Did you ever hear of the New England work ethic? Basically you work sixty hour weeks not counting the 3:30 AM regular wake up thinking about work.
I can't wait to retire and relax.

Gee, I thought that the time everyone had to wake up in order to start the morning commute.

But, yep, that's why we're in Hawaii. The Navy moved us from New England to the Southeast to California to finally arrive at a more laid-back lifestyle. It took a few years, though...