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Old 05-01-2011, 10:34 AM   #21
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...

For you, to answer that question you need to ask this one: What are your current yearly expenses?
No, not the right question. The right question (touched on in some recent posts) is : "What will your expenses be in retirement?". They may, or may not be similar. There are many things that could cause them to be very different.




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Que the state pension thread battle.
Not again! Why don't you go over there and beat up on CEOs instead?
Ummmm, maybe because the OP is not a CEO

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Old 05-01-2011, 10:54 AM   #22
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Yes the key questions that needs to be answered are: "What are you spending now, why has more savings not been possible, what will change upon retirement?"
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Old 05-01-2011, 11:22 AM   #23
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2) Divorce Mitigation: Don't know if you are married but if so be very nice to your spouse
I know a retired couple where the guy would love to be gone, but he has a very good government pension and she has much less. He won't leave because 1/2 of the pension is not really enough for his preferred lifestyle, and she won't leave for the same reason.

The worst part is that his mother lived to be 101!

Ha
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Old 05-01-2011, 12:49 PM   #24
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Welcome.

Local gubmit, 50 years old...

You in law enforcement or a firefighter?

Is the local pension solidly funded or are they underfunded?

If your medical is not locked in at a guaranteed rate, you should expect the cost to rise. Local governments (many) are experiencing shortfalls. Even if it looks good now... medical costs will continue to rise.
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Old 05-01-2011, 01:06 PM   #25
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Yes, I can live on $100,000 with 2% cola. Can you? I don't have a clue! It is like asking, 'I have a three foot piece of string, is it long enough?'

My point is, without your present and predicted future expenses, you may be OK or in big trouble.
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Old 05-01-2011, 02:00 PM   #26
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Welcome.

Local gubmit, 50 years old...

You in law enforcement or a firefighter?

Is the local pension solidly funded or are they underfunded?

If your medical is not locked in at a guaranteed rate, you should expect the cost to rise. Local governments (many) are experiencing shortfalls. Even if it looks good now... medical costs will continue to rise.
Yep, you are right.
Actually in very rough figures I make about $130k a year. I can retire up to 90% depending on how long I stay. I am figuring in getting out a bit early, thinking 100k is enough to live on.

I do have a bit more than indicated in mutual funds (about 100k), deferred comp (185k), etc.

I guess what I was thinking, if the worse case scenario. Kinda low ball everything, and if it still looks good, than I am in good shape.

My municipality is trying to go after pensions but there is not much they can do to already retirees. They are drastically going after new hires-- raising retirement contributions, raising the time when you can retire. What they can do to me is raise the amount I contribute to health care, so that is a concern.

I live in Ca and do pay taxes, lots and lots of taxes.

As for the Recession. I meant that I would not want to go through another period where my mutual funds drop so much in value. I do not want that in retirement-- so I would seek safer investments.

You are right-- it comes down to expenses. Actually, my lifestyle is pretty modest. I haven't yet sat down and listed my expenses (I should) but there is nothing extravagant there.

This is a great board. Your comments have been fabulous. Lots of food for thought. I am glad I found this place.
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Old 05-01-2011, 02:50 PM   #27
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Good grief. Sounds like he'd rather moan about his situation, than solve it.

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I know a retired couple where the guy would love to be gone, but he has a very good government pension and she has much less. He won't leave because 1/2 of the pension is not really enough for his preferred lifestyle, and she won't leave for the same reason.

The worst part is that his mother lived to be 101!

Ha
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Old 05-01-2011, 04:17 PM   #28
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I know a retired couple where the guy would love to be gone, but he has a very good government pension and she has much less. He won't leave because 1/2 of the pension is not really enough for his preferred lifestyle, and she won't leave for the same reason.

The worst part is that his mother lived to be 101!

Ha
Would be worse if it was her mother. (Al least from your friend's point of view)
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Old 05-02-2011, 12:32 AM   #29
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Actually in very rough figures I make about $130k a year.
I am figuring in getting out a bit early, thinking 100k is enough to live on.

I guess what I was thinking, if the worse case scenario. Kinda low ball everything, and if it still looks good, than I am in good shape.

I live in Ca and do pay taxes, lots and lots of taxes.

You are right-- it comes down to expenses. Actually, my lifestyle is pretty modest. I haven't yet sat down and listed my expenses (I should) but there is nothing extravagant there.
Senin, you need to develop a retirement budget and then run it, with your assets & pension, through FIRECalc.

Then you need to have a "Plan B" for when your pension payer realizes that they have to start giving you 25% of your pension in IOUs for a few years. For most of us that plan is Social Security, but you seem to have no safety net at all.

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I would like to know how a person gets a $100,000 COLA'd pension from the Gov. I did 20 years and only get about $15,000 before taxes and no increases for two years. I must have missed something when I signed up.
Simple-- move to California, and have total faith that they'll come through on their pension promises!

Worked just fine for lots of airline pilots and their companies, right?
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Old 05-02-2011, 02:25 AM   #30
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As others wrote before: All depends on your expenses.
I would recommend to track expenses in great detail and in writing.
Then figure in what you would like to spend extra in retirement (think of travelling, hobbies) and what cost would go away or be reduced significantly.
Then run your numbers through some calculators like FIRECalc.

Your total saving amount of today might indicate that you have not established the habit of regular saving but spend most of what comes in. Then your savings might be not enough to last for the rest of your lifetime.
Then it might be better to change some of your financial habits of today.
You might also benefit from doing the steps explained in "Your money, your life" by Vicky Robin/ Dominguez. Some of it is explained on
http://www.financialintegrity.org/in...The_Nine_Steps
and
Simple Living Forums hosted by New Road Map Foundation
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Old 05-02-2011, 05:13 AM   #31
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... What they can do to me is raise the amount I contribute to health care, so that is a concern.
...

The cost should be manageable... at least you have it.

You should probably plan on high premium increases to be safe. Here is some information from 2000 to 2010. 114% increase. While it could wind up either better or worse... you need to use something to plan with. If you dig around, you might find some other statistics that you might use to better understand your worst case and best case planning assumptions.

Health Reform & Rate Review
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Old 05-02-2011, 12:58 PM   #32
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I am feeling pretty good about the first day out the door. I just worry about the next 35 years, even with the 2% cola.
If your expenses will consume all/most of the pre-tax $100k, I'd be concerned. My own opinion is that inflation will go well beyond the 2% level going forward and you'll experience a slow erosion of your buying power. After a couple of decades, you might find yourself cutting back out of necessity. OTOH, you won't run out of money and will have options as to how you cut back.

Can you put together a livable budget that includes some significant early savings to be used to offset future inflation?
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Old 05-02-2011, 02:36 PM   #33
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Originally Posted by haha View Post
I know a retired couple where the guy would love to be gone, but he has a very good government pension and she has much less. He won't leave because 1/2 of the pension is not really enough for his preferred lifestyle, and she won't leave for the same reason.

The worst part is that his mother lived to be 101!

Ha
Actually, when I left my 1st wife, all my friends said to have an affair because you give up half! I said that I needed to be true to myself even if it meant financial hardship.

Meanwhile it is now 16 years later and we are living the life we choose, and they are still in their life sentences!
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Old 05-02-2011, 04:24 PM   #34
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If your expenses will consume all/most of the pre-tax $100k, I'd be concerned. My own opinion is that inflation will go well beyond the 2% level going forward and you'll experience a slow erosion of your buying power. After a couple of decades, you might find yourself cutting back out of necessity. OTOH, you won't run out of money and will have options as to how you cut back.

Can you put together a livable budget that includes some significant early savings to be used to offset future inflation?
Very interesting.

What would be some good investments to make after I retire. I imagine for at least a while I will have plenty of spare cash to invest. Mutual funds/bonds/cd's ?
I want to be conservative.
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Old 05-02-2011, 04:45 PM   #35
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I live on after taxes 25,000 with health insurance paid. By the way I still work. I think it has to do with part of the world you live in. I live a pretty good life . Oldtrig
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Old 05-02-2011, 07:20 PM   #36
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Very interesting.

What would be some good investments to make after I retire. I imagine for at least a while I will have plenty of spare cash to invest. Mutual funds/bonds/cd's ?
I want to be conservative.
I agree with nun's previous comment:
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As you have a guaranteed income source you could be quite aggressive in your investing.
So, I think you should not be conservative, in spite of your impulse. My idea of an easy to do fairly aggressive portfolio is a small cap mutual common stock fund, though other more knowledgeable investors here will surely differ. I, also, have more than enough pension income for my expenses, and I am expecting to put 10k or so per year in TRP New Horizons fund, during the first part of my retirement.
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Old 05-02-2011, 09:38 PM   #37
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Many people retire on far less and do just fine. It really depends on the lifestyle and expenses that you will have.
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Old 05-03-2011, 09:18 AM   #38
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Actually, when I left my 1st wife, all my friends said to have an affair because you give up half! I said that I needed to be true to myself even if it meant financial hardship.

Meanwhile it is now 16 years later and we are living the life we choose, and they are still in their life sentences!
Yes. Agree . My story is similar. Been gone almost 20 happy years. Was very expensive to get out of it though. Divorce (at least in Canada) can be a financial nightmare.
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Old 05-03-2011, 12:31 PM   #39
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Yes. Agree . My story is similar. Been gone almost 20 happy years. Was very expensive to get out of it though. Divorce (at least in Canada) can be a financial nightmare.
1)At least 2 ways to look at this data. Both you and Keith are very happy now, so you are batting an excellent .500.

2)This ain't baseball.

Ha
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Old 05-03-2011, 12:35 PM   #40
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1)At least 2 ways to look at this data. Both you and Keith are very happy now, so you are batting an excellent .500.

2)This ain't baseball.

Ha
Definately not baseball. No one has ever said marriage or divorce was boring.
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