Pension or Portfolio ?

[Moemg]

Does no healthcare mean no Medicare? If so then is anyone over 60 insurable?

No health care does not include medicare . It means you are not getting health insurance as a perk .

 

[fisherman]

Since I am now 46 and ESRd at 43 I would take the $2mil. Our plan was always to build enough to quite early and a pension at 55 was not early enough. I'll just say the $2mil and our portfolio are similar numbers now. We also have Pensions awaiting us at 55 reduced or 62 Full and that combination is what we needed to pull the trigger. A hopefully sufficient portfolio and pensions is the combination we were blessed enough to end up with and it is what we worked towards.

 

[jdw_fire]

Since I am now 46 and ESRd at 43 I would take the $2mil. Our plan was always to build enough to quite early and a pension at 55 was not early enough. I'll just say the $2mil and our portfolio are similar numbers now. We also have Pensions awaiting us at 55 reduced or 62 Full and that combination is what we needed to pull the trigger. A hopefully sufficient portfolio and pensions is the combination we were blessed enough to end up with and it is what we worked towards.

i thought the question was: Right now, what ever your age, which would you rather have a 2 million dollar portfolio or an $80,000 pension that is paying right now, with cost of living adjustments but no health care ?

did i misunderstand?

 

[CyclingInvestor]

Portfolio. Not even close.

 

[kyounge1956]

Portfolio. Not even close.

Why the portfolio? I'm just curious.

 

[Nords]

Another great point . I guess it has to be 100% survival to make it a reasonable choice . The reason I was wondering about this is because I have a pension and assets but during the melt down it was the security of the pension that let me sleep at night .

Voted not sure.
It's too bad there is no 3rd choice: half and half, meaning $1M in the pocket and $40K/yr COLA'ed.
I am sure someone here has that half-n-half combination.

Maybe you won't have to choose between such a large pension and portfolio, but whatever amount of savings you can realistically think about accumulating, you will have a choice between keeping it as an investment portfolio, using the money to buy an annuity for lifetime income, or some combination of the two. Which looks best to you?

In my younger years I would've taken the portfolio and immediately set out to beat Warren Buffett's record.

Now that I'm [-]wiser[/-] older I'd take the portfolio and annuitize a portion of it.

Pretty much what's happening now...

 

[chinaco]

I chose the pension because my goal leans more toward the reliable/protected income need than "Pot-o-Money".

But I actually prefer a hybrid approach!

I intend to have my cake and eat it too!

Using SS, pension (no cola), and the nest egg...

Build a reliable base income stream and keep some of nest egg.

Why? Base income covered and flexibility to spend the excess money when I choose.

 

[Animorph]

Portfolio. They both work about the same during retirement but the pension has no value at the end. The portfolio would most likely be worth more than $2M in today's dollars when you are done with it. I'm happy with the risk, which is really not much with a diversified portfolio and the ability to reduce spending if necessary. Also, the pension has no flexibility for major expenses (new car, new roof, medical bills...) unless they occur later in retirement after you've been saving up.

 

[WhoDaresWins]

I am given to impetuous decision making, and this morning I would choose the $2 million dollars in the hand and immediately book several trips with that R. Crusoe travel mentioned in another post!

 

[BTravlin]

To me it is a no brainer - I chose the government option - for the peace of mind standpoint.

To me it was a no brainer too and I chose the cash. I don't trust the federal government to follow through on their promises and they are the ones who determine the COLA rate and therefore it is subject to manipulation. I'll take the cash and the control thanks.

 

[Midpack]

I don't have a pension of any kind, but still a tough call so I voted not sure. There are advantages, disadvantages and risks with either - like life in general...

 

[dex]

To me it was a no brainer too and I chose the cash. I don't trust the federal government to follow through on their promises and they are the ones who determine the COLA rate and therefore it is subject to manipulation. I'll take the cash and the control thanks.

From the standpoint of control,I think the Government's control - tax, regulation - and public's willingness to demonize business is a greater threat to investors than pensioners.

The pensioners are people (and can vote) and are given automatic 'victim' status. While businesses (stocks/bonds) are automatically given 'evil' status so tax, regulate them.

 

[dex]

There are advantages, disadvantages and risks with either

Is there anything in life that you can think of that the above does not apply?

 

[Midpack]

Is there anything in life that you can think of that the above does not apply?

That's why the full sentence quote was "There are advantages, disadvantages and risks with either - like life in general..."

 

[Moemg]

A point I had not considered but if you take the 2 million and get divorced or sued you lose a lot of it but with the pension your money is safer .

 

[BTravlin]

The pensioners are people (and can vote) and are given automatic 'victim' status. While businesses (stocks/bonds) are automatically given 'evil' status so tax, regulate them.

Just because I'm not a pensioner I can no longer vote? Should have made that part of the question.

 

[Purron]

Portfolio. They both work about the same during retirement but the pension has no value at the end. The portfolio would most likely be worth more than $2M in today's dollars when you are done with it. I'm happy with the risk, which is really not much with a diversified portfolio and the ability to reduce spending if necessary. Also, the pension has no flexibility for major expenses (new car, new roof, medical bills...) unless they occur later in retirement after you've been saving up.

I selected portfolio for the same reasons Animorph did, particularly the flexibility.

 

[Rustic23]

I vote with Nords. It seems the best solution. You get the annuity/security, and you have the cash to grow or blow. So taking the cash appears to be the answer that wants it split.

 

[keegs]

From the standpoint of control,I think the Government's control - tax, regulation - and public's willingness to demonize business is a greater threat to investors than pensioners.

The pensioners are people (and can vote) and are given automatic 'victim' status. While businesses (stocks/bonds) are automatically given 'evil' status so tax, regulate them.

Public pensions are under enormous political and economic pressure in large measure because wall street blew up the public pension funds along with the global econmy for reasons that can only be characterized as greed and ignorance.

The governor of new jersey recently characterized our public school teachers as drug dealers.

The notion that public pensioners have been characterized as victims is absurd.

 

[BTravlin]

The notion that public pensioners have been characterized as victims is absurd.

Yes, lately they're more likely to be described as blood sucking leeches.

 

[samclem]

A point I had not considered but if you take the 2 million and get divorced or sued you lose a lot of it but with the pension your money is safer .

Maybe not. If it's a military pension and you were married for at least 10 years of your service time, spouse automatically gets a pro-rated amount (starting at 50%). Doesn't matter why the divorce occurred, etc. It's the law--thank you Congressman Schroeder.

 

[harley]

Taking into account a number of the comments regarding gov't stability and control, divorce or legal issues, and others, I'd still take the cash. If things here become toocontrolling or business unfriendly (which I don't believe will happen due to the golden rule - he who has the gold makes the rules), I can pick up my cash (by then invested in easily transportable gold and gemstones) and head for Costa Rica or some other safer haven. If the gov't controls my pension they can always reel me back in.

 

[keegs]

Taking into account a number of the comments regarding gov't stability and control, divorce or legal issues, and others, I'd still take the cash. If things here become toocontrolling or business unfriendly (which I don't believe will happen due to the golden rule - he who has the gold makes the rules), I can pick up my cash (by then invested in easily transportable gold and gemstones) and head for Costa Rica or some other safer haven. If the gov't controls my pension they can always reel me back in.

That depends Harley. The guys will the gold didn't do too well after 1929.

If you consider greed as a guide, given the parallels with the distribution of income then and now, I wouldn't be too quick to rule out history repeating itself.

 

[harley]

That depends Harley. The guys will the gold didn't do too well after 1929.

If you consider greed as a guide, given the parallels with the distribution of income then and now, I wouldn't be too quick to rule out history repeating itself.

They did a hell of a lot better than the guys without the gold. The stories of all the rich guys jumping out of windows after the Crash are greatly exaggerated. I have to stick with the cash.

 

[keegs]

They did a hell of a lot better than the guys without the gold. The stories of all the rich guys jumping out of windows after the Crash are greatly exaggerated. I have to stick with the cash.

Well if you consider income distribution over the period, their share dropped substantially.

What always gets lost in the popular supply side argument is that with a shrinking middle class you don't create requisite demand.

Those with the gold should know this and also that a smaller piece of a growing pie is better than a larger piece of a shrinking pie.