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View Poll Results: Portfolio or Pension ?
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$2 million portfolio
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33 |
41.77% |
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$80,000 yearly pension with COLA
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32 |
40.51% |
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Not sure
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14 |
17.72% |
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10-23-2010, 07:44 PM
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#21
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Recycles dryer sheets
Join Date: Oct 2010
Location: In a van down by the river
Posts: 407
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The vast majority of us won't have either choice so what's the point?
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10-23-2010, 07:47 PM
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#22
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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I love the comments that any poll or simple question bring out.
Well, it all depends on the meaning of is...
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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10-23-2010, 08:07 PM
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#23
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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To me it is a no brainer - I chose the government option - for the peace of mind standpoint.
Let's assume you retire at 55 and estimate you will live 30 years to 85 - no health care, no social security, and you don't care about leaving any money at death.
Yes, I might be able to manage the $2M over that 30 years to match the government plan. But, I would probably have to spend much of the principle over that time to keep up with the gov't pension and I would have to assume risk.
Think of it this way with the gov't pension -
No risk of default
No market risk - stocks/bond
No bad investment risk (my stupidity)
No aging risk (meaning as I age I might not be able to manage the $)
No potential increase in taxes risk on capital gains, dividends, other stock/bond etc.
No inflation risk
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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10-23-2010, 08:18 PM
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#24
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Recycles dryer sheets
Join Date: Oct 2010
Location: In a van down by the river
Posts: 407
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Does no healthcare mean no Medicare? If so then is anyone over 60 insurable?
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10-23-2010, 08:18 PM
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#25
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 2,171
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 Quote:
Originally Posted by keegs
The vast majority of us won't have either choice so what's the point?
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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?
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10-23-2010, 08:20 PM
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#26
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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Quote:
Originally Posted by keegs
Does no healthcare mean no Medicare? If so then is anyone over 60 insurable?
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No health care does not include medicare . It means you are not getting health insurance as a perk .
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10-23-2010, 08:25 PM
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#27
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Full time employment: Posting here.
Join Date: Jul 2007
Posts: 500
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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.
__________________
Worked the plan and now living the Dream!
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10-23-2010, 08:56 PM
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#28
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,012
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Quote:
Originally Posted by 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.
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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?
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10-23-2010, 10:03 PM
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#29
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,708
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Portfolio. Not even close.
__________________
learn, work, save, invest, fire
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10-24-2010, 12:09 AM
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#30
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 2,171
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Quote:
Originally Posted by CyclingInvestor
Portfolio. Not even close.
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Why the portfolio? I'm just curious.
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10-24-2010, 12:17 AM
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#31
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by Moemg
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 .
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Quote:
Originally Posted by NW-Bound
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.
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Quote:
Originally Posted by kyounge1956
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?
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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...
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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10-24-2010, 06:20 AM
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#32
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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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.
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10-24-2010, 07:32 AM
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#33
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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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.
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10-24-2010, 07:40 AM
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#34
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Location: Pittsburgh, PA suburbs
Posts: 1,796
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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!
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10-24-2010, 07:56 AM
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#35
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Full time employment: Posting here.
Join Date: May 2010
Posts: 996
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Quote:
Originally Posted by dex
To me it is a no brainer - I chose the government option - for the peace of mind standpoint.
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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.
__________________
Wherever you go, there you are.
(In other words, no whining!)
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10-24-2010, 08:01 AM
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#36
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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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...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-24-2010, 08:04 AM
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#37
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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Quote:
Originally Posted by BTravlin
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.
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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.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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10-24-2010, 08:06 AM
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#38
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2003
Posts: 5,105
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Quote:
Originally Posted by Midpack
There are advantages, disadvantages and risks with either
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Is there anything in life that you can think of that the above does not apply?
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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10-24-2010, 08:08 AM
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#39
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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Quote:
Originally Posted by dex
Is there anything in life that you can think of that the above does not apply?
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That's why the full sentence quote was "There are advantages, disadvantages and risks with either - like life in general..."
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-24-2010, 08:13 AM
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#40
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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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 .
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