How is it "early" if you can't get your money?

[rescueme]

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Originally Posted by travelover I'm so grateful for that ignore function. It is time.

...

But he be so funny in his statements ...

And yes, that's my opinion.

[Joshua]

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Originally Posted by friar1610 And still others choose occupations which, while not paying extraordinarily high salaries, offer reasonably good lifetime pensions after 20 - 25 years. I refer to occupations such as law enforcement, fire fighting, the military, etc.

*raises hand*

Yep, that's kind of what I'm looking at. I figure that the Army may not offer the highest paid retirement out there, but it does provide a pension I won't have to wait until 60 for, and being a veteran will mean I don't have to worry about where my health care is coming from.

In theory, I could settle down with only my pension check and still be able to get by, but there's nothing that says I can't pack away a solid chunk of self-growing change to pad out my income when it's time to hang up the boots. Based on how low a person's expenses are while on active service, I could potentially save a lot of money even though I don't necessarily make a whole lot compared to other folks in other lines of work.

Also, the feasibility of early retirement is heavily dependent on what you consider necessary for the "good life." When someone says you need 60k a year income as a bare minimum to retire with and enjoy yourself, well, that's based on one set of standards. I used to live on much less than half of that, and I didn't think it was too unusual. When you're raised in a poor rural area on a few hundred dollars a week, anything that pays you money on a regular basis but doesn't require you to show up to work sounds like pure magic.

It reminds me of a conversation from the Dilbert comic:
Boss: "I can't afford to fire you, so I'm going to reduce your working conditions until you're forced to quit."
Wally: "Ha! I'd like to see you try. My standards are lower than you can possibly imagine!"

Josh

[dex]

401k Withdrawal

No penalty

"You stop working and begin taking out regular payments based on a schedule that will make equal payments for the rest of your expected life; these must last for 5 years or until you turn 59 1/2, whichever is longer "

[kyounge1956]

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Originally Posted by HsiaoChu (snip) And, its hard to pull this off in a normal working life of 40 years unless you lucked out into one of the few remaining DB ponzi pension schemes(all DB pension schemes are some kind of ponzi scheme, IMO) and add SS. Just my opinion.

Here's another definition you appear to have missed.
Pension: a fixed sum paid regularly to a person: a (archaic): wage b : a gratuity granted (as by a government) as a favor or reward c : one paid under given conditions to a person following retirement from service or to surviving dependents. (italics added)

Ponzi scheme: an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.

The fact that some pension funds have been mismanaged doesn't make all DB pensions a swindle.

[ronocnikral]

to answer the op, it's what everyone has said so far. taxable accounts and 72t. oh, and i have a ponzi pension. and while i don't save $60k/year, i do save about $50k. that's my plan.

i had a roommate who volunteered at a homeless shelter. one day, he was doing his volunteer work and a homeless guy came in and said, "you're young. let me give you some advice, you need to invest in commodities! that's the only way you'll ever make it!"

[Alan]

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Originally Posted by travelover prin·ci·pal Finance. a capital sum, as distinguished from interest or profit. prin·ci·ple an adopted rule or method for application in action: a working principle for general use

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Originally Posted by HsiaoChu Picky picky picky. Is there any intelligent human being on this forum who didn't know what I was talking about? I think not.

HC, during your long career in education did you never correct your students? Since you are posting lots of financial advice travelover was just checking that you understood the difference between principle and principal.

Be nice, be happy

[friar1610]

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Originally Posted by HsiaoChu These DB ponzi schemes are coming to an end soon. Sure I lucked out on one in education(though I could not retire until I had at least 30 years in and was at least 59.5 year of age), but that not ER. Those in the military need to be officers to get the really decent money at the end of 20 years. And the same exists for the others. There are really only limited positions for advancement to the serious money for a quick 20 years out and ER. Very very few don't take some other job. Yeah, it can be done, but the sacrifice in doing it has to be recognized. 99+% of Americans either cannot make that sacrifice either due to not enough income or not willing to constrict their lives in that way. Money is not everything, but it almost has to be to make these numbers early.

I acknowledged in my post that most people work in a second career for a while. Although not all do; I know a number who didn't.

One scenario: Join the military at 18 out of high school. Stay in 20 years, retiring as an E-7. Age 38. Work for 10 - 12 years in a second career and save. Retire for good at about 50.

Another scenario: Join the military at 22 out of college. Stay in for 24 - 26 years, retiring as an O-5 or O-6. Work 10 years. Retire for good at 56 - 58.

I suppose it's subjective whether those are "early" retirements but I was simply pointing out another route to the goal. Worked for me.

[ziggy29]

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Originally Posted by friar1610 I acknowledged in my post that most people work in a second career for a while. Although not all do; I know a number who didn't. One scenario: Join the military at 18 out of high school. Stay in 20 years, retiring as an E-7. Age 38. Work for 10 - 12 years in a second career and save. Retire for good at about 50. Another scenario: Join the military at 22 out of college. Stay in for 24 - 26 years, retiring as an O-5 or O-6. Work 10 years. Retire for good at 56 - 58.

Though not an early retirement per se, when I worked for an aerospace/defense company we had a LOT of "triple dippers." It was actually very common. These folks joined the military probably out of high school, put in their 20 and then went to work for the defense contractor. After another 15-20 years there, they would retire (now collecting two pensions and having health insurance taken care of) and re-up as contractors making a much higher hourly rate (since they don't really need the bennies at this point).

[Alan]

Quote:

Originally Posted by friar1610 I acknowledged in my post that most people work in a second career for a while. Although not all do; I know a number who didn't. One scenario: Join the military at 18 out of high school. Stay in 20 years, retiring as an E-7. Age 38. Work for 10 - 12 years in a second career and save. Retire for good at about 50. Another scenario: Join the military at 22 out of college. Stay in for 24 - 26 years, retiring as an O-5 or O-6. Work 10 years. Retire for good at 56 - 58. I suppose it's subjective whether those are "early" retirements but I was simply pointing out another route to the goal. Worked for me.

A good friend of ours did just that and at 58 he retired with a teacher's pension plus his military pension. His wife retired at the same time with her private pension so they are doing very well even though they were never earning 'big bucks'.

I don't see private pensions as ponzi schemes since these days they are pretty well regulated and have reasonable protection in the mandatory insurance protection scheme run by the government (PBGC).

[ziggy29]

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Originally Posted by Alan I don't see private pensions as ponzi schemes since these days they are pretty well regulated and have reasonable protection in the mandatory insurance protection scheme run by the government (PBGC).

Ponzi scheme or not, I'd much rather have one than not...

[Alan]

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Originally Posted by ziggy29 Ponzi scheme or not, I'd much rather have one than not...

I've got 4 of the b*ggars so I certainly hope they don't implode, otherwise I'll be saying "Do you want fries with that?" during my senior years.

[rescueme]

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Originally Posted by Alan I've got 4 of the b*ggars so I certainly hope they don't implode, otherwise I'll be saying "Do you want fries with that?" during my senior years.

Just let us know what window and Micky D's you're located at, and we'll stop off and say hi ...

[dex]

A pension does add some peace of mind. I worked 20 years for a GE company and will get 12K/yr at 60 - probably no increases over the years. That plus SS at 62 will provide me with close to 100% of my estimated budget at 62. That percentage falls to 60% in 23 yrs.

[Alan]

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Originally Posted by rescueme Just let us know what window and Micky D's you're located at, and we'll stop off and say hi ...

That's what I love about this community - lots of folk willing to give their support

[REWahoo]

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Originally Posted by Alan That's what I love about this community - lots of folk willing to give their support

Hey, we expect you to slip us some extra fries!

[ziggy29]

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Originally Posted by Alan That's what I love about this community - lots of folk willing to give their support

Just pay me back by supersizing it for me, okay?

[Alan]

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Originally Posted by dex A pension does add some peace of mind. I worked 20 years for a GE company and will get 12K/yr at 60 - probably no increases over the years. That plus SS at 62 will provide me with close to 100% of my estimated budget at 62. That percentage falls to 60% in 23 yrs.

3 of my pensions are not COLA'ed and I'm taking them now, topping up from regular savings, so (going back to the OP) I won't have need of the tax deferred savings before they can be withdrawn without penalty.

[Alan]

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Originally Posted by REWahoo Hey, we expect you to slip us some extra fries!

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Originally Posted by ziggy29 Just pay me back by supersizing it for me, okay?

You can count on it !!

[ziggy29]

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Originally Posted by dex A pension does add some peace of mind. I worked 20 years for a GE company and will get 12K/yr at 60 - probably no increases over the years.

Yeah, my frozen pension will be about $8000 a year -- not adjusted for inflation -- if I take it at 65. By 2030 I figure that will buy a Happy Meal once a month when I go past Alan's drive through.

[walkinwood]

... and others choose to live a very frugal life while earning a reasonable salary.
... and others have ER'd with kids

There are many ways to achieve ER, but they all take commitment and patient execution.