How much is enough?

[novaman]

I guess those with pensions could figure out how much of a nest egg that pension is worth (25x??) and come up with a FIRE number...

 

[ESRBob]

My number is 50. I just turned 50 and I have $400,000. Of coarse the $53,000 Cola pension helps.

DM,
Nothing like a 53k COLA'd pension to take the pressure off retirement finances... What sort of work did you do to earn that?

Congrats on your achievement, and just hang in there for the next 4 months and you'll be a free man...

 

[megacorp-firee]

DM,
Nothing like a 53k COLA'd pension to take the pressure off retirement finances... What sort of work did you do to earn that?

Congrats on your achievement, and just hang in there for the next 4 months and you'll be a free man...

COLA'ed? Gotta be government, military, or teacher

 

[ESRBob]

I'd guess that, too, but am always looking for any other avenues. I've gotta start giving my kid career advice, and a COLA'd pension needs to weigh into the equation somewhere. (Nords was visiting us in NY a few weeks back and gave him the full pitch on the joys of Special Operations, so I suppose that would get him a COLA'd pension, but good health insurance might also be required depending on how messy the fieldwork gets...)

 

[megacorp-firee]

I'd guess that, too, but am always looking for any other avenues. I've gotta start giving my kid career advice, and a COLA'd pension needs to weigh into the equation somewhere. (Nords was visiting us in NY a few weeks back and gave him the full pitch on the joys of Special Operations, so I suppose that would get him a COLA'd pension, but good health insurance might also be required depending on how messy the fieldwork gets...)

Other option is to steer him into something that makes gobs of money ... then you don't need no stick'en Cola'ed pensions
but I guess that would be a new thread....

 

[blade3colorado]

You're right megacorp-firee, primarily government, military, and teachers receive pensions w/cola . . . Feds are still paying CSRS pensioners, but will eliminate that cost due to all new hires being FERS since early '80s. Very grateful I went in as CSRS, since you better know what the hell you're doing investment wise if you are FERS. Sheesh, I know quite a few young Feds that have been with the government for 10 years or more that haven't begun contributing or have contributed the minimum amount. Bottom line? I think most public and private sector entities will eliminate all pensions in the next 20 years . . . Sheesh, as we all know, some haven't even honored what they initially promised to employees and/or bankrupted their company, e.g., United, Enron, etc. Sad.

 

[ESRBob]

Yeah, but he's not cut out for Wall St, and I wonder if he has the work ethic to be an entrepreneur, and even if he did, plenty of talented entrepreneurs never make much money.... The more I look back on my own experiences as an entrepreneur, the more I feel I was incredibly lucky to get the breaks that allowed us to ER. It could just as easily have gone the other way, which would have meant I would still be lugging the laptop around the country to a bunch of meetings for a bunch more years of 65-hour weeks...

 

[dm]

The wife is a school administrator and is in the public school retirement system. She has 22 years in and we were able to purchase 3 years for her to qualify for a reduced 25 and out benefit.

 

[kcowan]

...Bottom line? I think most public and private sector entities will eliminate all pensions in the next 20 years . . . Sheesh, as we all know, some haven't even honored what they initially promised to employees and/or bankrupted their company, e.g., United, Enron, etc. Sad.

Also COLA using CPI will not be as good in the future as it was before they started tinkering with it to keep it down.

Traditional inflation rates can be estimated by adding 7.0% to the CPI-U annual growth rate (3.8% +7.0% = 10.8% as of August 2006) or by adding 7.4% to the C-CPI-U rate (3.4% + 7.4% = 10.8% as of August 2006). Graphs of alternate CPI measures can be found as follows. The CPI adjusted solely for the impact of the shift to geometric weighting is shown in the graph on the home page of Shadow Government Statistics.

Complete article here:
Shadow Government Statistics: 3. Consumer Price Index (UPDATE)

 

[fluffy]

Also COLA using CPI will not be as good in the future as it was before they started tinkering with it to keep it down.
Complete article here:
Shadow Government Statistics: 3. Consumer Price Index (UPDATE)

I am not sure how seriously you can take this guy when he essentially claims historic inflation of 9-10% per year. I remember 15 years ago pretty well and things were NOT 4x cheaper in absolute dollar terms back then.

 

[Chonder]

I have flexible numbers/scenarios. If I reach 400K and chose to, then I could afford to FIRE to the old homeplace, set up housekeeping near family and travel/live modestly forever.(I'm from deep in the appalachians). Or if I feel like w*rking longer, with 800K I can live well in a less hillbilly setting. I am 38 and plan on FIREing no later than 52 years old at which time I should have >1 million. Ten years later, the DW should have another 500K+ to add to that. The goal is quality of life and happiness and these are dependent on more factors than net worth. So, for me, I guess 400K is enough, but 1 million is the target...and anytime in between I'll be FI just looking for the reason/scenario to RE. I like options!

 

[HughJass]

Funny how your “magic number” can climb as you either get close to it, or achieve it. It did for me... In my 30’s, my number (while working for megacorp) was$2M. That got in reach in my early 40’s, and I reset at $3M. Fast forward to my mid-50’s and $4.5M became the sleep-like-a-baby target. Personality plays a huge role in setting your target. Combine a super-saver tendency (same for DW) with strong goal-setting tendency, and no surprise my target escalated as I got closer to RE. Now 2-1/2 years into FIRE, I’m glad we were aggressive in setting our target... but anticipate that when our draw-down stage hits in earnest, it might be a challenge for me to shift mindset from accumulating to spending. Looking forward to that challenge!

 

[dtbach]

I put $3-4M because that's where I'm at, plus have a military pension. Should start getting SS with DW and myself in a couple of years. We like to travel, eat out and give to kids. Gives me the lifestyle I like so I worked until 58 to get there. YMMV.

 

[MarieIG]

Wow, that poll was from 2007. I wonder if the results would have changed if that poll would have been from 2019.

 

[street]

I didn't have a goal/number that I wanted to get too. I just got there by accident by saving and investing. I figured I would work forever and that is just what people did. I did vote between 4 & 5 because that is where I'm most of the time now.

 

[Rustic23]

Without knowing other sources of income in retirement, I don't see the validity of the poll. OK, <1M, but the person has $100,000 a year in Gov, Cola, pension. Or 5M, three kids under the age of 15, 35 years old, and no SS or pension. It is the why behind the number that, IMHO, gives it credence.

So nice, and answers are interesting, but I don't know what value it serves. But, hey, it's fun so maybe it does not have to.

 

[unclemick]

250 K, 1993, Louisiana swamp - no mortgage, utilities except electricity, no property tax, health insurance, car payment, etc. And a seriously bad attitude where spending money was concerned.

Not recommended in any way. As to 'my number' it was over 1 mil at age 63 which I had graphed out. A lay off at age 50 caused a serious interruption.

An eclectic mixture of temp work, early pensions, early SS, and other events followed.

heh heh heh - To this day references to dryer sheets and The Four Yorkshire men bring a smile.

 

[Dtail]

I didn't have a goal/number that I wanted to get too. I just got there by accident by saving and investing. I figured I would work forever and that is just what people did. I did vote between 4 & 5 because that is where I'm most of the time now.

Same here conceptually except the number is 1-2 mil.

 

[stepford]

In 2007 I'd have used a number of $2M and today maybe $2.5M. The effects of inflation and of the reduced needs for savings being 12 years older tend to work against one another and keep my number somewhat stable.

 

[RxMan]

I’m wondering what our magic number is as I read through these forums. It reminds me of those old ING commercials with people carrying around their retirement numbers.

I’m 45 but my DW is only 32. That means that I have to plan to ensure she’ll have enough money for her expected several years after I’m gone.

Preliminary rough estimates has me possibly being able to call it quits in 5 years at the age of 50. Realistically between wanting the extra cushion and the dreaded OMY syndrome I’m probably looking at retirement around age 52-53 which still sounds pretty good to me.

Also I’m not going to rule out part time work or work from home options that may allow me to be partially employed but not technically fully retired. At least finding ways to cut back hours would allow me to continue to bring in money especially in those years prior to access to retirement accounts. And it would be a bonus if one of these reduced hours options included benefits.

I’d like to build our cash accounts before seriously considering retirement so we can ride out and early retirement drop in the markets. Also, I’m worried about having enough balance in our taxable accounts so we can use those funds up until I reach 59.5 years old.

The poll was interesting and I enjoy reading about everyone’s own perspectives. My big concern now is trying to accurately estimate healthcare costs and taxes in any can I retire calculations.

I will say I never expected to be in the position we’re in while still in my 40s. I guess paying yourself first really does add up over time.