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View Poll Results: How much of your retirement income comes from "guaranteed" sources?
0% to 25% 83 35.62%
26% to 50% 39 16.74%
51% to 75% 52 22.32%
76% to 100% 59 25.32%
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How much of your retirement income is "guaranteed"?
Old 09-13-2015, 10:01 AM   #1
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How much of your retirement income is "guaranteed"?

As we get out of the accumulation phase and need to generate income from our retirement savings I was wondering how much of people's income comes from market returns (dividends, capital gains, sale of principal) and how much from "guaranteed" income streams not directly related to the stock or bond markets, like SS, pensions, SPIA, CD interest and perhaps even rent.
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Old 09-13-2015, 10:09 AM   #2
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Right now.... no guaranteed income. I have a DB pension that I can start at anytime, but the annual growth in benefit from 55-60 was pretty good so I deferred starting it but will probably do so next year. I also have a DC plan with an attractive annuitization option that I will likely take as a pension at some point... I have the DC money in a fairly aggressive equity fund so it will grow between now when I start it. Then we have SS.

Once all those come online our guaranteed income will be about 55% of the total. So we'll go from zero to roughly 26% in a couple years and then 55% in 10 years.
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Old 09-13-2015, 10:10 AM   #3
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Just SS for us. CD interest I would say is an FI choice and thus on a par with bonds as a choice. But we could debate that one.
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Old 09-13-2015, 10:14 AM   #4
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I am not yet retired yet, but here is my plan...

My income from 56 to 62 will be 100% rental income, plus any other extra money I can find. I should be able to save a bit from this income.

Start taking dividends at 62 from my investments and start selling rental properties. One property per year.

Add in a $15K annual pension at 65 from my mega corp employer.

Add in $3K per month from SS at 70.
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Old 09-13-2015, 10:25 AM   #5
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Is any retirement income truly guaranteed?

Kinda like there is no such thing as a free lunch.
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Old 09-13-2015, 10:43 AM   #6
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Quote:
Originally Posted by BBQ-Nut View Post
Is any retirement income truly guaranteed?

Kinda like there is no such thing as a free lunch.
Notice I used " " around guaranteed in my post
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Old 09-13-2015, 10:46 AM   #7
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I'm not able to retire yet, but a military pension for a Lieutenant Colonel retiring at 20 years is about $4000 a month right now. Assuming that inflation and pay increases closely match for the next nine years, I hope to retire at 20 years of service with 100% of normal expenses + taxes paid out of that $48K (inflation adjusted). Rental income, investments, etc would pay for lifestyle upgrades on a case-by-case basis.


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Old 09-13-2015, 10:47 AM   #8
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Quote:
Originally Posted by BBQ-Nut View Post
Is any retirement income truly guaranteed?....
Did you note that the OP put guaranteed in quotes?

SS and most pensions are about as guaranteed as you can get.... as are annuities issued by a credit worthy insurer (which is most of them). It's all relative... relative to portfolio returns.... those sources are guaranteed.
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Old 09-13-2015, 10:48 AM   #9
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Counting 100% of DH's SS and a percentage of our rental income, we're at 35% from "guaranteed" sources.

It will increase to 42% in a year when I "turn on" my two small pensions. (In my case, they are not cola'd and there is not a huge increase in waiting so I'm going to start drawing them.)

It will increase to 62% when I draw SS in 8 years.

And all that assumes our budget stays the same. I'm looking at a shrinking budget in 10 years or less as the kids get shoved out of the nest.
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Old 09-13-2015, 10:51 AM   #10
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Zip. Maybe in about 15 years when social security rolls in.

I never had any guaranteed income before why start now?
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Old 09-13-2015, 10:53 AM   #11
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Quote:
Originally Posted by BBQ-Nut View Post
Is any retirement income truly guaranteed?

Kinda like there is no such thing as a free lunch.
About 40% of mine if from a local government pension ( Large CA city, not in the state Calpers system ) If they go BK and stop paying , I will start seizing city assets to sell or lease out. Part of this draconian plan would be to commandeer a group of parking meters in a busy area, and collect the quarters and nickels until my tiny pension $ is met for the mo.
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Old 09-13-2015, 10:55 AM   #12
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The old FIRE vs SIRE question. Nothing wrong with asking again though, a distinction that probably isn't clarified here often enough. 100% SIRE is a different perspective than 0% SI when it comes to many questions posed on ER.org. Makes me cringe when I see a very high SI member answer a question posed by a newbie very low SI member without qualifying...

None yet, but we'll be about 20% SI when all is said and done (as my sig line shows)
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Old 09-13-2015, 10:56 AM   #13
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How much of a diversified stock portfolio is guaranteed? Same question for bonds.

My guess is one can count on 40% of the stocks in a really terrible market. Maybe 70% of the bonds. So for a 50/50 AA, maybe worst is 55% of the portfolio is going to be spendable. Assumes we go down and don't come back in one's lifetime. And no rebalancing.
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Old 09-13-2015, 10:56 AM   #14
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Even when SS kicks in our guaranteed portion will be less than 10%, as I contributed little more than the minimum needed to qualify.

We have the option of purchasing an annuity, which would increase that number, but I don't think the benefit outweighs the cost.
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Old 09-13-2015, 11:02 AM   #15
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My pension pays about 40% of my living expenses. I have another 5 years until SS which will cover just about everything else. Since I have 3 years left on my home mortgage, living expenses are a bit higher for now. For that reason, I have 3 years worth of needed money in a money market account in my 401k.
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Old 09-13-2015, 11:10 AM   #16
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Our 2 pensions cover 55% of expenses currently. One is non-COLA, so that % decreases over time. Rentals cover another 15%. With SS, we go well over 100%, but we'll probably sell the rentals before that, so it's right at 100%. The non-COLA pension eventually pulls it back down to 90%.
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Old 09-13-2015, 11:22 AM   #17
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Probably 91% this year and 97% next year depending on if expenses go back closer to average. Am loosening the purse strings after a lifetime of frugality to avoid being the richest ashes in the sea. Add in the muni interest which, while not "guaranteed" is pretty steady...
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Old 09-13-2015, 11:23 AM   #18
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With mine and DW military pension, DW FERS Pension, VA Disabilities income; over 100% before SS kicks in.
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Old 09-13-2015, 11:40 AM   #19
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Our guaranteed retirement income is in the highest % bracket now, but that is because we are not drawing off retirement accounts and live off Social Security and taxable accounts dividends (no pensions or annuities). We both started SS @ 62 and are controlling taxable income stream due to the ACA subsidy. Will be a tricky income scenario as we age with manipulation of income before/after 70.5 RMD's (after 65 for medicare) will put us in the much lower to lowest range of guaranteed income bracket. Wife's SS is used for travel and extras to remind us that it will go away when one of us does. My SS and taxable account dividends are used to cover our living expenses.
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Old 09-13-2015, 11:43 AM   #20
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About 48% of my income originates from "guaranteed" sources, including
  • Social Security
  • tiny pension
  • equal monthly payments from the TSP G Fund.
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