Is Everyone a Multi-Millionaire?

[aim-high]

Around here, a fire/police lieutenant RE'd at 58 or so can get a pension of upwards of $75-$80K, COLA'd. So a cop/fire couple could easily pull in well over $100K; more like $150K.

Plus if he/she comes down with even a minor "disability" (tinnitus, minor skin cancer, blurry vision etc) within 6 yrs after retirement, they are likely to get the city to pay their Fed taxes on that pension as well.

Throw in a 25% discount on your property taxes (because, the thinking goes, you were an underpaid civil servant, now struggling in retirement) and....pretty sweet.

If someone is fortunate to have such a deal, is it guaranteed? I don't see how such pensions can remains solvent. Is there any chance they get modified after the fact?

 

[aja8888]

Around here, a fire/police lieutenant RE'd at 58 or so can get a pension of upwards of $75-$80K, COLA'd. So a cop/fire couple could easily pull in well over $100K; more like $150K.

Plus if he/she comes down with even a minor "disability" (tinnitus, minor skin cancer, blurry vision etc) within 6 yrs after retirement, they are likely to get the city to pay their Fed taxes on that pension as well.

Throw in a 25% discount on your property taxes (because, the thinking goes, you were an underpaid civil servant, now struggling in retirement) and....pretty sweet.

Police and firemen have dangerous jobs. Great that they can get a good pension. I worked hard for 35+ years in industry and have done well also. I suppose I am in the bottom tier of the group in the thread subject, but what the heck, it's all good.

 

[Mulligan]

If someone is fortunate to have such a deal, is it guaranteed? I don't see how such pensions can remains solvent. Is there any chance they get modified after the fact?

Discussing pensions in general is like discussing the US weather in general. So many variables involved but ultimately if the system is adequately funded and uses conservative actuarial assumptions they should be fine, the others may not. My pension was modified. Changed COLA to 2% fixed unless CPI is over 5%. The irony of it is since inflation has been running below 2% the past few years it has actually temporarily increased my COLA.


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[eta2020]

Police and firemen have dangerous jobs. Great that they can get a good pension. I worked hard for 35+ years in industry and have done well also. I suppose I am in the bottom tier of the group in the thread subject, but what the heck, it's all good.

Do you also get SS?

Many police officers get pension but no SS. If you get pension and you also get full SS then that pension has very different value. IE Military pension....

Otherwise you can lower value of this pension by 1800 * 12 at age 62.

 

[wingfooted]

Is anyone else transitioning their thinking from "FI" (for purposes of argument $2MM net worth) to "rich" (> $10MM net worth).


I have to admit my personal goalposts are starting to shift.

And BTW I'm writing this watching the sunset from poolside in South Ari Atoll, Maldives.


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[Lancelot]

I am a multi millionaire- in Vietnamese Dong One Yankee dollar is equal to 21,200 VND.

Withdrawing one million from an ATM- Priceless

 

[eytonxav]

The irony of it is since inflation has been running below 2% the past few years it has actually temporarily increased my COLA.


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Gov't way of calculating inflation is one thing, but actual inflation, at least from my household, is always way more

 

[aja8888]

Do you also get SS?

Many police officers get pension but no SS. If you get pension and you also get full SS then that pension has very different value. IE Military pension....

Otherwise you can lower value of this pension by 1800 * 12 at age 62.

Yes, both DW and I get SS. We paid into the system since the 1960's so I guess we are getting some of our deposits back. Neither one of us has a pension from a corporation, unfortunately.

 

[brewer12345]

Is anyone else transitioning their thinking from "FI" (for purposes of argument $2MM net worth) to "rich" (> $10MM net worth).


I have to admit my personal goalposts are starting to shift.

And BTW I'm writing this watching the sunset from poolside in South Ari Atoll, Maldives.


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Nope. Just want to cover my six and live my life.

 

[hakuna matata]

Is anyone else transitioning their thinking from "FI" (for purposes of argument $2MM net worth) to "rich" (> $10MM net worth).

Nope. Not even close, We will be retiring this year with just above this number and IF we both worked until 65 we likely could get to a much higher number...but why? It isn't worth it to us, we have more then enough and would rather enjoy our freedom and time now, who knows what the future holds. I would rather enjoy things while I can and having more money isn't going to make things that much more enjoyable.

 

[ERhoosier]

Police and firemen have dangerous jobs. Great that they can get a good pension........

Not to insult first responders at all, but police "only" come in 10th in list of most dangerous jobs in US and firemen are at less risk than that. Police are at significantly lower risk of on the job mortality than truckers or trash collectors. Farming is more than twice as deadly, and commercial fisherman face over six times the risk.
http://finance.yahoo.com/news/the-10-most-dangerous-jobs.html
To be fair, the 'most dangerous jobs' list changes a bit. Police were 10th in 2010, but seem to have dropped just out of the top 10 for 2011.
Top 10 Most Deadly and Dangerous Jobs in America 2000-2020

If having a dangerous job is the main justification for a good pension, seems there are many who are being short-changed. Just sayin'.

 

[gauss]

Is anyone else transitioning their thinking from "FI" (for purposes of argument $2MM net worth) to "rich" (> $10MM net worth).


I have to admit my personal goalposts are starting to shift.

No -- the opportunity costs of continuing to work must be considered. Lost DF & DFIL during the past 12 months. So glad that I didn't have to manage work at the same time as dealing with this.

I set my FI number by spending as much as I felt comfortable each year without a budget to constrain me. Looked at the spending over 10 years and found it to be very consistent. Once I had enough funds and passive streams of income to cover the need, along with conservative buffer, I pulled the plug when the opportunity presented itself (at ~ 47 years old).
Corporate pensions, DINK, SS & frugalness played a significant part in this.

-gauss

 

[rodi]

I'm (just) a multi-millionaire if I include the value of my paid for house. So by net worth - I am. That's part of being in a high cost of living area.

But - if you look at my investible assets - not even close, though I'm above $1M.

I guess that's why I put in human capital, rather than financial capital in our new driveway. Saved thousands of dollars laying the pavers ourselves. If I'd had a million more than I do, in investible assets, I would totally have paid to have it done.

Guess I'm still doing the RE by being frugal and LBYM method... not through huge assets.

 

[Mulligan]

Gov't way of calculating inflation is one thing, but actual inflation, at least from my household, is always way more

Maybe but, if I didn't get the automatic 2%, I would have received the reported 1.5% CPI instead. The 2% slowly add up. My pension after tax income is up $400 from when I retired but my expenses haven't increased anywhere close to that the past 4 years. But I'm divorced and have the all the child expenses behind me. I haven't been exposed to much medical inflation yet thanks to my underwritten individual plan that will be disappearing sometime soon.


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[ERhoosier]

There's always the bogleheads net worth by age survey:

Bogleheads • View topic - Improved Net Worth by Age [and plot]

At 41 the median with SS/pension is 1.2M. Like this forum, even the median poster would be an outlier compared to the average american.

What's interesting is that the net worth curve appears to flatten after 3-4M. Perhaps people start spending down/gifting the money at this point?

I've seen similar NW stats elsewhere too. My guess is that's where many middle-aged folks start to realize how little additional income/wealth REALLY buys (after taxes ). A nicer car & bigger home perhaps, but at the expense of a big part of one's remaining life. At some point many seem to realize they ain't gonna be Bill Gates but they ain't gonna be livin' under a bridge either. That may be the real AHA moment they accept that time>>>$$$.

 

[aja8888]

Not to insult first responders at all, but police "only" come in 10th in list of most dangerous jobs in US and firemen are at less risk than that. Police are at significantly lower risk of on the job mortality than truckers or trash collectors. Farming is more than twice as deadly, and commercial fisherman face over six times the risk.
http://finance.yahoo.com/news/the-10-most-dangerous-jobs.html
To be fair, the 'most dangerous jobs' list changes a bit. Police were 10th in 2010, but seem to have dropped just out of the top 10 for 2011.
Top 10 Most Deadly and Dangerous Jobs in America 2000-2020

If having a dangerous job is the main justification for a good pension, seems there are many who are being short-changed. Just sayin'.

Hmmm, gotta love the internet for creating the facts. I'd rather be trolling for crabs than doing nighttime traffic stops in Houston or some other big city.

Our town is in the process of putting a cop killer in prison and we just buried a few fireman who lost their lives in a warehouse fire.

Seems like there are lots of dangerous jobs out there. When I was flying 100,000 miles per year on business, I always worried about the plane going down, or being taken hostage in a foreign country. It never happened but I was mugged and had my car and wallet taken in a big city one night (and lucky to be left without being shot). Guess my job didn't make the top ten list though.

 

[NW-Bound]

...I'd rather be trolling for crabs...

Me too!

Oh man, how many times have I said that the only material thing I still wish is to have a waterfront property on the Puget Sound, so that I can row a kayak out to check my crab traps every evening to look for dinner? It is not a chore, but a privilege. But buying such a place would deplete my stash, leaving me with much less to count.

 

[aja8888]

I'm (just) a multi-millionaire if I include the value of my paid for house. So by net worth - I am. That's part of being in a high cost of living area.

But - if you look at my investible assets - not even close, though I'm above $1M.

I guess that's why I put in human capital, rather than financial capital in our new driveway. Saved thousands of dollars laying the pavers ourselves. If I'd had a million more than I do, in investible assets, I would totally have paid to have it done.

Guess I'm still doing the RE by being frugal and LBYM method... not through huge assets.

Nice job on the paver driveway, BTW!

Like said above, as your assets grow into several million, it seems you really don't increase the spending to compensate. I would guess that may be because you have already formed your spending and lifestyle patterns and changing that may be difficult to justify, based on the satisfaction of needs and wants you are accustomed to.

I know that if we were to triple our net worth quickly, DW would probably press me for a new wood floor and I would buy the Corvette I dream of. But compared to the increase in NW, it would not be significant.

 

[Mulligan]

Me too!



Oh man, how many times have I said that the only material thing I still wish is to have a waterfront property on the Puget Sound, so that I can row a kayak out to check my crab traps every evening to look for dinner? It is not a chore, but a privilege. But buying such a place would deplete my stash, leaving me with much less to count.

That is my dad's stock answer whenever I try to get him to spend money on himself before the heirs blow it all. He says "I just hope you all enjoy spending it half as much as I enjoyed counting it."


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[W2R]

Me too!

Oh man, how many times have I said that the only material thing I still wish is to have a waterfront property on the Puget Sound, so that I can row a kayak out to check my crab traps every evening to look for dinner? It is not a chore, but a privilege. But buying such a place would deplete my stash, leaving me with much less to count.

I have no idea of the relative real estate prices at Puget Sound, or in your area. Still, if you sold both of your present houses, I'd bet you could buy at least a small condo up there. It probably wouldn't even deplete your stash, especially if the location is a little off the beaten track.

When you are out rowing your kayak to check your crab traps, you probably wouldn't even care about the size of your home or how elegant it is.

 

[NW-Bound]

That is my dad's stock answer whenever I try to get him to spend money on himself before the heirs blow it all. He says "I just hope you all enjoy spending it half as much as I enjoyed counting it."

For a guy who thinks of himself as frugal, I already spend way more money than I thought I would.

"Quicken, Quicken on the screen, how much money have I spent in the last 12 months?"

Just the two biggest categories, housing and healthcare, set me back significantly more than $50K. I already spend more than I should, I think, but FIRECalc says that with SS for both of us, I can spend a lot more, way into the 6 figure. But above a certain point, it is just wasted. I am basically a frugal guy and with simple tastes, so my diminishing point of return is not that high.

 

[NW-Bound]

I have no idea of the relative real estate prices at Puget Sound, or in your area. Still, if you sold both of your present houses, I'd bet you could buy at least a small condo up there. It probably wouldn't even deplete your stash, especially if the location is a little off the beaten track.

When you are out rowing your kayak to check your crab traps, you probably wouldn't even care about the size of your home or how elegant it is.

My 2 homes would buy more than a small condo, but I want more than that. I also want a nice view, some frontage and a large lot, to compensate for downsizing from 2 homes into one.

 

[W2R]

But I do not like a small condo. I also want a nice view and some frontage, to compensate for downsizing from 2 homes into one.

Ah! Well, that would surely complicate things. But remember, that during the time when you are out in your kayak in that beautiful Puget Sound area (hopefully most of the day?), you probably wouldn't even think of your square footage or view.

 

[NW-Bound]

There will be stormy days when it is not safe to be on the water. That's when I would stay warm inside, sipping my coffee laced with a bit of rum, watching the sea through big panes of glass. Need to have a nice view to be able to do that.

Then, wife also needs a garden plot to grow "stuff", then a pad to park the RV, etc... And how do I keep a kayak in a small condo? Kayak should be tied at the private dock.

 

[mickeyd]

I always find it kinda comical when this discussion of "millionaire" status comes up here and other favorite discussion groups. Seems like just about everyone has their own twist on what the heck a millionaire is or what a multi-millionaire is.

Here my take on it. Since DW and I combine all of our investable assets to form one big portfolio, it takes $2M in order for both of us to be claiming millionaire status. $1.9 million does not get it. Thus, in order for us to claim multi-millionaire status, we need $4,000,000 at the bottom line.

I'm pretty sure I'm correct on this.