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Old 06-30-2014, 04:50 PM   #41
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If we get a 1930s meltdown I plan to buy glass dinnerware. Some of that stuff is worth a fortune from the last meltdown in the 1930s.
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Old 06-30-2014, 05:02 PM   #42
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If we get a 1930s meltdown I plan to buy glass dinnerware. Some of that stuff is worth a fortune from the last meltdown in the 1930s.
I am envious, you will be very well off in 2098!
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Old 06-30-2014, 05:10 PM   #43
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Another consideration for OP, NYTimes article today about pension safety: http://dealbook.nytimes.com/2014/06/...=business&_r=0

Quote:
More than a million people risk losing their federally insured pensions in just a few years despite recent stock market gains and a strengthening economy, a new government study said on Monday.

The people at risk have earned pensions in multiemployer plans, in which many companies band together with a union to provide benefits under collective bargaining. Such pensions were long considered exceptionally safe, but the Pension Benefit Guaranty Corporation reported that some plans are now in their death throes and could not recover. The aging of the work force, the decline of unions, deregulation and two big stock crashes have taken a grievous toll on multiemployer pensions, which cover 10 million Americans.
Are you absolutely sure you are safe? I do not mean to be an alarmist. Just that one should look at worst case possibilities.
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Old 06-30-2014, 06:06 PM   #44
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Another consideration for OP, NYTimes article today about pension safety: http://dealbook.nytimes.com/2014/06/...=business&_r=0

Are you absolutely sure you are safe? I do not mean to be an alarmist. Just that one should look at worst case possibilities.
In our case we have several private pensions from different companies between us that last time I looked up were at least ~90% funded, so they would all have to go 100% belly up as well as the PBGC corporation for us to not get anything. But even if that happened it wouldn't be the end of the world because we have other retirement income streams and we are working on keeping our fixed expenses relatively low.
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Old 06-30-2014, 08:18 PM   #45
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Another consideration for OP, NYTimes article today about pension safety: http://dealbook.nytimes.com/2014/06/...=business&_r=0

Are you absolutely sure you are safe?

I for one will not say absolutely since I cannot control it. But our system is not pooled, though the legislatures have tried in the past as ours is the best system. I live on about 60% of mine, so I am in decent shape and the system is not in any short or midrange danger, being over 85% funded. They have many levers at their disposal including increasing contribution rate, extending service years etc. They already capped COLA to automatic 2% increase unless CPI is over 5% then it is 5%. On the negatives, we did not pay into SS, nor are we part of the pension guarantee fund.


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Old 07-01-2014, 09:18 AM   #46
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Because we will be dead anyways? If we hit a mid 1960s stretch to 1982, I may be in big trouble. 15 years is a long time to someone pushing 70. Maybe I am a nervous Nelly, but hey, since Obygn hasn't posted much lately someone has to take the voice of concern.


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Old 07-01-2014, 11:05 AM   #47
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<SNIP>

In my own case I live very nicely on a defined benefit pension and SS. No debts of any sort, own the home, home has recently been completely renovated, new vehicle. I am a widower and have no one else to be responsible for.

So to my topic that I have not seen discussed. It would seem that all the rules of thumb, conventional wisdom, expert advice about investments, allocations of stock/bonds, rebalancing, etc., go out the window. Seems to me that I can tolerate a lot more risk, i.e.. 100% stocks and more.

Thank you. I await a thoughtful discussion, that I know this forum is capable of.
Heh, heh, what does it say about me that I was expecting you to say "So I don't need to take any more risk because I already have enough!"

To each his own, as always. Personally, I prefer a smoother ride to the prospect of a potential big pay day (with possibility of a significant loss). That is, of course, if you don't really need the big pay day to meet your 100% confidence in not running out of money. Once again, YMMV.
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Old 07-01-2014, 11:43 AM   #48
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Many have reached escape velocity using a pension and SS. The only danger I see is that an exogenous event may change your course and send you plunging back to ground. Will you have enough fuel to alter course and avoid a collision?

I can think of two things that might send one crashing back to the planet. One is a serious economic event that causes a pension to be drastically reduced. Detroit comes to mind. So, how safe is your pension?

The other is that Congress will continue with its decision to do nothing about SS funding and somewhere in the next 10-15 years we will see SS cut back about 25%. Can you survive that?

Can you survive both? If so, place those bets in Las Vegas and put your nest egg at risk. Otherwise, growing it a bit would not be a bad idea.

Have you read the book "The Martian"? As long as we are using outer space analogies you might consider that having resources that can be re-purposed is not a bad idea.
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Old 07-01-2014, 12:18 PM   #49
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I am pretty sure that I have reached escape velocity. The bull market makes it harder to tell, but even so I am pretty sure I am there. I am learning to loosen the purse strings a little more each year. Still, my nestegg keeps on growing by leaps and bounds faster than I can loosen them, despite living off my nestegg and my three figure FERS mini-pension.

And this morning, I sent off my marriage license and divorce decree to Social Security at their request, so that hopefully they can begin to pay me divorced spousal benefits while my own benefits continue to grow until age 70.

I was poorer than dirt for years and years, and now suddenly this? Life is strange! I am not religious, but still this almost feels like some sort of test.
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Old 07-01-2014, 01:00 PM   #50
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You deserve it all W2R . Time to enjoy life a lot.

Nice avatar.
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Old 07-01-2014, 01:03 PM   #51
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Here's what FIRECalc says about "escape velocity":

I used the defaults except: $1M portfolio, % equities, WR, and the key subtract $1M+$1 from the portfolio in 2043 (under the Portfolio Changes tab). The last item ensures that the portfolio value is larger than at the start by at least $1 at the end of the 30 years. Then I fixed the equities % and found the highest WR (to 0.1%) that still resulted in 100% success.

Equities %, SWR (100% success)
0%, 0.0%
10%, 0.3%
20%, 0.9%
30%, 1.4%
40%, 1.8%
50%, 2.1%
60%, 2.1%
70%, 2.2%
80%, 2.1%
90%, 2.1%
100%, 2.1%


Pretty tough to say you're at escape velocity, though certainly no withdrawals will work if you have the right portfolio.
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Old 07-01-2014, 01:16 PM   #52
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I am pretty sure that I have reached escape velocity. The bull market makes it harder to tell, but even so I am pretty sure I am there. I am learning to loosen the purse strings a little more each year. Still, my nestegg keeps on growing by leaps and bounds faster than I can loosen them, despite living off my nestegg and my three figure FERS mini-pension.

And this morning, I sent off my marriage license and divorce decree to Social Security at their request, so that hopefully they can begin to pay me divorced spousal benefits while my own benefits continue to grow until age 70.

I was poorer than dirt for years and years, and now suddenly this? Life is strange! I am not religious, but still this almost feels like some sort of test.
That sounds great. What is a FERS mini-pension?
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Old 07-01-2014, 01:21 PM   #53
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Here's what FIRECalc says about "escape velocity":

I used the defaults except: $1M portfolio, % equities, WR, and the key subtract $1M+$1 from the portfolio in 2043 (under the Portfolio Changes tab). The last item ensures that the portfolio value is larger than at the start by at least $1 at the end of the 30 years. Then I fixed the equities % and found the highest WR (to 0.1%) that still resulted in 100% success.

Equities %, SWR (100% success)
0%, 0.0%
10%, 0.3%
20%, 0.9%
30%, 1.4%
40%, 1.8%
50%, 2.1%
60%, 2.1%
70%, 2.2%
80%, 2.1%
90%, 2.1%
100%, 2.1%


Pretty tough to say you're at escape velocity, though certainly no withdrawals will work if you have the right portfolio.
Historically, 30 year TIPS yield 1 - 3% real with guaranteed return of principal if held to maturity.
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Old 07-01-2014, 01:21 PM   #54
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That sounds great. What is a FERS mini-pension?
FERS is the retirement system for federal employees hired since the 1980's. I call it my "mini pension" or my "itsy bitsy teeny weenie yellow polkadot federal pension" sometimes, because in my case it isn't much; 4 figures annually, 3 figures each month. Still, it is good to have.
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Old 07-01-2014, 01:30 PM   #55
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FERS is the retirement system for federal employees hired since the 1980's. I call it my "mini pension" or my "itsy bitsy teeny weenie yellow polkadot federal pension" sometimes, because in my case it isn't much; 4 figures annually, 3 figures each month. Still, it is good to have.

Okay I get it. I misinterpreted what you wrote to mean $100K+ annually and wanted to ask where I sign up!

Still good work. When we started getting serious about ER we were pleasantly surprised at how much our SS and random pensions from former employers added up to be, especially after we combined that with reviewing the budget and optimizing our living expenses, being in a lower tax bracket and not having to save for retirement any more.
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Old 07-01-2014, 04:07 PM   #56
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I am pretty sure that I have reached escape velocity...
What do you mean?


Aren't you already past Mars?

Just be sure you do not fall into Jupiter. Its mass is 300 times that of Earth.

Even I with a WR of 3.5% will escape, or am escaping, when I consider that in a few more years, I can turn on the rocket booster called SS if necessary.

And I just escaped the 110F heat, and am posting now in the cool mountain breeze. Life is just so darn good.
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Old 07-01-2014, 05:51 PM   #57
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What do you mean?


Aren't you already past Mars?

Just be sure you do not fall into Jupiter. Its mass is 300 times that of Earth.

Even I with a WR of 3.5% will escape, or is escaping, when I consider that in a few more years, I can turn on the rocket booster called SS if necessary.

And I just escaped the 110F heat, and am posting now in the cool mountain breeze. Life is just so darn good.
It is supposedly 94F here right now, at almost 6 PM, but with our humidity it feels like at least 110F.... HOT hot hot hot hot. I am so glad I have ceiling fans to help the AC to keep up. Enjoy that cool mountain breeze.

As for falling into Jupiter, I am slowing coming to the conclusion that there are just a lot of things in life that are beyond our control. I'll do what I can to keep the StarShip W2R on course, and then just let go and hope for the best.
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