sunnysideup
Recycles dryer sheets
I have been reading this site for a couple of months now and I am wondering if a pension makes a difference in how much you stress about your money lasting....
If you retire with a good old fashioned pension and are guaranteed at least 50% of your preretirement income and a reasonable amount of savings, (define that as what FIRECALC projected as necessary to live your live as you choose), do you think have fewer worries about money?
I am guessing that since most of us have been through some bad markets, if one's only source of income were investments, you would worry much more than someone with a large guaranteed income stream. Do those of you with no pension worry? Or do you give yourselves extreme financial cushions?
My question is due to my hybrid situation--and I am sure I am not alone. I plan to retire 5 years prior to taking the first pension payments, 8 years prior to the (smaller) second pension payments, so I can get the full amounts. The combined pensions at age 65 would take care of 25% of my projected retirement spending. So since the first leg of my RE would be on my investments, I get stressed just thinking about it!
I have been saving like mad for 10 years so I can have a comfortable retirement and not stress out whenever the DJ drops 20%. One thing I am considering is purchasing an immediate annuity upon retirement with 10-20% of my savings to eliminate the "worries", even though I have read enough about asset allocation to realize if I do it right, I should have enough in cash to weather an extended low in the market. (BTW, my DH says I am crazy to even consider an annuity since I understand the principles of asset allocation during retirement.)
So I am curious to hear what you veterans of retirement say? Is the worry factor related to guaranteed income or it is related to emotions/personality (as in, yes I tend to be a worrywart ) ?
Norma
If you retire with a good old fashioned pension and are guaranteed at least 50% of your preretirement income and a reasonable amount of savings, (define that as what FIRECALC projected as necessary to live your live as you choose), do you think have fewer worries about money?
I am guessing that since most of us have been through some bad markets, if one's only source of income were investments, you would worry much more than someone with a large guaranteed income stream. Do those of you with no pension worry? Or do you give yourselves extreme financial cushions?
My question is due to my hybrid situation--and I am sure I am not alone. I plan to retire 5 years prior to taking the first pension payments, 8 years prior to the (smaller) second pension payments, so I can get the full amounts. The combined pensions at age 65 would take care of 25% of my projected retirement spending. So since the first leg of my RE would be on my investments, I get stressed just thinking about it!
I have been saving like mad for 10 years so I can have a comfortable retirement and not stress out whenever the DJ drops 20%. One thing I am considering is purchasing an immediate annuity upon retirement with 10-20% of my savings to eliminate the "worries", even though I have read enough about asset allocation to realize if I do it right, I should have enough in cash to weather an extended low in the market. (BTW, my DH says I am crazy to even consider an annuity since I understand the principles of asset allocation during retirement.)
So I am curious to hear what you veterans of retirement say? Is the worry factor related to guaranteed income or it is related to emotions/personality (as in, yes I tend to be a worrywart ) ?
Norma