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Re: Any middle class ER wannabe's?
Old 03-30-2005, 03:24 AM   #21
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Re: Any middle class ER wannabe's?

Greetings JWV:
Quote:
Bookm ( is that like Book'em, Dano! by the inimitable Jack Lord in Nord's stomping ground?)
It certainly is. The moniker is job-related. I agree with your points completely too. I think I saw someone here with a signature line that more or less says that you regret more the things that you never tried than those you have. I think that's similar to your last line in your post, and it's true. You have to allow yourself a little fun while still saving.

Bookm
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 06:38 AM   #22
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Re: Any middle class ER wannabe's?

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Anyone here that is earning close to the median household income (I think ~50k U.S.) who has a plan for ER?
Hi, laurencewill. I am within the median household income range, and I dream of ER. Highest salary was $65K for about six months around the time of the Y2K panic. (I was a contract mainframe programmer.) I say dream because my plan for now does not go beyond just saving around 30% of gross.

I max into our deferred comp (457) plan, max my ROTH IRA, go for $50/month into one DRIP account, and put some teeny amounts gambling with individual stocks. It's tight and there's not much left for taxable-account savings. I started late so I am trying to save a lot. My plan is for 8 more years at this local government job--I'll be 51 then--and then I'll probably be barebones FI but will evaluate at that time if I'm ready for RE.

In the meantime, I am learning about asset allocation. I was wholly into the VFINX (Vanguard S&P 500) for my rollover IRA. I had read Bernstein's Four Pillars of Investing and Gillette Edmunds Retire Early and Live Well before I joined this forum so I knew the need for asset allocation but I thought I was limited by Vanguard into 2 transfers per year per account. The diversification advice on these forums finally got me to call Vanguard and I found out I can transfer, and I have taken steps towards diversifying just in the last six months. However, all my 457 plan money is in a broad-market index because that fund has the lowest expense ratio.

I want to stop being obsessed with checking my balances each day. I want to enjoy life more and avoid the monkish existence mentioned by another poster (Hyperborea?).
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 09:55 AM   #23
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Re: Any middle class ER wannabe's?

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Sooo, DW & I are middle class ERs from a single income with 3kids <all now employed college graduates!>...
No inheritence/trusts/stock windfalls - just ERing the old fashion way, we earned it!!
AND THEY say it can't be done! 8)
Again, the benefit of a pension available at a young age (compared to most pension plans) which is probably about as secure as a pension can be is the secret here. A pension, particularly a government pension, is probably the best way for most middle class wage earners to retire. To ignore the pension as the source of your ability to ER is to venture into the strange world of Galtian accounting and finance.
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 12:23 PM   #24
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Re: Any middle class ER wannabe's?

I am not sure how high the "middle income" extends, but if I'm in it, I must be at the high side ($80K). Since I started working at age 20, my pension plan would let me collect 70% salary at age 55...thus, age 55 is the outer limits of how long I plan to work; I figure I can muddle through on $60K per year, since LBYM causes me to live on less than that. I look on the pension as my bedrock, with my private investments, ROTH IRAs, etc., as pure bonus.

Flipstress, you're correct in the desire to want to enjoy life each day. ER should be a goal, not an obsession. (I need to tell myself this often, too).

I'll sure be glad to walk out the working door for the last time.

Cheers....Mike
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 02:53 PM   #25
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Re: Any middle class ER wannabe's?

Obviously the big variable I didn't really speak to is cost of living. My friend bought a bigger house than I for half the cost, he's in Deleware, I'm in San Diego. Now if only I could convince my wife to move someplace cheaper when we ER......
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Old 03-30-2005, 03:47 PM   #26
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I never ignored it and it's NO secret -- I earned it.
Good post, GD-ER. And for any young dreamers getting the impression that a military retirement is a slam-dunk deal, remember that you only hear about it from the survivors.

Joining the military for the money is even more messed up than those joining for the prospect of killing people & breaking things...

Case in point-- my scared-of-college nephew joined the Army when the Navy recruiter said he was too tall for submarines (?!?). The Army gave him a $5000 bonus for being able to write "Ranger" on his enlistment contract. By Nov 2001 (Happy Thanksgiving AND Birthday) he was on his way to Afghanistan. In June 2002 he was back for an encore (great 4th of July fireworks, and all the other workdays too). By Dec 2002 (Ho-ho-ho) he was in Iraq (yes, he was aware that the war wouldn't start for another three months). By May '03, West Point didn't seem like such a bad place after all.

Funny thing-- no one messed with him during Plebe Year. He's happier in his 2nd year, although he says that the only thing keeping down his Woop stress level is the Combat Weapons Team...
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 04:22 PM   #27
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Re: Any middle class ER wannabe's?

Hubby and I are on the high side.....combined we will pull in $185,000 gross this year. The variable is hubby's bonus, which could be quite substantial in 2005. If so, that just gets us closer to ER.

The dilemma we face is when to pull the plug. We have both grown accustomed to traveling and I picture us spending ER in a warm climate during the winter months and the remaining months back home in Calgary. Also, no kids yet so we don't know how much they'll cost. I am torn between paring down our lifestyle and ER'ing ASAP or keep working for "the man" and saving saving saving in order to travel.
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ClRe: Any middle class ER wannabe's?
Old 03-30-2005, 04:32 PM   #28
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ClRe: Any middle class ER wannabe's?

Calgary Girl -

Re: answer not if but when
I am not saying you didn't earn it but I imagine most people would rather be in your shoes around that time.
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 04:45 PM   #29
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Re: Any middle class ER wannabe's?

wildcat: Yes, it's a nice "problem" to have.
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 05:30 PM   #30
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Re: Any middle class ER wannabe's?

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I never ignored it and it's NO secret -- I earned it. It was part of the compensation package. I accepted lower wages for 25 yrs to receive deferred compensation in the form of a pension.
Right, I understand that. *I made no claim that it was not earned. *However, your salary was effectively higher because of the deferred compensation - probably on the order of 10's of thousands extra per year. *What probably helps most too is that they have no choice about the extra compensation going towards the pension - if they did many would probably spend it every year instead.

For the "average joe" the corporate pension is mostly gone and what's not gone doesn't look too sound, making a high income is not possible for everyone, and winning the "lottery" takes a lot of luck. *The point was that perhaps the government employee pension is the best route to FIRE for most.

Quote:
Although retirement programs have changed alot, since I enlisted -- they still can provide someone an ER<as HB mentioned>. IF they are willing to make all the sacrifices and accept the risks inherent with the duty. The extent of these sacrifices and risks are hard to predict and in retrospect -- I made a very good choice and my timing could have been alot worse...
Good points. *Pensions may have a lot of plusses for early retirement but they do come with restrictions.

Quote:
ER is more about choices - I could have taken a 6 figure job after I retired and still collected my pension -- BUT I chose ER. NOT everyone can walk away from that kind of money. I could have stayed in for another 3+ years, earning nearly double my retired pay and a higher pension. It takes a desire to ER - Life is definitely more than money!
Another good point. *Once I get to my "quit" amount I too could stay another year. *Will I? *I don't think so but then I'm not there yet. *No matter if it's saving from a high income job or a pension it takes getting to the point that you have the financial wherewithall to support yourself before you can make that choice.
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Re: Any middle class ER wannabe's?
Old 03-30-2005, 07:46 PM   #31
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Re: Any middle class ER wannabe's?

OK quick question to people on a topic I am probably too young to know anything about. With regard to corporate pensions do you have to be an employee for so many years to qualify for the pension? If so doesn't that prevent people from moving around in search of better jobs/wages? Sorry but I don't know a thing about 'em.
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 01:50 AM   #32
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Re: Any middle class ER wannabe's?

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OK quick question to people on a topic I am probably too young to know anything about. *With regard to corporate pensions do you have to be an employee for so many years to qualify for the pension? *If so doesn't that prevent people from moving around in search of better jobs/wages? *Sorry but I don't know a thing about 'em.
Wildcat
I'll take a shot at a response although its been a good 15 years since I have really worked through the pension issues. If this information needs update, anyone else please jump in.

Employee Retirement Income Secuity Act (ERISA) requires that pension vest after 5 years. That means if you work for a company under a covered pension from age 25-30, you have an interest in the pension, a right to receive the pension, which will not be lost if you change jobs.

Payment from the pension, under the terms of the pension, is a different matter. Although vested, the pension payment will probably not be available until age 55-65 or a set number of years of service (30 years is frequently used).

Pensions build in value (depending on the formula used) in the later years, so leaving after 5 years normally provides a very small pension.

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Re: Any middle class ER wannabe's?
Old 03-31-2005, 03:26 AM   #33
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Re: Any middle class ER wannabe's?

The only COLA in our future is what we might mix in our rum

Here is a slightly different angle on this
"middle class ER wannabe" thing. I know what makes me tick, ER-wise and otherwise. And, got a pretty good
handle on DW after 4 years together. The point is,
do any of you couples have extremely diverse economic
backgrounds? We do. I grew up comfortably
middle class. My spouse grew up dirt poor. She and her sister were talking about how they both tend to overbuy and hoard stuff (clothes, food etc). It's an obvious result of having grown up with pretty much nothing. Anyway,
meshing different lifestyles from the past can be a trick
no matter how you do it.

JG
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 04:02 AM   #34
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Re: Any middle class ER wannabe's?

SO was Catholic orphanage/foster home kid. I was hard core bluecollar lunchbucket. Think - the old William Bendix TV series 'The Life of Riley' - except in a lumbermill. Depression Era parents who thought stocks were poison.

Learned everything from the Public library and school of hard knocks - as to investing. Over thirty years made about every mistake in the book. Except perhaps commoditity futures.
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 05:53 AM   #35
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Re: Any middle class ER wannabe's?

Quote:
The only COLA in our future is what we might mix in our rum

Here is a slightly different angle on this
"middle class ER wannabe" thing. I know what makes me tick, ER-wise and otherwise. And, got a pretty good
handle on DW after 4 years together. The point is,
do any of you couples have extremely diverse economic
backgrounds? We do. I grew up comfortably
middle class. My spouse grew up dirt poor. She and her sister were talking about how they both tend to overbuy and hoard stuff (clothes, food etc). It's an obvious result of having grown up with pretty much nothing. Anyway,
meshing different lifestyles from the past can be a trick
no matter how you do it.

JG
I grew up the son of a fairly prototypical "Millionaire Next Door" -- actually my dad was a doctor but he fortunately didn't live up to the doctor image of driving a fancy car and making dumb investments. My mother is of Scottish extraction; one of her famous (to me) quotes was "Like my outfit? I bought it all for less than a dollar at a garage sale!" (I still wonder to this day if that included her foundation wear. I hope not.) I tend to want to be frugal most of the time but will splurge and be irresponsible with money sometimes.

My wife grew up a PK whose mother married for love, but her maternal lineage going back several generations has often wanted and tried to have the finer things in life regardless of their actual financial situation. My wife, after 14 years being married to me is an interesting mix of frugal and spendthrift.

Overall I would say I have tended to be the more frugal and my wife tended to be the spender, but in recent years we have actually become more moderate. I will tend to spend more and she has tended to spend less. I'm not sure why but it's probably healthy in our case.

malakito
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 06:06 AM   #36
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Re: Any middle class ER wannabe's?

I just thought of this. My parent's background was
similar to ours, i.e. my Dad grew up very poor
but my mother was solid middle class. Both went
through the Depression though and so they don't spend much. That's good because both are
quite unsophisticated about finances in general.

JG
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 06:23 AM   #37
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Re: Any middle class ER wannabe's?

Thanks uncledrz!! But as many people have noted on the thread the corporate pension is crap compared to the good old days. Trying to consider all factors when I get outta school and bounce around from job to job. I was puzzled why so many people supported making a jump after 3-5 yrs with pension issues. I suppose most think they can do well w/o and would rather find a job with opportunities.
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 07:18 AM   #38
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Re: Any middle class ER wannabe's?

The pension issue is real for me. I think I could make 10-20k more if I jumped, but if I stay on 3 more years (for 5 total) I qualify for the pension. They even have an online calculator that shows you what you'd get in today's dollars. IF I survive that long, it would be hundreds of thousands I would walk away from if I left before then. Then again, if the next company had a pension.....
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 08:02 AM   #39
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Re: Any middle class ER wannabe's?

"My wife grew up a PK" Huh? Walther? PPK?
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Re: Any middle class ER wannabe's?
Old 03-31-2005, 08:09 AM   #40
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Re: Any middle class ER wannabe's?

"PK"? I thought it was "Princess, Kosher".
Or maybe not?

JG
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