Pension or Portfolio ?

[BTravlin]

Quote:

Originally Posted by dex The pensioners are people (and can vote) and are given automatic 'victim' status. While businesses (stocks/bonds) are automatically given 'evil' status so tax, regulate them.

Just because I'm not a pensioner I can no longer vote? Should have made that part of the question.

[Purron]

Quote:

Originally Posted by Animorph Portfolio. They both work about the same during retirement but the pension has no value at the end. The portfolio would most likely be worth more than $2M in today's dollars when you are done with it. I'm happy with the risk, which is really not much with a diversified portfolio and the ability to reduce spending if necessary. Also, the pension has no flexibility for major expenses (new car, new roof, medical bills...) unless they occur later in retirement after you've been saving up.

I selected portfolio for the same reasons Animorph did, particularly the flexibility.

[Rustic23]

I vote with Nords. It seems the best solution. You get the annuity/security, and you have the cash to grow or blow. So taking the cash appears to be the answer that wants it split.

[keegs]

Quote:

Originally Posted by dex From the standpoint of control,I think the Government's control - tax, regulation - and public's willingness to demonize business is a greater threat to investors than pensioners. The pensioners are people (and can vote) and are given automatic 'victim' status. While businesses (stocks/bonds) are automatically given 'evil' status so tax, regulate them.

Public pensions are under enormous political and economic pressure in large measure because wall street blew up the public pension funds along with the global econmy for reasons that can only be characterized as greed and ignorance.

The governor of new jersey recently characterized our public school teachers as drug dealers.

The notion that public pensioners have been characterized as victims is absurd.

[BTravlin]

Quote:

Originally Posted by keegs The notion that public pensioners have been characterized as victims is absurd.

Yes, lately they're more likely to be described as blood sucking leeches.

[samclem]

Quote:

Originally Posted by Moemg A point I had not considered but if you take the 2 million and get divorced or sued you lose a lot of it but with the pension your money is safer .

Maybe not. If it's a military pension and you were married for at least 10 years of your service time, spouse automatically gets a pro-rated amount (starting at 50%). Doesn't matter why the divorce occurred, etc. It's the law--thank you Congressman Schroeder.

[harley]

Taking into account a number of the comments regarding gov't stability and control, divorce or legal issues, and others, I'd still take the cash. If things here become toocontrolling or business unfriendly (which I don't believe will happen due to the golden rule - he who has the gold makes the rules), I can pick up my cash (by then invested in easily transportable gold and gemstones) and head for Costa Rica or some other safer haven. If the gov't controls my pension they can always reel me back in.

[keegs]

Quote:

Originally Posted by harley Taking into account a number of the comments regarding gov't stability and control, divorce or legal issues, and others, I'd still take the cash. If things here become toocontrolling or business unfriendly (which I don't believe will happen due to the golden rule - he who has the gold makes the rules), I can pick up my cash (by then invested in easily transportable gold and gemstones) and head for Costa Rica or some other safer haven. If the gov't controls my pension they can always reel me back in.

That depends Harley. The guys will the gold didn't do too well after 1929.

If you consider greed as a guide, given the parallels with the distribution of income then and now, I wouldn't be too quick to rule out history repeating itself.

[harley]

Quote:

Originally Posted by keegs That depends Harley. The guys will the gold didn't do too well after 1929. If you consider greed as a guide, given the parallels with the distribution of income then and now, I wouldn't be too quick to rule out history repeating itself.

They did a hell of a lot better than the guys without the gold. The stories of all the rich guys jumping out of windows after the Crash are greatly exaggerated. I have to stick with the cash.

[keegs]

Quote:

Originally Posted by harley They did a hell of a lot better than the guys without the gold. The stories of all the rich guys jumping out of windows after the Crash are greatly exaggerated. I have to stick with the cash.

Well if you consider income distribution over the period, their share dropped substantially.

What always gets lost in the popular supply side argument is that with a shrinking middle class you don't create requisite demand.

Those with the gold should know this and also that a smaller piece of a growing pie is better than a larger piece of a shrinking pie.

[FIREd]

Ideally, I'd pick the $1M portfolio with the $40K pension...

But since it's not a choice, I'll take the cash...

[haha]

Quote:

Originally Posted by Moemg A point I had not considered but if you take the 2 million and get divorced or sued you lose a lot of it but with the pension your money is safer .

Don't you generally lose half or more of that too, unless spouse has an equal pension? Unless this pension is like SS, where the ex-spouse's take does not diminish the chief bread winner's.

Ha

[NW-Bound]

A former coworker of mine at a megacorp went through a divorce. He had to split his 401K and also his pension. The problem is to put a present value on that pension. It's pension to be actually, as he is not yet eligible. The company would not give him a number. So, he had to find someone like an accountant to come up with something acceptable. Messy, messy...

[Meadbh]

Maybe I have been reading too much about retirement risk. Given the stated choices, I would take the pension.

But of course I would just love to have the $2m to play with!

[NW-Bound]

Quote:

Originally Posted by Meadbh But of course I would just love to have the $2m to play with!

...which of course you do already.

[Moemg]

Quote:

Originally Posted by haha Don't you generally lose half or more of that too, unless spouse has an equal pension? Unless this pension is like SS, where the ex-spouse's take does not diminish the chief bread winner's. Ha

I think it depends on how long you were married and probably the assets you are willing to trade for the pension . I'm sure one of the lawyers on the board know the answer .

[Meadbh]

Quote:

Originally Posted by NW-Bound ...which of course you do already.

Yes, but I will never have the pension!

Which is why, someday I may use some of it to do this:

http://www.qwema.ca/pensionize.htm

[kcowan]

I took the portfolio 8 years ago. I would not trust the federal government to do a proper COLA. Either one would be exposed equally in a divorce.

[Tigger]

I'd take the pension if I'd trust the government to keep its promises (I don't, so I take the $2M, thank you).

But here's an important question: is this person someone capable of prudent spending and investing? If he/she might overspend or invest unwisely, the pension might be the better option.

[FIRE'd@51]

I voted for the portfolio.

I must say, I'm surprised by the amount of risk-aversion that is present on a forum of ERs and ER wannabes. Guess that's what 10 years of a lousy stock market can do to people. I'll bet that 10 years ago, the portfolio would have won "hands down".