FIRE Plans - Confident Or Second thoughts given US Economics

[FinanceDude]

For the rest of the board... anyone who wants a COLA pension can buy an annuity with the same features, and it's probably just as survivable as Spanky's scenario. You can get it without volunteering to be shot at, too.

Funny post, Nords.............

 

[W2R]

Congrats to those with COLA pensions that are sufficient to support their living without having to worry about the economy or the stock market. Let's suppose in the unlikely event that the pension providers (even the government) announce that they would default their obligations because of a severe recession, would you change your perspective about the economy or the stock market. You probably would say that such an event will never, never, never happen. However, this is only a hypothetical question.

I think that the most rational approach for all of us (even those of us who expect federal COLA pensions, like me) is to diversify - - not just in asset allocation, but diversify the sources of our income streams.

Pension, social security, retirement accounts, taxable accounts, CD's, fixed lifetime annuity - - I know that I will have seven such sources of income, so if my federal pension disappeared it would not be a show-stopper. To me, anyone who relies only upon a pension is quite the optimist.

Notice that all of the above except the retirement accounts and taxable accounts are independent of the stock market to at least some extent, and sometimes completely. So is my (paid off) house, the vegetable garden that I plan to keep at my retirement location, and so on.

I am constantly on the lookout for other sources of income (besides w*rk!) that might appeal to me.

 

[bosco]

I ER'd July 6, 2007. Since them, the Canadian dollar has spiked which directly lowers my disposable income. I had planned for a US dollar drop, but not quite so quickly.

Bottom line: no regrets. I'd far rather have a little less money and a LOT more freedom. Who cares what the economy is going to do? We know it will go up, it will go down. What's the point of ER if you are going to sit around and worry about the economy? That's too much like a j*b....

 

[Alan]

The state of the economy doesn't change my FIRE plans in 29 months. I am balanced and diversified in my portfolio and income streams. I have a pension due in the US March 2010, 2 pensions in the UK (drawing one now, 2nd one starts 2020), plus SS both here and in the UK. None of the pensions are COLA and the sum of the pensions doesn't cover my needs, so I need the savings to meet all my goals.

If my pensions were actually lump sum equivalents I don't believe I would annuitize anything - I believe I am disciplined enough to manage the investments myself.