For the anti-defined benefit people...

[daylatedollarshort]

Quote:

Originally Posted by Walt34 At the other extreme we have the pizza delivery driver who is on track to pull off ER. I don't know what explains the difference in behavior.

Delayed gratification - the most important factor for success?

https://www.youtube.com/watch?v=Z7UUfrnnbb8

I do think maybe some of it might be hard wired.

[Mulligan]

Quote:

Originally Posted by MichaelB +1 Note - the link is to a Yahoo Money web page titled "5 secrets to a happy retirement" They are: Create a predictable paycheck Stick with what you know Find four hobbies Rent late in life Keep your kids at arm’s length. I think the thread title has little to do with the linked article.

Money mag had this article or a very similar one this month. Couple of survey points I thought were humorous. 1) People who had travel or golf as one of their hobbies were happier than ones whose main hobbies were reading, hunting, or fishing. They implied they were isolating hobbies and not as inclined to leading a happy life. 2) Having or not having children had no impact on happiness, but having children living within 10 miles of personal residence did lead to an unhappier one. They speculated forced babysitting.
Pretty funny stuff... So don't live near kids and if you continue to hunt or fish be prepared to take Zoloft!


Sent from my iPad using Tapatalk

[razztazz]

Quote:

2) Having or not having children had no impact on happiness, but having children living within 10 miles of personal residence did lead to an unhappier one.

George Burns once said Happiness is having a large, loving, caring, close-knit family in another city.

[ERhoosier]

I think these DB vs DC arguments are rather pointless. Either can be good or bad depending on specifics. Would you rather have a tiny DB from a bankrupt ex-employer or $5Mil in your personal 401K?

[clifp]

Quote:

Originally Posted by Big_Hitter in hindsight I guess I should have said "it's very difficult to retire anxiety-free without one"

The Detroit autoshow is going on right now. I bet 20 or so years ago, plenty of workers (both city and Big 3) retired mostly anxiety-free. I'd say they've all had plenty of anxiety this century if they were solely dependent on their pensions. So a DB plan doesn't actually give you a worry free retirement, only the illusion.

I wish in Q4/08 and Q1/09 that I had a DB. It was scary to be in 50 with out of date skills and no job, and it would be downright terrifying if I don't have plenty of fat in my budget.

However, the same financial crash that threaten my retirement would have resulted inDetroit like cutbacks in probably 75% of the state, local, and corporate pensions in the country if the market hadn't comeback.

[pb4uski]

Yes, and BIL's bro is a retired Detroit detective..... I don't think his DB has made him free of anxiety.

[Chuckanut]

Detroit workers were also not part of SS, IIRC. So they are even more dependent on their pension than many others.

[34rlsa]

How does the risk of a government or mega corp DB plan failing compare to the risk of a portfolio failing in major market crash? Either scenario is possible... if you're a worrier does it really make much difference which way your ER plan is structured.

There is always risk. The zombies won't care how your ER is funded.

[scrabbler1]

Quote:

Originally Posted by audreyh1 We have a monthly "paycheck" simply by depositing the annual portfolio withdrawal in a high yield savings account, and then having $X amount, enough to cover general expenses, deposited to our bank checking account each month.

My ER plan included as a monthly income stream the monthly dividend paid out by the big bond fund I have nearly half a million dollars in. The bond fund includes bonds at the low end of investment grade and the high end of just under investment grade. The monthly dividend has dropped a bit in the last 6 years but I have greatly increased the number of shares in the fund to offset the decline in DPS. The annualized dividend yield is about 4.5%.

Last year, as a supplement to the monthly cash dividend, I began taking the quarterly stock fund dividend in cash instead of reinvesting it. The quarterly dividends pretty much coincide with the quarterly spikes in my expenses but I still have cash left over which I reinvest elsewhere. This was always anticipated as a possible change to my ER plan.

[scrabbler1]

Quote:

Originally Posted by pb4uski Which is part of the point that many of us are making, that we are comfortable with risk so are not at all anxious about retiring without a defined benefit pension. A bird in the hand...(lump sum) is worth two in the bush (DB pension benefits). That's just the reality of today. And even define benefit pensions are not all rock-solid because of overpromising and underfunding.

As I have mentioned I other threads over the years, I have both DB and DC sources in portfolio. I often referred to them as my "reinforcements" which await my unfettered access to them when I turn ~60. For example, besides SS I have a frozen company pension, a pension I hope is now on more stable grounds (not that I thought it was in any real danger) after it became frozen in 2001 when I was still working for MegaCorp. In its place is a Cash Balance plan which is a hybrid of DB and DC plans. It isn't worth anywhere near as much as the frozen pension but I can take it as a lump sum or as an annuity. Just a few days ago I asked reps from the plan administrator to find out what kind of payout options including early ones (i.e. before I turn 59.5) are available in case I need some extra money before I turn 60. Those options are okay but not great, a Plan B or Plan C, perhaps.

[ERD50]

Quote:

Originally Posted by 34rlsa How does the risk of a government or mega corp DB plan failing compare to the risk of a portfolio failing in major market crash? Either scenario is possible... if you're a worrier does it really make much difference which way your ER plan is structured. There is always risk. The zombies won't care how your ER is funded.

Well, a ~ 3% inflation adjusted WR has survived every market crash of the past, including the Great Depression, and the inflationary 80's. And that is without even making any downward adjustments.

Yes, there is risk in everything, including DB pensions (though currently covered by PBGC up to the cap).

-ERD50

[Helen]

Thanks for posting the link to this article, OP. I sent the link to someone who is in the beginning stages of deciding whether to cash in his pension or not.

[Hermit]

Quote:

Originally Posted by Mulligan Money mag had this article or a very similar one this month. Couple of survey points I thought were humorous. 1) People who had travel or golf as one of their hobbies were happier than ones whose main hobbies were reading, hunting, or fishing. They implied they were isolating hobbies and not as inclined to leading a happy life. 2) Having or not having children had no impact on happiness, but having children living within 10 miles of personal residence did lead to an unhappier one. They speculated forced babysitting. Pretty funny stuff... So don't live near kids and if you continue to hunt or fish be prepared to take Zoloft! Sent from my iPad using Tapatalk

Wow. I didn't know... I must be very sad!

[haha]

Quote:

Originally Posted by Big_Hitter in hindsight I guess I should have said "it's very difficult to retire anxiety-free without one"

What is very difficult for me is to guess what personal need you are trying to stroke with this post that seems so silly to so many of us, sitting here retired for years, who did not have a defined benefit pension. How do you think small business owners retired and continue to retire? Who gives them their defined benefit plan?

Ha

[daylatedollarshort]

Here is a link from Vanguard on the sources of retirement income for wealthier retirees. Pension income only accounts for 20% on average:

https://institutional.vanguard.com/i...ceDomain=false

[Big_Hitter]

^ no surprise - they can afford to retire without a DB plan

[Big_Hitter]

Quote:

Originally Posted by haha What is very difficult for me is to guess what personal need you are trying to stroke with this post that seems so silly to so many of us, sitting here retired for years, who did not have a defined benefit pension. How do you think small business owners retired and continue to retire? Who gives them their defined benefit plan? Ha

nothing, thanks for your input

small business owners typically sell and retire on the profit, or they establish substantial owner DB plans and sock it away

[2B]

Quote:

Originally Posted by Big_Hitter ^ no surprise - they can afford to retire without a DB plan

We all can. It just comes down to making the right decisions.

[Big_Hitter]

of course you can - it's just more difficult, especially if you are in the bottom quartile income wise

[daylatedollarshort]

Quote:

Originally Posted by Big_Hitter ^ no surprise - they can afford to retire without a DB plan

A similar AARP survey says that Social Security accounts for about 4 / 5 dollars of income for older Americans with low to moderate incomes. I don't see any group in either survey living largely on pension income.

http://www.aarp.org/content/dam/aarp...i-econ-sec.pdf