Is Everyone a Multi-Millionaire?

[Meadbh]

I don't think that Meadbh's comment was harsh at all. Planning for ER knowing that there will be no pension whatsoever is a totally different animal compared to ER with a pension, and entails greater risk. Americans seeking to ER without a pension typically have to plan for purchasing health insurance, as well. Many (most?) Americans who will get a pension qualify for subsidized health insurance when they retire.

People with pensions don't necessarily earn less pre-retirement, and they typically have FAR more job security than non-pension careers.

Thank you!

 

[scrinch]

I've been wondering whether it's possible that such an old microwave could be leaking radiation, and it might be better for me to ditch it and get a new one anyway.

It's a Kenmore. I'm not sure if that is still a trusted brand, but my microwave certainly doesn't owe me anything.

I had my grandmother's 1980's vintage Kenmore microwave oven up to a few years ago. One evening I reached up to open the door with my left hand. I heard a funny pop noise from the watch on my left wrist, and when I looked, it had been reset to 00:00:00. The watch continued to run and so I just reset it, but I stood clear of the microwave after that, and replaced it as soon as I had a chance!

 

[Mulligan]

I don't think that Meadbh's comment was harsh at all. Planning for ER knowing that there will be no pension whatsoever is a totally different animal compared to ER with a pension, and entails greater risk. Americans seeking to ER without a pension typically have to plan for purchasing health insurance, as well. Many (most?) Americans who will get a pension qualify for subsidized health insurance when they retire.

People with pensions don't necessarily earn less pre-retirement, and they typically have FAR more job security than non-pension careers.

As a pensioner, I find no fault in your line of thinking (though I get no healthcare benes). In fact for the public in general who have good pensions, the greatest benefit of a pension is it saves yourself, from yourself, which thus insures a lifetime stream of income. Most people on here do not need that. But most of my friends have or will have pensions. And without that backstop they wouldn't have anything I am sure. I would still be working too, as I have made many poor financial choices also, and doubt seriously I could have "stayed the course" my whole working career. But on the other hand, I have no real legacy to pass on when I go, because the pension income goes too.


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[Moemg]

As a pensioner, I find no fault in your line of thinking (though I get no healthcare benes). In fact for the public in general who have good pensions, the greatest benefit of a pension is it saves yourself, from yourself, which thus insures a lifetime stream of income.

A Pension also saves you from the whims of the stock market . Luckily I had a pension when the stock market dropped in 2008 . It saved my sanity .I consider my pension & SS my safety net .

 

[Meadbh]

A Pension also saves you from the whims of the stock market . Luckily I had a pension when the stock market dropped in 2008 . It saved my sanity .I consider my pension & SS my safety net .

Meanwhile, the pension fund managers were very worried, because they shouldered the risk. The difference between people with and without pensioners is that pensioners are shielded from market risk as long as the pension plan remains solvent, whereas non-pensioners undertake that risk individually. The sequence of returns risk cannot be unloaded onto future liabilities, nor can contributions be increased. Non-pensioners have only one chance to get it right.

 

[Mulligan]

A Pension also saves you from the whims of the stock market . Luckily I had a pension when the stock market dropped in 2008 . It saved my sanity .I consider my pension & SS my safety net .

That is true, and that is probably the counterbalance to the "negative" of the pension dying when recipient dies. The 2008 crash dropped my pension fund from around 29 billion or so down to 18 Billion. Since the money is pooled and is continually bringing money into the system no one is effected short term. Fortunately it recovered quickly and is now near 40 billion.


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[ziggy29]

Meanwhile, the pension fund managers were very worried, because they shouldered the risk. The difference between people with and without pensioners is that pensioners are shielded from market risk as long as the pension plan remains solvent, whereas non-pensioners undertake that risk individually. The sequence of returns risk cannot be unloaded onto future liabilities, nor can contributions be increased. Non-pensioners have only one chance to get it right.

While I think some pension plans overpromised based on unrealistic projections on investment returns, there are certainly more prudent plans that have not done so and are likely to remain pretty solvent. (In a collective bargaining situation, it's easier for management to promise larger future pensions than give current raises.)

It's a shame the "three legged stool" approach isn't spreading. It seems many folks have to shoulder all the risk through their own investments, or limit their upside (and put risk on others) through substantial pensions. I know feds working under FERS have a three-legged stool, but not many others do except for folks who have had their pension plans frozen and now only get 401Ks.

 

[Mulligan]

Meanwhile, the pension fund managers were very worried, because they shouldered the risk. The difference between people with and without pensioners is that pensioners are shielded from market risk as long as the pension plan remains solvent, whereas non-pensioners undertake that risk individually. The sequence of returns risk cannot be unloaded onto future liabilities, nor can contributions be increased. Non-pensioners have only one chance to get it right.

That is the key benefit in a nutshell for my pension. As it is a trust and has no pension guarantee backstop. But that in itself is very valuable. What if I had my own stash with no pension and sold at the bottom in 2008, because I could not risk losing anymore? The pension does not provide me the opportunity to panic and do the wrong thing at the wrong time.


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[NW-Bound]

Sea Kayaker and NW Bound, DH and I bought waterfront property on Whidbey Island in the early 90s for our future retirement home (saved for it and paid cash). We held on to the property and finally built a 1700' 2BR/2B home via UBuildIt program about 7 years ago without a mortgage. We spend our weekends and vacation time on the island and I will be living on the island full time after 8/1 (DH will join 6/16). Our property is on stable midbank bluff, but we have water/boat slip access just down the road. We have a beautiful view of Camano Island and Mt. Baker. I have a nice size garden area for vegetables and flowers and we kept the small old cabin for our tool/garden shed. I do crab using my kayak using a small ring trap. Allows me to putz and enjoy the sea life. Also good clamming and mussels from our tidelands. The house was designed and built with a water view from every room (except 2nd bath and laundry room) for those stormy winter days

Truly our dream realized. NW Bound, I say go for it!!!!

Looks like you have found your little corner of paradise. Congrats.

As for me, I dunno. I should stop looking at Zillow until my net worth reaches $5M, which may never happen as the market may just crash again. Or when it happens I am so old I stop caring about this. And then, house prices will go up too. During the Great Recession, I saw some nice waterfront properties on Bainbridge going for around $1M, and they are all higher now.

Anyway, why am I still thinking about this? Am I the fabled dog who dropped the bone in its mouth to get that one reflected in the water? My high country home is on a ridge and higher than anybody within a 1/2 mile radius. I am king of the hill and look down on my neighbors from my 700-sq.ft. deck. I should be happy with what I have. And I already see that one big obstacle with moving is that we will be leaving my children and our extended family behind.

So, no more Zillow surfing until that sack of money falls out of the sky, so that I can buy that expensive home. I should be spending more time to look for places to visit on my upcoming cross-country RV trip of 9,000 miles.

 

[GTFan]

37K =
28k HI premium + OOP max per ACA with zero subsidy
6k Income Tax
3k Property tax

$28k is still an insane amount to budget for a Bronze plan, IMO. Around here I can get one for two people for around $650 a month, and max OOP is $12,700 for the family. So it's a lot closer to $20k than $28k, and that assumes the worst case where both of you max out HC expenses.

Of course this doesn't include vision/dental, but I can't see how that would be anywhere near another $8k a year.

 

[fh2000]

I don't think that Meadbh's comment was harsh at all. Planning for ER knowing that there will be no pension whatsoever is a totally different animal compared to ER with a pension, and entails greater risk. Americans seeking to ER without a pension typically have to plan for purchasing health insurance, as well. Many (most?) Americans who will get a pension qualify for subsidized health insurance when they retire.

People with pensions don't necessarily earn less pre-retirement, and they typically have FAR more job security than non-pension careers.

During the dot com era, I chose to give up a pensioned job with an utility company, and went to pursue a series of dot com companies. Many of my old colleagues are still with the utility company and will enjoy their pension.

I sometimes thought about the security that I gave up, but I do not regret taking the risk since that choice opened up other doors for me and I can see them in my savings.

 

[Live And Learn]

$28k is still an insane amount to budget for a Bronze plan, IMO. Around here I can get one for two people for around $650 a month, and max OOP is $12,700 for the family. So it's a lot closer to $20k than $28k, and that assumes the worst case where both of you max out HC expenses.

Of course this doesn't include vision/dental, but I can't see how that would be anywhere near another $8k a year.

I agree that its an insane amount of money but it is what it is. Premiums of $997 / month and 12.6 OOP max = $24.6k Medical. Eyecare is $500 / person / year. Dental is $500 / person / year. At most I'm overstated by 1k.

Anything I don't spend for medical will go into the travel fund the following year.

 

[pb4uski]

I agree that its an insane amount of money but it is what it is. Premiums of $997 / month and 12.6 OOP max = $24.6k Medical. Eyecare is $500 / person / year. Dental is $500 / person / year. At most I'm overstated by 1k.

Anything I don't spend for medical will go into the travel fund the following year.

Unless you have significant vision/dental issues, wouldn't you be better off to go without insurance for those? We don't have significant vision/dental issues and spend far less than that for the services we need.

As an aside, if the lowest cost bronze plan exceeds 8% of your MAGI you can buy catastrophic coverage, which is often significantly less premium. My catastrophic max is only $100 more than your $12.6 OOP max.

 

[meierlde]

I did a walk in San Francisco across Presidio Heights over to Land's End, passing "mansions" with great views of the bay and Golden Gate Bridge.

These properties go up to almost $20 million.

Now can the novelty of that view wear off? Does it lead to greater happiness than a home without sea views?

People who own these kind of properties are likely to own other prime properties in places like Hawaii.

I remember in Sydney, there were apts overlooking the harbor and the most expensive of them were said to be worth tens of millions. Honestly, I thought the homes to the NE of the harbor looked more appealing, overlooking a less busy part of the whole bay there. But presumably that view of the bridge and the Opera House was the "in" thing, a great or indicator of status.

Of course now days you can get large screen TV's and set them up as if they were windows, and have a room that looks like its On the ocean on one side, and say at Mt Ranier on the other (with never a cloudy day to boot), or set them up to use web cams and have live views. Of course that is also more energy efficient since windows leak more heat than walls. (Plus or minus the need for emergency egress thru the windows).

 

[explanade]

They describe various display technologies as producing a window-like effect.

Exotic ones like large OLED displays are being developed but would cost about $10k and would have some burn-in susceptibility.

Guess still cheaper than buying some of these properties.

 

[meierlde]

They describe various display technologies as producing a window-like effect.

Exotic ones like large OLED displays are being developed but would cost about $10k and would have some burn-in susceptibility.

Guess still cheaper than buying some of these properties.

And you can think you live on the seashore one day and the mountains the next, without owning two homes.

 

[Gumby]

And you can think you live on the seashore one day and the mountains the next, without owning two homes.

I commend to your reading the short story Light of Other Days by Bob Shaw.

 

[Meadbh]

And you can think you live on the seashore one day and the mountains the next, without owning two homes.

.......which partly explains why property in Vancouver is insanely expensive.

 

[calmloki]

I commend to your reading the short story Light of Other Days by Bob Shaw.

And then there is Lene Hau, arguably on her way to making slow glass (or such is my fantasy). http://www.physicscentral.com/explore/people/hau.cfm

 

[daylatedollarshort]

I did a walk in San Francisco across Presidio Heights over to Land's End, passing "mansions" with great views of the bay and Golden Gate Bridge.

These properties go up to almost $20 million.

Now can the novelty of that view wear off? Does it lead to greater happiness than a home without sea views?

People who own these kind of properties are likely to own other prime properties in places like Hawaii.

I remember in Sydney, there were apts overlooking the harbor and the most expensive of them were said to be worth tens of millions. Honestly, I thought the homes to the NE of the harbor looked more appealing, overlooking a less busy part of the whole bay there. But presumably that view of the bridge and the Opera House was the "in" thing, a great or indicator of status.

Someone pointed out Robin William's house to me on a walk through Sea Cliff last year. Or as you say probably one of his houses. I just read he is broke and in rehab, so I don't think his houses or his money necessarily brought him any extra happiness over the average person, maybe even less.

 

[explanade]

Actually we passed by what is supposedly a house he gave to an ex wife.

Houses weren't that striking from the outside, though there was a replica of the Petit Trianon from Versailles.

Considering what they cost, the lots seemed small.

 

[gregory r.]

I think the general population on this site have a specific goal of FIRE in mind and have been working towards it for some time. If so, those principals of living below your means and saving/investing wisely would certainly equate to higher net worth, excluding home equity, vacation condo's, etc. It's a lifestyle

 

[Live And Learn]

Unless you have significant vision/dental issues, wouldn't you be better off to go without insurance for those? We don't have significant vision/dental issues and spend far less than that for the services we need.

As an aside, if the lowest cost bronze plan exceeds 8% of your MAGI you can buy catastrophic coverage, which is often significantly less premium. My catastrophic max is only $100 more than your $12.6 OOP max.

Thanks. My eyecare and dental estimates were for OOP (no insurance). Both DH and I wear glasses / contacts. Dental is currently just cleanings, but one cap will easily exceed the $1k budget per person. As we all know, I like to overestimate to quell my nervous-nelly-belly.

For HI, I'm using ACA numbers as an estimate only and I'm not including any potential subsidies. Thanks for the heads up on the catastrophic plans. I'll look into that.

 

[daylatedollarshort]

Thanks. My eyecare and dental estimates were for OOP (no insurance). Both DH and I wear glasses / contacts. Dental is currently just cleanings, but one cap will easily exceed the $1k budget per person. As we all know, I like to overestimate to quell my nervous-nelly-belly.

For HI, I'm using ACA numbers as an estimate only and I'm not including any potential subsidies. Thanks for the heads up on the catastrophic plans. I'll look into that.

I think your numbers are reasonable for ACA unsubsidized non-catastrophic insurance. It would be the same here. The costs are what they are and the only way to lower them for us is with ACA subsidies.

For us the subsidies make downsizing and/or moving to a relatively lower cost of living area look even more financially attractive in retirement than it has been for retirees in years' past, as it would reduce our ongoing housing costs plus free up more after tax cash, making it possible to lower our taxable income / O-MAGI and pay $2 a month per person for an HSA Bronze plan. We don't go to the doctor much most years, so with a bit of luck and maybe some extra veggies we'd just have the teeth cleanings and eye exams to pay for then until Medicare age.

 

[papadad111]

$2m goes a lot father in some areas than others and some people with that kind of NW may be used to living on much more than $108K.

Where do you get that quote for an immediate annuity. That's better than 5% and i dont think the annuity pays out that much for a 50 year old.