Poll:What are your sources of retirement income?

[W2R]

Quote:

Originally Posted by nun So the poll results imply that most people considering ER have defined benefit pension plans. Of course that has to be convolved with the fact that the demographic on here is probably biased to 50 and above and DB plans were a lot more common during their careers than they are now......also if i asked the same question 50 years from now no one would have a DB plan, but would the number of people considering ER have fallen dramatically because of the death of the DB pension? Does the zeitgeist of ever increasing retirement age suggest that this ER forum will end up with very few members.......

It has been tough for early retirees at various times in my lifetime, IMO, for various reasons. Can you imagine retiring early during the crazy, seemingly out of control and endless inflation of the 1980's? I think that would have taken more guts than I can summon. I have great respect for anyone who managed to retire at that time, just as I have for our present members who had their expected pensions frozen or yanked just before they qualified for them, and others too who have had monumental obstacles of all sorts to overcome. Early retirement is not any easy path to follow.

[rescueme]

Quote:

Originally Posted by W2R Early retirement is not any easy path to follow.

Heck, that's why I have hair on my breasts ...

[ziggy29]

Quote:

Originally Posted by jclarksnakes Very interesting results. Based on what I read on this forum I would have thought there would not be so many private company DB pensions.

I suspect for those who are much younger (mostly under 40, I'd say) there will be far fewer. I was just old enough to get in with 11+ years of service before they froze the pension. I doubt $650 a month will buy much in 2030 when I turn 65 (and it *will* be $650 regardless of inflation, no adjustments), but you never know. If it buys even half as much as it does today, the economy will probably be in trouble for a long time...

It also looks like a considerable number of those who have private sector DB pensions were around long enough to either be grandfathered into the plans or at least accrued enough service to get *something* when the pensions were frozen and/or eliminated for new hires.

[Lsbcal]

Quote:

Originally Posted by nun ...(snip)... Does the zeitgeist of ever increasing retirement age suggest that this ER forum will end up with very few members.......

Could be there will be ever increasing FIRE wannabe's.

[Lsbcal]

Quote:

Originally Posted by W2R It has been tough for early retirees at various times in my lifetime, IMO, for various reasons. Can you imagine retiring early during the crazy, seemingly out of control and endless inflation of the 1980's? I think that would have taken more guts than I can summon. I have great respect for anyone who managed to retire at that time, just as I have for our present members who had their expected pensions frozen or yanked just before they qualified for them, and others too who have had monumental obstacles of all sorts to overcome. Early retirement is not any easy path to follow.

A minor point, I think you mean the 1970's W2R. The 1980's were characterized by a great stock market and real bond rates that we will probably never see again. Plus rates were coming down making for bond capital gains. Actually the good times started in late 1982.

[Chuckanut]

The poll needs an option for a 'waiter' - somebody who is waiting for a wealthy realtive to die and leave them an inheritence.

[rescueme]

Quote:

Originally Posted by Chuckanut The poll needs an option for a 'waiter' - somebody who is waiting for a wealthy realtive to die and leave them an inheritence.

Sounds more like a "wishing and hoping" kind of indivudial.

BTW, I received what I was expecting (from my parents, long gone as of this date). Nothing.

At least I planned for my future, without their "bequest" ...

[easysurfer]

I selected none of the above as the majority is from my own investments, but that wasn't one of the options listed.

[nun]

Quote:

Originally Posted by easysurfer I selected none of the above as the majority is from my own investments, but that wasn't one of the options listed.

I include the "none of the above" option to cover your situation. I was interested to see the proportion of people who have DB plans and of what type

[scrabbler1]

Nun, I interpreted the poll's question to pertain to various types of DB pensions regardless of how large they are, regardless of if they are frozen or not, regardless of if they have COLAs or not, regardless of if we are currently collecting them or not, and regardless of the portion they are (or will be) of our total retirement income. I suppose this is why I am surprised at how many answered "none of the above" but to each his own.

[Mulligan]

Quote:

Originally Posted by nun In MA state workers make 9% (or 11% if they earn over $35k) mandatory contributions to the state pension plan. MA kicks in 5%. Medicare tax is also taken out of the paycheck, but not SS tax, so MA state worked do not receive federal SS when they retire.

Same boat, I had between 11%-14% contributions which was matched by employer, no SS. But because I amassed 15 plus years working in PT SS jobs, I will get about $100 a month at 62 in 14 more years (the WEP gave it a helluva haircut). Current pension provides about 120% on my income needs as I have become a professional "saver" now in retirement.

[W2R]

Quote:

Originally Posted by Lsbcal A minor point, I think you mean the 1970's W2R. The 1980's were characterized by a great stock market and real bond rates that we will probably never see again. Plus rates were coming down making for bond capital gains. Actually the good times started in late 1982.

Yes, it is minor, but still a good point to discuss.

Quote:

the great inflation of the 1970s, which began in late 1972 and didn't end until the early 1980s.

http://www.investopedia.com/articles...#ixzz1xJfk7aQS Someone retiring in the early 1980's would have experienced a longer period of inflation than someone retiring in the early 1970's, seemingly endless inflation by that time, so that sounds pretty scary to me and that was what I was saying. Which is not saying that retiring in the 1970's would have been a piece of cake either! In a way, your point supplements what I was saying by providing an additional example of a time in which it took a lot of guts to dare to ER.

[Mulligan]

Quote:

Originally Posted by W2R Yes, it is minor, but still a good point to discuss. http://www.investopedia.com/articles...#ixzz1xJfk7aQS Someone retiring in the early 1980's would have experienced a longer period of inflation than someone retiring in the early 1970's, seemingly endless inflation by that time, so that sounds pretty scary to me and that was what I was saying. Which is not saying that retiring in the 1970's would have been a piece of cake either! In a way, your point supplements what I was saying by providing an additional example of a time in which it took a lot of guts to dare to ER.

Just having a little fun with this, not criticizing or anything, but if I had a self sustaining nest egg, and was a very conservative investor, I would think that the 80s were the perfect decade for retirement. Double digit inflation was broke, but CDs and govt. bonds stayed stubborningly high, above the CPI. Kind of the opposite of today in a way.

[W2R]

Quote:

Originally Posted by W2R It has been tough for early retirees at various times in my lifetime, IMO, for various reasons. Can you imagine retiring early during the crazy, seemingly out of control and endless inflation of the 1980's? I think that would have taken more guts than I can summon. I have great respect for anyone who managed to retire at that time, just as I have for our present members who had their expected pensions frozen or yanked just before they qualified for them, and others too who have had monumental obstacles of all sorts to overcome. Early retirement is not any easy path to follow.

Quote:

Originally Posted by Mulligan Just having a little fun with this, not criticizing or anything, but if I had a self sustaining nest egg, and was a very conservative investor, I would think that the 80s were the perfect decade for retirement. Double digit inflation was broke, but CDs and govt. bonds stayed stubborningly high, above the CPI. Kind of the opposite of today in a way.

That is a very good point. I think the 90's would have been terrific, too. However the point of my post kind of got lost in thread drift, I suspect so I quoted it to make sure we are talking about the same things. I was talking about times during which people thinking of retiring might have been reluctant to retire, not about what actually ended up happening during their subsequent retirement, just to be clear.

I think it would have taken a lot of guts to retire in the 1980's, because a potential retiree wouldn't know the future and wouldn't know if this inflationary period was nearly over, or if inflation was just beginning to ramp up before really taking off to the moon. Granted, yields were higher at that time, but the future of our economy seemed uncertain and as in most things in life, there was no guarantee that yields would remain permanently high. Besides, by the time one gets these yields they might not be worth much if they were eaten up by runaway inflation that we kept hearing about in the media at that time. The gas lines of 1979 were still fresh in everyone's mind as well. So these are some of the reasons why I think it would have taken guts to retire in the early 1980's. YMMV but I felt a lot better about retiring in 2009 than I think I would have felt retiring in 1980-1981, for example.

[Mulligan]

Quote:

Originally Posted by W2R That is a very good point. I think the 90's would have been terrific, too. However the point of my post kind of got lost in thread drift, I suspect so I quoted it to make sure we are talking about the same things. I was talking about times during which people thinking of retiring might have been reluctant to retire, not about what actually ended up happening during their subsequent retirement. I think it would have taken a lot of guts to retire in the 1980's, because a potential retiree wouldn't know the future and wouldn't know if this inflationary period was nearly over, or if inflation was just beginning to ramp up before really taking off to the moon. Granted, yields were higher at that time, but the future of our economy seemed uncertain and as in most things in life, there was no guarantee that yields would remain permanently high. Besides, by the time one gets these yields they might not be worth much. The gas lines of 1979 were still fresh in everyone's mind as well. So these are some of the reasons why I think it would have taken guts to retire in the early 1980's. YMMV

+ 1! I think our views are shaped by our ages, too. I was young and oblivious to the 70s. I went to college in the early 80s and maxed out three straight years of student loans and rolled them into CDs. The interest alone paid for my senior year in college. So the bank and the government gave me a free year of schooling. I thought high interest rates were awesome especially since I had no loans other than the low cost subsidized student loans. Concerning today, many people ( forum members excluded) I believe are not sophisticated investors. That is why I feel sorry that this generation of retirees at present time have had the CD option in essence taken off the table for them. Many may chase yield in bonds and not understand the potential repercussions of this.

[W2R]

Quote:

Originally Posted by Mulligan Concerning today, many people ( forum members excluded) I believe are not sophisticated investors. That is why I feel sorry that this generation of retirees at present time have had the CD option in essence taken off the table for them. Many may chase yield in bonds and not understand the potential repercussions of this.

Yes, some of the investments that are asked about here are enough to curl one's hair.

I just wish my crystal ball was in better working order! Then I'd know for sure what my retirement would be like, in advance.

[Chuckanut]

Quote:

Originally Posted by W2R Which is not saying that retiring in the 1970's would have been a piece of cake either! In a way, your point supplements what I was saying by providing an additional example of a time in which it took a lot of guts to dare to ER.

Had one bought some of those 30 year Treasury Bonds yielding about 10% back then, I think ER would have been very nice indeed.

[W2R]

Quote:

Originally Posted by Chuckanut Had one bought some of those 30 year Treasury Bonds yielding about 10% back then, I think ER would have been very nice indeed.

If we all had a functioning crystal ball, then what really was to happen thoughout the years of retirement would be identical to what a potential retiree would face in making the decision to retire. But alas, that is just a fantasy. I wish it wasn't!

With high inflation rates (11.3% in 1979, 13.5% in 1980, 10.3% in 1981, for example) I would not have felt too secure with just 10% return. But in the 1970's when purchased the inflation rates were lower I think.

[JOHNNIE36]

In retrospect, things were goofy back in the 80's. I transferred to a different plant and a new job in 1980. Friend of mine had just gone to the same plant and was telling me about housing, where to buy, prices, etc. Told me he had to pay 15% to get mortgage. I found a brand new house in a new area for sale by the builder and he got me financing for 9%. I thought I'd robbed a bank. Also, we had just come off the gas lines where you could only get gas on certain days of the week, I think by license plate number. Strange times the late 70's and early 80's.

The fact that I retired in 1988 with a package to die for was unbelieveable.
I've already posted about GM doing away with the salaried retirement program. Another era passing away. No more defined benefit pensions for GM. Ford is already going that way. Pretty soon there won't be such a thing. Maybe it will get better, but I feel sorry for my grandkids. I think I'll write them a joint letter explaining how we got to where we are and what they will have to do for themselves to protect their interest for the future.

[Mulligan]

Quote:

Originally Posted by JOHNNIE36 In retrospect, things were goofy back in the 80's. I transferred to a different plant and a new job in 1980. Friend of mine had just gone to the same plant and was telling me about housing, where to buy, prices, etc. Told me he had to pay 15% to get mortgage. I found a brand new house in a new area for sale by the builder and he got me financing for 9%. I thought I'd robbed a bank. Also, we had just come off the gas lines where you could only get gas on certain days of the week, I think by license plate number. Strange times the late 70's and early 80's. The fact that I retired in 1988 with a package to die for was unbelieveable. I've already posted about GM doing away with the salaried retirement program. Another era passing away. No more defined benefit pensions for GM. Ford is already going that way. Pretty soon there won't be such a thing. Maybe it will get better, but I feel sorry for my grandkids. I think I'll write them a joint letter explaining how we got to where we are and what they will have to do for themselves to protect their interest for the future.

Johnny, as one who has survived retirement for a long time, I would be curious to how your budget expectations and income have played out for you the past 25 years. Did you have a COLA pension? Has it held up well? Did you have other levers of income you lived off of? Expenses go up appreciably? I really don't have anyone except my neighbor who retired at 58 and is now 83 that has experience in a long term retirement that I hope to have. He has a union pension from an electric company. All he said was he didnt have a "pot to piss in " when he retired, but he has more money now than he ever did in his life.