JustCurious
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Some early retirees have second thoughts
- Thread starter JustCurious
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ziggy29
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From the article (my emphasis added):
The Adamsons tried to buy individual health insurance policies but were rejected because both have high blood pressure and high cholesterol levels. They were able to get coverage through Adamson's former employer. But the premiums have risen each year, from $800 a month a few years ago to $1,300 a month now.
"We're paying close to 30% of my husband's pension" on health care, Rainee Adamson says. "It's a lot, and it goes up all the time."
--
(1300 / 30%) * 12 = 52,000.
Let me get this straight. I'm supposed to feel sorry for someone with a $52,000 pension?? I think not.
The Adamsons tried to buy individual health insurance policies but were rejected because both have high blood pressure and high cholesterol levels. They were able to get coverage through Adamson's former employer. But the premiums have risen each year, from $800 a month a few years ago to $1,300 a month now.
"We're paying close to 30% of my husband's pension" on health care, Rainee Adamson says. "It's a lot, and it goes up all the time."
--
(1300 / 30%) * 12 = 52,000.
Let me get this straight. I'm supposed to feel sorry for someone with a $52,000 pension?? I think not.
Retire Soon
Full time employment: Posting here.
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The article fails to mention the stock/bond allocation of the early retirees. Bear markets are all part of the stock market cycle and should be fully expected without surprise. I wonder if some of the people who were interviewed allocated more to stocks than what is prudent when taking their personal circumstances into consideration.
ziggy29
Moderator Emeritus
Either that or they grossly underestimated what they needed to retire comfortably with relatively conservative drawdown rates.
Or they grossly overestimated their emotional ability to ride out down markets without panicking.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
A good article for someone to read before they retire at any age, if they havent really given the matter much thought.
Obviously you need a plan that can handle big ticket items like health care (which one might want to line up before retiring rather than after), the emotional and financial preparedness to handle down markets, and the emotional/intellectual issues around disconnecting the stimulation of working life.
I'd have written this more as a "things to consider and prepare for before and during early retirement" article rather than an "early retirees ran into all these unexpected snake pits and want to run away" article.
Obviously you need a plan that can handle big ticket items like health care (which one might want to line up before retiring rather than after), the emotional and financial preparedness to handle down markets, and the emotional/intellectual issues around disconnecting the stimulation of working life.
I'd have written this more as a "things to consider and prepare for before and during early retirement" article rather than an "early retirees ran into all these unexpected snake pits and want to run away" article.
JustCurious
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Ziggy, I agree. Their pension alone gives them more income than the average American household. According to the census bureau, the median household income in the U.S. for 2007 is $50,233.
Income 2007
Someone I w*rk with retired at the end of last year and then came back 3 months later. He was driven insane by the gyrating stock market. Before he retired, I know he had a 60/40 asset allocation and had a decent pension.
Just watching the market go sideways drove him back. I talked to him and he admitted that intellectually he could easily weather the drops but when he watched his portfolio drop he became unnerved by the whole process.
Just as well, somebody needs to pay for my SS.
Just watching the market go sideways drove him back. I talked to him and he admitted that intellectually he could easily weather the drops but when he watched his portfolio drop he became unnerved by the whole process.
Just as well, somebody needs to pay for my SS.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
What never gets mentioned in these discussions is how much uncounted income there is. For example, health insurance, life insurance and many other job benefits. Then on the low end, Medicaid, food stamps, etc.
As a self funded retiree you are going to get none of that stuff.
Ha
Retire Soon
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You've brought up a very valid point and one that is more often than not overlooked. Gifts/handouts/charity/w*rking under the table, and other unreported income fail to be reported on government statistics.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
We had a single guy posting on here a few years back who retired with a couple million plus in his nest egg. It declined by a few thousand dollars and he couldn't stand it - panicked went looking for a job almost immediately.
"To supplement their retirement income, Frye has helped some of his clients find part-time jobs as teachers or expert witnesses."
Hey, if disaster strikes and I'm forced back to w*rk, that expert witness gig sounds great. I think I'd prefer to work for the defense: "Yes, he definitely needed killing."
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think you need to be reputable to be an expert witness.
Although I remember one lawyer in a corporate civil case talking about expert witnesses. He said one was $7000 but he was very reputable and respectable. One was $5000 and he was pretty credible. One was $3000 and had a very bad reputation but had the benefit of being "a whore that will say anything we want him to say".
So maybe you'd make it.
Although I remember one lawyer in a corporate civil case talking about expert witnesses. He said one was $7000 but he was very reputable and respectable. One was $5000 and he was pretty credible. One was $3000 and had a very bad reputation but had the benefit of being "a whore that will say anything we want him to say".
So maybe you'd make it.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
I think you need to be reputable to be an expert witness.
Although I remember one lawyer in a corporate civil case talking about expert witnesses. He said one was $7000 but he was very reputable and respectable. One was $5000 and he was pretty credible. One was $3000 and had a very bad reputation but had the benefit of being "a whore that will say anything we want him to say".
So maybe you'd make it.
For $3k I can fake the reputable part...
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well see, I'd do it for $2k and act like I really enjoyed it.
Sarah in SC
Moderator Emeritus
Blue light special on aisle two!
Leonidas
Thinks s/he gets paid by the post
Oooh Counselor! You are so good on direct, and your cross was a-a-a-amazing!
[qoute]
Let me get this straight. I'm supposed to feel sorry for someone with a $52,000 pension?? I think not.[/quote]
No, but do you think the insurance company will charge less if you have a pension? I think we should all feel sorry for ourselves.
It's outrageous for any of us to have to pay that much for insurance period.
Let me get this straight. I'm supposed to feel sorry for someone with a $52,000 pension?? I think not.[/quote]
No, but do you think the insurance company will charge less if you have a pension? I think we should all feel sorry for ourselves.
It's outrageous for any of us to have to pay that much for insurance period.
dex
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No, but do you think the insurance company will charge less if you have a pension? I think we should all feel sorry for ourselves.
It's outrageous for any of us to have to pay that much for insurance period.[/quote]
Before we feel sorry for ourselves we first should understand the numbers. For example,
1. What deductible do they have on that policy?
2 What would the premium be if they did not have a pre existing condition? To be used as a point of comparison.
3. Wouldn't a person with a pre existing condition use the benefits more than a person that doesn't? Shouldn't they pay more; similar to a person with a bad driving record?
4. Did lifestyle choices lead to their health problems?
Finally, what should they pay? And who or how do you suggest to fund the difference between the premium income and the overall cost incurred by the insurance company?
Dawg52
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I bitch a lot about the market but it sure doesn't make me want to go back to work. I just like to bitch.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
I bitch a lot about the market but it sure doesn't make me want to go back to work. I just like to bitch.
Really? Hadn't noticed...
Dawg52
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
ziggy29
Moderator Emeritus
I agree -- but it is a separate issue. The bottom line is that these two are, even after deducting their health insurance costs, getting a hell of a lot better deal with the pension than private sector folks my age and younger could realistically hope for. So it's still hard for me to muster up much sympathy.
I'll gladly pay that much for health insurance if you give me a $52,000 pension.
Good point; on the other side of the coin, there are expenses of working which are generally avoided by retirees:
- FICA
- Commuting costs
- Business clothes (depending, of course, on your job), dry cleaning, etc.
- Contributions when the hat is passed for a gift for Suzie's new baby
- Etc.
I'm not nearly smart enough to know whether what Ha mentioned balances out the things I mentioned.
The question, then, and I don't know the answer, is do positions that offer DBs pay less over one's working career? In other words, is it a wash? The person that doesn't have a DB was able to make enough through salary and company match in their 401(k) that it comes out the same.
My biggest salary bumps have been from switching employers. My current job, at 4 years, is the longest I've been anywhere... I'm guessing I'd have next to nothing coming from pensions with all of that job-hopping.
ziggy29
Moderator Emeritus
The answer may be yes, but not to the degree that someone can safely -- and assuming no market risk -- collect $52,000 a year for life before the age of 60.
I've done pretty well with salary, come close to maxing out the 401K and Roth limits most years, have been fortunate to have generous company matches on the 401Ks, and even if I can get 4% real return on about a 75/25 investment mix until the age of 60 -- assuming considerable risk -- I don't think I can safely get out more than about $38,000 a year in today's dollars at age 60. And I suspect I've done better than 90-95% of the people who are increasingly counting on 401Ks and IRAs as their primary retirement vehicle.
But, at least for a non-federal pension plan, they are taking on some amount of risk. I agree, though, $52k a year after 20 or 30 in is a pretty sweet deal.
I'll need to see if I can find the article, I think it was in one of the last NAVA pubs, there's some discussion about offering guaranteed income riders on a worker's 401(k) balance. I can't see it being a good deal, but that would give someone a DB-like plan... then again, so would any ol' annuity...
