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It feels like I will never get in front of the wave....
Old 12-13-2016, 06:31 PM   #1
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It feels like I will never get in front of the wave....

Warning: Personal cathartic post...no one else wants to listen so I thought you all might)

Anyone else feel this way? If you could just get to a certain level of saving, or payoff a lingering debt you would get in front of the wave and the momentum of your saving and planning efforts would carry you worry free for the last few years into retirement...would that not be great.

I linger on this site, and have posted a time or two, but unlike some of the stellar, smart, aggressive, lucky and/or accomplished folks that post on here, I am just an average megacorp minion with a non-working spouse that balances paying the bills and saving....holding on to the hope that I can retire a few years early at 62.

Recently my company got purchased, and although I still have my job, the pension plan I had been counting as a leg in my retirement stool is going to be closed at the end of '19, eliminating approx. $11,000 in annual income for the 6 years of service I will miss out on from the close to age 62. More retirement anxiety...yea.

I am not in a bad position having made a few good decisions throughout my working life (28 years army reserves to earn a retirement (at 60) & health care, $1.4 million saved in 401K and Roth, refinance my house to a 15 year loan), but I am not where I feel I need to be ($2.5 million 401K/Roth). With 9 years of working (hopefully only 9) to go, I can not seem to get comfortable with where I am and spend too many waking hours and sleepless hours contemplating where I am, looking at my 401K balance and weighing the what ifs.

It seems the closer I get....the more anxiety that builds. I wish I had a rich relative that would leave me $ 2 million to put me on the glide path, but alas I do not.

Anyway, thanks for listening
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Old 12-13-2016, 06:42 PM   #2
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Looks to me like you are in pretty darn good shape - better than many even on this site. Especially with the health insurance squared away. Nice assets! Alas, it is all in the expenses - how much do you need per year? You may be much closer than you think!
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Old 12-13-2016, 07:32 PM   #3
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Be thankful for what you have. You are far better off than many others.

You need to change your way of thinking otherwise your chances of attaining happiness will be extremely low.
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Old 12-13-2016, 07:38 PM   #4
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You are a megacorp minion, your wife does not work, and you have stashed 1.4 million! I would venture a guess that to achieve all that, your living costs are not too high. I would further guess that if you add up your pension, military pension, and Social Security at 62, you will be able to retire at 62 and not skip a beat! Have you done a detailed review of your spending vs. future income? Not having that pair of golden handcuffs called "bigger pension" might just encourage you to think about retiring even earlier!
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Old 12-13-2016, 07:46 PM   #5
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Originally Posted by brett View Post
Be thankful for what you have. You are far better off than many others.

You need to change your way of thinking otherwise your chances of attaining happiness will be extremely low.
agree with Brett. Your level of happiness is low. Be thankful because you have A LOT compare to an average person.
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Old 12-13-2016, 10:27 PM   #6
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I don't understand. What's the issue? You may be able to retire already! More details please.
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Old 12-14-2016, 10:50 AM   #7
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I also had a megacorp pension plan get capped in 2007. it just requires you to adjust to the new reality. Even though you have lost something (as did I), you are still in far above average condition.
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Old 12-14-2016, 11:15 AM   #8
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I also had a megacorp pension plan get capped in 2007. it just requires you to adjust to the new reality. Even though you have lost something (as did I), you are still in far above average condition.
Yes, it is a setback, because the final years of contributions/time in service can add a disproportionately large percentage to the expected monthly retirement check. But, contributing to other accounts for the final few years (tax advantaged or not) can help offset the loss. For some people with a disproportionate amount of assets in the "single pot" of an employer's non-COLA'd pension plan, it might even turn out better in the long run.

For the OP--the best use of your time at this point may be to concentrate on the spending side. You should probably keep saving, but it's unliely to move the needle very much. Look at what you spend now, crunch the numbers on what you'll be getting from various income streams long term (and don't forget to decrement that non-COLA'd pension in the outyears to account for inflation), and see where you stand. If you aren't going to be in good shape when you expect to retire, then now is the time to start tightening your belt rather than waiting until the day you clean out your desk. Getting a healthy cushion in cash equivalents to cover your withdrawals for the first few years can reduce your sequence-of-returns risk appreciably, especially if a market downturn is more likely. Stock valuations are quite high right now, which (historically) increases the risk of a fall (through we can't say when), and this might come at a bad time for you.
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Old 12-14-2016, 11:51 AM   #9
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No whining! If you contribute the max and your account grows at 5% you'll be there. Slow and steady wins the race.

AgeYearContrib5% EarningsBalance
532016   1,400.0
542017 24.0 70.6 1,494.6
552018 24.5 75.3 1,594.4
562019 25.0 80.3 1,699.7
572020 25.5 85.6 1,810.8
582021 26.0 91.2 1,928.0
592022 26.5 97.1 2,051.6
602023 27.0 103.3 2,181.8
612024 27.6 109.8 2,319.2
622025 28.1 116.7 2,464.0
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Old 12-14-2016, 11:55 AM   #10
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There ya go. Not OMY but NMY.

Or you can try to cut expenses to retire on a smaller stash.
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Old 12-14-2016, 12:16 PM   #11
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Originally Posted by Sniggle View Post
It seems the closer I get....the more anxiety that builds. I wish I had a rich relative that would leave me $ 2 million to put me on the glide path, but alas I do not.

Anyway, thanks for listening
Your situation sounds like a dream come true. I'm not sure what the source of your anxiety could be. Many of us had less of a stash than you do, did not inherit $2 million, and retired before age 62 with more than enough. I agree with the others that you might be able to retire earlier than you think. A lot depends on what you spend, so you'll need good records of that.
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Old 12-14-2016, 12:43 PM   #12
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You have 1.4million in retirement...I cant relate.
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Old 12-14-2016, 12:56 PM   #13
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Try this calculator, I like it because you figure in SS and a pension. Good job on your savings so far.

Future Value/Annuity Calculation
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Old 12-14-2016, 01:13 PM   #14
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Sniggle, From your post I can tell you are very goal oriented and had set a goal of close to 2.5 million as your comfort level. You evidently had a plan to get there that included the pension at the projected value at age 62. It is more than understandable that loosing the additional $11,000/yr in your projected pension would feel like a wave of resistance. How big a wave only you can say.
The positive is that you are doing well and have 9 years to go. My bet is that you will make it or be close enough that it may be inconsequential. All you can do is what you can do. Good luck to you!
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Old 12-14-2016, 01:20 PM   #15
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Thanks all for the replies. As I stated at the top, my retirement stress may not be entirely rational, and this post was basically cathartic.

On the spending side, I still have a few hurdles:

- 14-year old son. Not sure yet what his future holds as he is academically inconsistent (as I was at that age), but I anticipate college in his future. I have about $20,000 of new GI benefits he can use, and then will need to pay the rest. My thought would be that he will fund some of it with student loans, which I will just pay off for him over time. Goal is for him to have no debt.
- I have a French wife who likes horses. She is not fiscally irresponsible, but she does grumble under the relatively loose constraints on spending I impose(basically I need to be able to pay all the bills, have no credit card debt, and keep dumping some money into the 401K before we look at a vacation).

Recent changes have affected my ability to add to savings:
- Retired from the Army Reserves 2 years ago, which reduced my income by $20,000 annually. That income will return in 7 years as Army retirement kicks in at 60.
- Refied the house to 15 year, 3% (from 24 years left, 4.375), which added an additional $200 month on the mortgage.

As a result, I have had to drop my 401K contributions down to 8%, although I think I can start increasing them annually next year. I also have suspended contributing to my Roth's.

'Spending' understanding and control is something I need to do much better. I do not track spending currently, and kinda live from Bonus/Tax refund to Bonus/tax refund (bank account gets health in February/March, and I start worrying about my balance vs. upcoming credit card bill in November-January, rinse and repeat) I think that will be my mission next year, to start to get a clear picture of what our expenses will be in retirement.
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Old 12-14-2016, 01:37 PM   #16
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And here is my thinking on why I need $2.5 mil. That amount will give me an annual income of $100,000 (before taxes) using the 4% rule. My total pension starting at 62 will be approx. $50,000 (I need develop a more precise estimate..good project for the holiday break), with the army portion COLA'd (approx. 2/5 of that amount). So that will put me at around $150000 annual income....which will be just about my income in 9 years, give or take, which is my goal.

SS seems too far away, and at this stage I am ignoring it when mulling the numbers in my head although I need to figure out how and when it needs to be factored in. I could probably just view it as a big shot of COLA when I hit 67.

It will mostly be pre-tax, so the tax burden will be about the same. I obviously will no longer be putting $10,000+ into savings annually. I will probably have a mortgage..hard to downsize too much and have land/facilities for a couple of horses, and the expenses that go with horses. I will need to buy another car, as I drive a company car now.
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Old 12-14-2016, 02:03 PM   #17
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SS can make a huge difference in the analysis. For many years I left it out. When the time finally became appropriate for me to consider leaving, I added in the SS. Wow!, what a difference.

I assumed both DW and I would collect at age 70 and live about 30 years. Between the two of us the present value, using cpi as discount rate, of the two SS income streams is over $2 million dollars. Granted, we both worked full careers in engineering.

Regarding pension capping; I also had my Megacorp pension pulled out from under me after 22 years. I had planned to work a full 30 years and get the official retirement, but after this change, NO Way. My pension would not be one penny different if I worked another 8 years for them vs leaving now.

Nobody understood why I, being so valuable, would leave. I guess I could do pension math and they could not.

-gauss
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Old 12-14-2016, 02:19 PM   #18
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You will be amazed at how much MORE you can spend with that strategy in retirement (assuming you own a home outright). Your income tax liabilities will shrink considerably making that extra $11,000 loss to the pension mute IMHO. You've got more than enough legs to protect your retirement from even wobbling the slightest.
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Old 12-14-2016, 02:22 PM   #19
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Nobody understood why I, being so valuable, would leave. I guess I could do pension math and they could not.

-gauss
I'm willing to bet most people struggle to do this math or simply cannot be patient enough to learn the math and calculate the pension out. You'd better believe I calculated it even before vested, I absolutely need to know what I am worth in order to know if a better opportunity is lingering. Amazing how people fly blind.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 12-14-2016, 02:49 PM   #20
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So that will put me at around $150000 annual income....which will be just about my income in 9 years, give or take, which is my goal.
Wow, I can't even imagine how I could possibly blow 150K a year- I think I'm super spendy in a lot of areas now (though no mortgage) and I spent 47K last year. No horses though.

Don't really understand why you need to have the level of income you expect to be making in 9 years. You are currently paying your bills and saving on your current level of income, do you really expect your expenses to go up that much?
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