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-   -   Very small networth when ER ? (https://www.early-retirement.org/forums/f28/very-small-networth-when-er-84557.html)

Enuff2Eat 12-13-2016 01:21 PM

Very small networth when ER ?
 
It seems like lots of folks here retire early with a massive of net worth. I like to see if anyone actually pull the trigger with a small networth.

would you share your networth (asset) and age when you pull the trigger?

less than or equal to $100k
less than or equal to $250k

less than or equal to $1/2 million
less than or equal to $600k
less than or equal to $750k
less than or equal to $800k
less than or equal to $1 million
less than or equal to $1.5 million
less than or equal to $2 million

more than $2million

----------------
If your number is big enough... why are you still working? health care? boredom? 1 more year syndrome? fear out live your saving?..or Where would you want your number to be when you retire?

We are in the "less than or equal to $1.5 million" but too scare and too young to pull the trigger.

enuff

Meadbh 12-13-2016 01:25 PM

The answer to this question means nothing when pensions are not taken into account.

2017ish 12-13-2016 01:28 PM

Much depends upon whether one has a pension and healthcare until 65 from employment. If in that position, you clearly don't need as big of additional liquid net worth. [Meadbh beat me to it!]

Much also depends upon your spending plans. :)

We have no pension/insurance, and plan to spend more discretionary in retirement than we did for ourselves when working. Retiring at 57/56 with a good deal "more."

Major Tom 12-13-2016 01:37 PM

A poll would be good in this thread, even if, as already stated, lack of information on other income sources such as pensions, renders the results fairly meaningless. I suppose you could multiply the payout from a pension by a set factor (somewhere in the range of 25 - 50) to come up with an equivalent NW. In fact, the only way to make the results abundantly enlightening would be to include as much information as possible on all income sources, spending levels, general lifestyle, health insurance, housing etc etc. Luckily, spending lots of time reading these forums in detail will yield that kind of information if you have the time and the inclination.

Questions and polls like this are good for prurient interest though, if nothing else. Kind of like the financial equivalent of looking at pictures of (insert name of favorite movie or reality TV star here).

If it helps, Enuff2Eat, I retired with not very much at all (a little over a third of what you have now), about 6 years ago. I would quite like a bit more money in order to travel but to be perfectly honest, my worst enemy in the quest for a happy and contented retirement is my natural tendency to live reclusively. I really do need a certain amount of social interaction in order to keep a certain level of "joie de vivre", but am blithely unaware of that fact most of the time. Anyway, that's a topic for an entirely different thread :laugh:

braumeister 12-13-2016 02:08 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
would you share your networth (asset) and age when you pull the trigger?

Net worth, as others pointed out, is only one factor out of many. So it's like having a coloring book with only one crayon.

OP, you've been a member here for over ten years, but the low post count indicates (to me, anyway) that you probably don't visit very often. I think if you got more into the habit of reading threads here about early retirement, nearly all your questions would be answered before long. Just a suggestion.

REWahoo 12-13-2016 02:13 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
would you share your networth (asset) and age when you pull the trigger?

Sure - it was enuff. See age below.

NW-Bound 12-13-2016 02:16 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
We are in the "less than or equal to $1.5 million" but too scare and too young to pull the trigger.

You are young, but how young? 40 young or 50 young? Or 60 young like myself? Children still in middle school, or out of college and earning a living?

Your $1.5M can provide a quite comfortable retirement if you do not have a mortgage, are an empty nester, and close to drawing a pension or SS. This is assuming you do not have a luxurious lifestyle in mind, with his and her German autos replaced every 4 years, vacation in the French Riviera, etc...

Run FIRECalc with SS, and see what you can spend, compared to what you are spending now.

Don't know what you are spending now? Nobody can help you then.

Just_Steve 12-13-2016 02:32 PM

Quote:

Originally Posted by Meadbh (Post 1811512)
The answer to this question means nothing when pensions are not taken into account.

Quote:

Originally Posted by 2017ish (Post 1811516)
Much depends upon whether one has a pension and healthcare until 65 from employment. If in that position, you clearly don't need as big of additional liquid net worth. [Meadbh beat me to it!]

Two very important points which allowed me to bail out @ 55.
Pretty small combined 457b & 401k less than $150k which are just being used as bridges to SS.
I honestly think I had about $900 between my checking and savings account but now after being retired for 1 year and 11 days my emergency fund is up to about a half years living expenses and growing.
Pension and no cost medical........God bless America and the tax payers of New York.

pmac 12-13-2016 02:40 PM

Net worth and retirement savings are two different things. For purposes of retiring, I think you should only be counting savings, (and factor in pensions, if any, and SS, depending on your age) not total net worth. I'm retiring in 2 weeks at 62. DW has been retired for 4 years and is 66, with a good state pension. We have total retirement savings of around $2M, about 900K taxable and 1.1M deferred. No debt with a paid for house in a LCOL area. The plan is for her to take SS next year with me taking at 70. Firecalc and i-orp look good.

But you never know until you jump in the pool. If you and your spouse are in good health, retiring under 60 with much less than $2M and a significant pension would scare the bejesus out of me, but I'm not much a risk taker on the "do you have enough" question. You may be different.

calmloki 12-13-2016 02:43 PM

67 now and rarely paid much into social security. No pensions. Upshot is what we make or have is what we live on. Good side is we have plenty of net worth to provide for our lifestyle, but we stay in the game with 37 mostly one bedroom rentals and loaning money out on property - which means NW continues to grow. I think about the fact that every birthday passed means I need maybe 5% less NW to get to the end. Nonetheless, color me chicken, but it is HARD to make the leap of faith living on NW takes.

Bir48die 12-13-2016 02:47 PM

Net worth is such an overused term. Should be investible assets plus some factor equated to you pension. Housing should be excluded unless you tapped it as a source of income. Instead of net worth it always comes back to income needed to cover said expenses and the various means to derive that income.

Big_Hitter 12-13-2016 02:58 PM

is this a pole?

REWahoo 12-13-2016 02:59 PM

No, it's a fence post.

ESRwannabe 12-13-2016 03:11 PM

I'd ER off of taxable $400k and a paid off house. Note I'm 40 and can start collecting on a pension at 60. My savings just need to get me to 60. My guess is I will be able to ER within the next five years.

marko 12-13-2016 03:22 PM

Net worth, COL, debt, age, SS/Pensions, Life expectancy, dependent children, geographic area all play into the calculation; which is quite a calculation come to think of it!

A NW alone of $X in SFO/NYC means something entirely different than it might in Iowa (for example...not singling out Iowans!)

DrRoy 12-13-2016 03:38 PM

+2M for the comfort of DW. Going in 3 months at 57.

FUEGO 12-13-2016 03:50 PM

We retired right at the $1.5 million mark and it's since grown to roughly $1.7 million, though I also started a side hustle that pays most of our admittedly small expenses.

A huge help is having that low income and 3 kids so our health insurance is near-zero ($16/mo for a $100 deductible plan in 2017; kids likely on medicaid but it's pretty awesome here and covers even more than our $100 deductible plan).

We also own a 4 bedroom home paid off. That's part of the $1.7 million ($145,000 is what I'm carrying it at on my net worth statement).

We get by pretty well and spend $30-40k/yr. Without a mortgage and only a very modest tax bill, most of that spending goes toward food and vacations plus big ticket items (major home renovations, "new" used car, etc). Since retiring, we've gone on ~2 cruises per year plus a long international summer vacation of 3-7 weeks (it'll be 9 weeks in Europe in 2017). I can't complain about life at all!

travelover 12-13-2016 04:17 PM

Quote:

Originally Posted by Meadbh (Post 1811512)
The answer to this question means nothing when pensions are not taken into account.

+1 DW and I both have pensions and heavily subsidized health care, plus a paid off house. We have not taken SS or any portfolio withdrawals. Different circumstances would provide a much different answer re portfolio size.

aaronc879 12-13-2016 04:32 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
We are in the "less than or equal to $1.5 million" but too scare and too young to pull the trigger.
enuff

No such thing as "too young" to retire. If you have enough money then you can retire. I would have retired at 18 if I could. I'd retire tomorrow at age 37 if I could afford it.

CDRE 12-13-2016 04:51 PM

Quote:

Originally Posted by aaronc879 (Post 1811652)
No such thing as "too young" to retire. If you have enough money then you can retire. I would have retired at 18 if I could. I'd retire tomorrow at age 37 if I could afford it.

+1

braumeister 12-13-2016 05:10 PM

aaronc879 brings up the thought that I think the vast majority of us have:
Quote:

I'd retire tomorrow ... if I could afford it.
Still, this is such a new thing. My grandparents were able to retire, but their parents, born in the mid 19th century, had no such concept. Now some of us get to do it earlier, some later. Some of us can do it in more comfort, some less. but the fact that we can do it at all is just so remarkable that I don't have a lot of patience with those who complain about various aspects of it.

I think Wikipedia puts it rather well:
Quote:

In most countries, the idea of retirement is of recent origin, being introduced during the late 19th and early 20th centuries. Previously, low life expectancy and the absence of pension arrangements meant that most workers continued to work until death. Germany was the first country to introduce retirement, in 1889.[5]

Nowadays, most developed countries have systems to provide pensions on retirement in old age, which may be sponsored by employers and/or the state. In many poorer countries, support for the old is still mainly provided through the family. Today, retirement with a pension is considered a right of the worker in many societies, and hard ideological, social, cultural and political battles have been fought over whether this is a right. In many western countries this right is mentioned in national constitutions.

AlbaCrush 12-13-2016 05:39 PM

Quote:

Originally Posted by Meadbh (Post 1811512)
The answer to this question means nothing when pensions are not taken into account.

I just retired this year at age 50 with a Police Pension of $55,000 with COLA and a generous health and dental package. I have no debt. My house which is paid off is worth about $250,000. I have a modest 457 with $300K in it and another $60K in savings.

I'm not even close to having millions like others on here. Even though I don't have millions, I live comfortably and have taken several trips. The pension and health care package allows me to do this at an early age. :)

Walt34 12-13-2016 05:42 PM

Quote:

Originally Posted by braumeister (Post 1811665)
Still, this is such a new thing. My grandparents were able to retire, but their parents, born in the mid 19th century, had no such concept. Now some of us get to do it earlier, some later. Some of us can do it in more comfort, some less. but the fact that we can do it at all is just so remarkable that I don't have a lot of patience with those who complain about various aspects of it.

I also wonder if the retirement as we know it now (at least in the U.S.) will become a historical anomaly born of the economic expansion of the early and mid-20th century. (1930's excepted, of course.)

I got lucky and picked parents and time and location to be born into, and picked an occupation and employer that had a very good (and funded) pension plan. Frankly, I didn't give retirement much thought at all until my mid 30's and could have pulled the plug - with a heavy hit - as early as age 46. Outside the military and public safety positions that require relatively young and fit people I don't see that happening much anywhere.

From what I've read of psychology, money, and behavior it is a rare person who has the discipline and foresight to begin saving for retirement in their early 20's, let alone teens. I think the whole 401(k) system is going to be generally a disaster, with millions of people quickly exhausting what they've saved (if anything) and then relying on whatever SS evolves into. Several of my nephews are going to be some of them.

Still, it can be done so there is hope: https://www.early-retirement.org/foru...ars-72212.html

travelover 12-13-2016 05:49 PM

Quote:

Originally Posted by Walt34 (Post 1811678)
......... I think the whole 401(k) system is going to be generally a disaster, with millions of people quickly exhausting what they've saved (if anything) and then relying on whatever SS evolves into. ..........

I agree. The era of pensions will be a blip in history and it will go back to the way it was - multiple generations living in the same house or sharing with roommates.

braumeister 12-13-2016 05:50 PM

Quote:

Originally Posted by Walt34 (Post 1811678)
I also wonder if the retirement as we know it now (at least in the U.S.) will become a historical anomaly born of the economic expansion of the early and mid-20th century. (1930's excepted, of course.)

I think you may be right. You made a good (if risky) decision to go into law enforcement, just as I did in the military. Fortunately, we both avoided early death and were able to receive the promised retirement packages. But we're a tiny minority.

One thing is for sure: Fifty years from now things will be very different.

Enuff2Eat 12-13-2016 06:19 PM

Quote:

Originally Posted by Meadbh (Post 1811512)
The answer to this question means nothing when pensions are not taken into account.

Not everyone is fortunate enough to have a pension. Especially self employ people

Nemo2 12-13-2016 06:41 PM

Stopped working at the end of December 1988 aged 46 years and 3 months......had $500k Canadian, (no pension), and fixed income savings account rates were running up to 11 1/2% per annum.

Bought a spec house in B.C. with my late wife, did a huge amount of exterior (garden/landscaping) work ourselves, and paid for some interior additions.......sold it after eight years and cleared twice what we paid.

Currently have slightly over 370% of what I had when I stopped working, ( a couple hundred k of that came with DW).

With the standard Canadian government pensions, (similar to SS, plus DW qualifies for the age segment in 10 months), we do pretty well....a little travel once in a while...(sometimes twice in a while)..no complaints....(especially since I didn't start 'really' working until I was about thirty).

Oh, and our projected expenditure for 2016 is ~ $37,000 Canadian, ($28,000 US).

ChiliPepr 12-13-2016 06:49 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811688)
Not everyone is fortunate enough to have a pension. Especially self employ people

I believe that is what Meadbh meant.... someone with a COLA pension of $60k with health insurance and $300k in an IRA is probably better off than someone with $1.5 million in the bank.

Enuff2Eat 12-13-2016 07:33 PM

Quote:

Originally Posted by ChiliPepr (Post 1811700)
I believe that is what Meadbh meant.... someone with a COLA pension of $60k with health insurance and $300k in an IRA is probably better off than someone with $1.5 million in the bank.

You made a lot of sense. My neighbor retired at 52... according to him. he has very little of saving except of his house is paid for and $51k/year pension. He probably feels alot more secure than a person with 1.5 million for sure. (he was a fireman).

he recently told that his wife retire too and they survive only his pension. Nice. :-)

Enuff2Eat 12-13-2016 07:35 PM

Quote:

Originally Posted by braumeister (Post 1811681)
I think you may be right. You made a good (if risky) decision to go into law enforcement, just as I did in the military. Fortunately, we both avoided early death and were able to receive the promised retirement packages. But we're a tiny minority.

One thing is for sure: Fifty years from now things will be very different.


In so many way, a guarantee nice pension is better than a large net worth.

NW-Bound 12-13-2016 07:52 PM

Quote:

Originally Posted by travelover (Post 1811679)
I agree. The era of pensions will be a blip in history and it will go back to the way it was - multiple generations living in the same house or sharing with roommates.

In order to live with the younger generations, you need to have offsprings.

Well, I guess a geezer can get adopted by a family. :) Else, roommates it is.

travelover 12-13-2016 07:55 PM

Quote:

Originally Posted by NW-Bound (Post 1811732)
In order to live with the younger generations, you need to have offsprings.

Well, I guess a geezer can get adopted by a family. :) Else, roommates it is.

When I was a kid, my elderly neighbor did this. He essentially gave a family his home as long as they cared for him until he died, which they did. They all lived together, then sold the house after he died.

Luck_Club 12-13-2016 08:03 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
less than or equal to $100k
less than or equal to $250k

less than or equal to $1/2 million
less than or equal to $600k
less than or equal to $750k
less than or equal to $800k
less than or equal to $1 million
less than or equal to $1.5 million
less than or equal to $2 million
more than $2million

enuff

I think everyone is hinting around it, but it still depends.


A person with a $2 million Net worth and no health care is most likely worse off than someone with $0 Net worth but has a $60K govt pension and healthcare coverage.

What is probably more pertinent is "What was your available Cash Flow, when you retired?" You could further parse that down to after tax, after Health care, after mortgage, etc. The cash flow number you need will vary, but should be slightly less than your working cash flow number. Especially since you won't be stashing away as much of your cash flow for later in life anymore. For many that can cut the cash flow requirement in half!:blush:

Cash Flow is king. If you have more coming in then going out no worries. Less input than output is a world of anxiety and depression.:frown:

NW-Bound 12-13-2016 08:03 PM

Quote:

Originally Posted by travelover (Post 1811733)
When I was a kid, my elderly neighbor did this. He essentially gave a family his home as long as they cared for him until he died, which they did. They all lived together, then sold the house after he died.

Did they have to care for him very long? ;)

FUEGO 12-13-2016 08:17 PM

Quote:

Originally Posted by Enuff2Eat (Post 1811724)
In so many way, a guarantee nice pension is better than a large net worth.

Yeah, I'd probably take that $55k per year police pension plus health/dental, few hundred thousand in the bank, and a paid off home. That would allow us to spend about $10-15k more than right now.

Though I kind of like watching my portfolio go up since it might allow higher spending in the future (it's going to take a while before we can spend $55k though!)

travelover 12-13-2016 09:04 PM

Quote:

Originally Posted by NW-Bound (Post 1811738)
Did they have to care for him very long? ;)



As I recall, it was about 10 years.

Sunset 12-13-2016 10:34 PM

Quote:

Originally Posted by Bir48die (Post 1811574)
Net worth is such an overused term. Should be investible assets plus some factor equated to you pension. Housing should be excluded unless you tapped it as a source of income. Instead of net worth it always comes back to income needed to cover said expenses and the various means to derive that income.

Even housing should be included when owned, as it saves the cost of rent minus the taxes, insurance, repairs.
So include the house "pseudo monthly income value" like a small pension.

I do like the idea of rather than net worth, to convert everything to yearly pension or income value a better comparison method.

Totoro 12-14-2016 07:08 AM

I'm in the sub-million camp, and consider myself FI. I have modest wants and am single. No pension, but socialized healthcare (Europe) and maybe a modest inheritance somewhere in the next 40 years.

Against better judgment (?) though I'm trying to build up my second company, mostly because I want to. So far it has only cost me money, and it will likely stay that way for a few more quarters. If that fails, I'm done with that and will optimize for independence further.

That would likely entail being an independent consulting for a few months a year. Or even join a startup (as employee).

Why do this? Because I like the intellectual challenge, want to find out if would enjoy building up a company, am nervous about the financial horizon (being mid thirties) and would like a slightly different lifestyle in the end which I currently cannot afford with worry: living on two continents. That would take somewhere north of 1.5 - 2 million (it includes a small airplane).

So a mix of ego, financial worry, lifestyle inflation and ambition ..

scrabbler1 12-14-2016 07:45 AM

Because I ERed at such a young age (45) 8 years ago, I needed to have a good chunk of my portfolio in non-retirement accounts so I could safely get from that age to age ~60 when the first of what I call "reinforcements" kicks in. Those reinforcements are unfettered access to my tIRA, my frozen company pension (only $1,200 a month, when I turn 65), and SS.


Before I ERed, I had about 2/3 of my $840k portfolio in pretax accounts and 1/3 in after-tax accounts, I had to reverse that ratio so I'd have enough to live on for 15 years until the reinforcements arrive. Half of that pretax portfolio (or 1/3 of the overall portfolio) was in company stock which I was able to liquidate relatively cheaply by using the NUA option to reduce the tax bite. Thanks to the crashing markets in late 2008, I was able to buy 25% more shares of a big bond fund at bargain-basement prices which has helped my monthly dividend income.


Despite pulling nearly $25k from the portfolio every year, it has still grown from $840k in late 2008 to $1.4M today.


I am just more than half way to getting to age ~60 intact since I ERed so things are looking good!

NW-Bound 12-14-2016 09:11 AM

Quote:

Originally Posted by travelover (Post 1811765)
As I recall, it was about 10 years.

I was making a facetious comment about the family having a conflict of interest with the man's longevity.

If honest people can be found, it would be a better deal than signing over one's assets to a nursing home. Still, it requires that one has some assets, and is not barehanded.

COcheesehead 12-14-2016 10:49 AM

My Dad retired with a net worth of about $50,000, but he had a union pension and SS and lived for nearly 28 years without touching the nest egg. His net worth all but disappeared in the last few months of his life once he had to be put into a care facility.

skipro33 12-14-2016 11:03 AM

Hmmm... net worth... retired 4 years ago;
Well, my pension is a bit over $5,000 a month with a 5% COLA based on the usual tables.
Health care is covered. I pay about $50 a month plus the usual co-pays for visits and prescriptions.
My 401K, 457, IRA's, checking, savings and wallet all adds up to $400,000 of which I have been withdrawing 4% ($1,300 monthly) for the past 4 years when it only added up to $375,000.
I start drawing Social Security at age 62 in 2 years for what will be a total of $2,500 a month for DW and I. At which time I probably won't withdraw the $1,300 from my savings/investments. That pot of money will be for long term health care needs, emergencies, grand kids college, etc.

I own my own home worth approx $800,000 and other personal property worth maybe $300,000.

jkern 12-14-2016 11:25 AM

Quote:

Originally Posted by scrabbler1 (Post 1811826)


Before I ERed, I had about 2/3 of my $840k portfolio in pretax accounts and 1/3 in after-tax accounts, I had to reverse that ratio so I'd have enough to live on for 15 years until the reinforcements arrive. Half of that pretax portfolio (or 1/3 of the overall portfolio) was in company stock which I was able to liquidate relatively cheaply by using the NUA option to reduce the tax bite. Thanks to the crashing markets in late 2008, I was able to buy 25% more shares of a big bond fund at bargain-basement prices which has helped my monthly dividend income.


Despite pulling nearly $25k from the portfolio every year, it has still grown from $840k in late 2008 to $1.4M today.


I am just more than half way to getting to age ~60 intact since I ERed so things are looking good!

My situation was very similar. Retired 6/09 age 51 with $900k portfolio, about 2/3 after tax. Spent $100k remodeling/upgrading home. Spent $300k on rental properties. Now worth about $1.6M (IRA, Cash, Rentals). I have less than 6 months before I have access to the IRA.

marko 12-14-2016 11:28 AM

Let's remember that a guaranteed $60K COLA'd pension is equivalent to $1.5 million portfolio.

NW-Bound 12-14-2016 11:49 AM

Quote:

Originally Posted by marko (Post 1811910)
Let's remember that a guaranteed $60K COLA'd pension is equivalent to $1.5 million portfolio.

... in terms of cash flow. When you and your spouse die, the pension stops, but the portfolio lives on for your heirs.

exnavynuke 12-14-2016 11:57 AM

Quote:

Originally Posted by NW-Bound (Post 1811920)
... in terms of cash flow. When you and your spouse die, the pension stops, but the portfolio lives on for your heirs.

Which is nice, for people that have heirs they want to leave their money to. If that's not a priority/desire, then the difference is fairly immaterial imo.

NW-Bound 12-14-2016 12:06 PM

Very true.

Another difference between having your own stash and a steady income is that the former gives you more flexibility. For example, you can spend a lot one year, then make up for it later. With a steady income, you have to save first before you can splurge. Of course most people have some savings outside of their pension too.

This freedom in managing your assets of course comes in exchange for the occasional stomach ache when the market turns south. But as I am used to it, it is no longer a problem.

Beardog 12-14-2016 12:16 PM

As a self-employed person, I have no concept of how awesome it must feel to have an approximately $60K per year COLA pension and health care paid for in retirement. In my mind, I have to save/compound $2.5 million of my hard earned money to come close to the same "guaranteed" retirement benefits. I would take a few hundred thousand bucks in my pocket and the defined benefit pension/health insurance in a heartbeat. For current and near retirees, what a great deal! For future retirees, and perhaps very young current retirees with long anticipated lifespans, it looks like the great defined benefits may soon become shaky ground upon which to plan the future.

ExFlyBoy5 12-14-2016 12:17 PM

Quote:

Originally Posted by FUEGO (Post 1811748)
Yeah, I'd probably take that $55k per year police pension plus health/dental, few hundred thousand in the bank, and a paid off home. That would allow us to spend about $10-15k more than right now.

I was fortunate to hang around the Air Force long enough to get a pension; it's a HUGE reason I was able to retire so young. But, there were sacrifices over a period of 22 years to bring this to fruition but those sacrifices (mine, specifically) pale in comparison to what others had to do to earn (as opposed to GET) the monthly "wake up pay".

As far as I am concerned, there is NO way I would want to be in law enforcement for 2 days, let alone 20+ years to "get" that pension. Here in Georgia, there have been 6 officers shot in the line of duty over the last week. That is a risk that is simply too great for me to accept..so that pension is HARD EARNED. Not only to mention, the police pension of today is much different than the pension of 10 years ago.

Quote:

Originally Posted by Beardog (Post 1811938)
As a self-employed person, I have no concept of how awesome it must feel to have an approximately $60K per year COLA pension and health care paid for in retirement.

Not to beat a dead horse, but for a lot of folks (military/police/fire) this comes at a HUGE cost. Missed holidays. Missed birthdays. Missed anniversaries. Missed special occasions. Debilitating injuries at a young age. Shorter life span. Point being, this isn't a "free" benefit...it is a decent return of investment that can have a VERY steep initial cost. Just saying. ;)

Beardog 12-14-2016 12:30 PM

Yeah, I'm with you, ExFlyBoy5. I don't begrudge anything that comes as future reimbursement/payment/benefit to all who put themselves in harm's way for their fellow citizens. I think its great. I just don't see how it can all last indefinitely. Military, police, and firefighter benefits should be untouchable, IMHO.

Mdlerth 12-14-2016 01:35 PM

Quote:

Originally Posted by Walt34 (Post 1811678)
I also wonder if the retirement as we know it now (at least in the U.S.) will become a historical anomaly...

I suspect you are right. Change is the only constant. Retirement was already different for the two prior generations in my own lineage.

Both my grandfathers passed on at about age 50. One grandmother made it to about 70, but from my earliest recollection she was always frail, and was mostly bedridden the last ~5 years of her life. A lifelong smoker, it was an accomplishment to make it as far as she did. Neither pensions nor savings did any of them much good.

OTOH, my parents are still rockin' it in their 80s, enjoying the fruits of both DB and DC vehicles. My father rode the peak of the pension era, enjoying a COLAd federal check for the past 25 years, while my mom collects SS and also gets RMDs from an IRA still worth more now than when she retired.

So, what will retirement look like when I enter it? Considering my family history, whether I end up rich or poor should be of only minor concern. Much more important will be whether I replicate the robust health of my immediate predecessors.

To the OP: It's too early for me to tell what my net worth will be when I RE, since it's still a ways off. Somewhere between 1M and 2M, so probably doesn't qualify for your survey.

Johnora 12-14-2016 02:21 PM

More questions than answers....
 
So an open ended question like this post tends to get lots of differing answers.

It also depends upon ones perspective of what the definition of low NW is. In our case we will have two pensions that should pay for 90-95% of our expenses, our mortgage will be paid off and the current $400K in various retirement accounts seems small but will not be depended on for monthly expenses and will remain invested in a fairly aggressive manner as we can ride out most rough times if and when they occur.

It is all about planning and everyone's situation is just a little bit different than the next persons. Our investment statement was written many years ago with a strict disciplined plan. We have stuck to it, travelled well at the same time and let our neighbors buy all of the expensive toys. I will have my last day of work in 8 days @52 as a Christmas present to myself and officially FIRE 3/1/2017 after being on an end of career vacation until then.

So 400K may be low too many, but it is just fine with us. :coolsmiley:

l8_apex 12-14-2016 02:32 PM

Quote:

Originally Posted by Johnora (Post 1812029)
So an open ended question like this post tends to get lots of differing answers.

It also depends upon ones perspective of what the definition of low NW is. In our case we will have two pensions that should pay for 90-95% of our expenses, our mortgage will be paid off and the current $400K in various retirement accounts seems small but will not be depended on for monthly expenses and will remain invested in a fairly aggressive manner as we can ride out most rough times if and when they occur.

It is all about planning and everyone's situation is just a little bit different than the next persons. Our investment statement was written many years ago with a strict disciplined plan. We have stuck to it, travelled well at the same time and let our neighbors buy all of the expensive toys. I will have my last day of work in 8 days @52 as a Christmas present to myself and officially FIRE 3/1/2017 after being on an end of career vacation until then.

So 400K may be low too many, but it is just fine with us. :coolsmiley:

I read this as saying your net worth is 400k. Why would you say your net worth is 400k? Seems like the pension should have some value and be added to determine net worth.

Johnora 12-14-2016 02:41 PM

well...
 
Quote:

Originally Posted by l8_apex (Post 1812034)
I read this as saying your net worth is 400k. Why would you say your net worth is 400k? Seems like the pension should have some value and be added to determine net worth.

As I stated there are many different definitions of what makes up a Net Worth. I have heard even professionals say you shouldn't add in your value of your house. When it comes to pensions it can be a struggle to determine what the net worth is even though their are pretty simple formulas that can estimate what your pension value would look like as a net worth.

Personally is our case if you looked at what kind of retirement account balance you would need to get a 4% SWR to equal our pensions, it would be valued at around 2.5 million, but that is not universally agreed upon as a legit value by others.

It works for me and I believe you were correct in what you wrote as well, from my perspective.

razztazz 12-14-2016 02:42 PM

Quote:

Originally Posted by l8_apex (Post 1812034)
I read this as saying your net worth is 400k. Why would you say your net worth is 400k? Seems like the pension should have some value and be added to determine net worth.


That's how I've always done it. Impute a cash value for the pension and, years ago when it was worth a great deal more, try to impute a value for the medical insurance I've had. That was harder to do and depending on how I calculated it had a wide assortment of outcomes. All tolled pension, stash, and medical was well under a million 21 yrs ago when I retired.

Lakedog 12-14-2016 02:58 PM

As others have said, a pension makes a big difference. I retired in 2008 @ 51 with under $500k, a paid off house, and a federal pension that more than covers my living expenses. My investments have more than doubled in 8+ years of retirement as there has been little need to touch savings except for an occasional high $$ purchase (auto/RV/condo).

Enuff2Eat 12-14-2016 03:08 PM

Quote:

Originally Posted by Lucky-Sperm-Club (Post 1811737)
I think everyone is hinting around it, but it still depends.


A person with a $2 million Net worth and no health care is most likely worse off than someone with $0 Net worth but has a $60K govt pension and healthcare coverage.

:frown:


oops now that I think about it. Base on 2 million dollars, If you withdraw $60k/year and "smart"enough to get 5% return from your money (not including health insurance).... I think you can live comfortably for another 30 years after retirement.

After 30 years your balance will be $3,146,749.00

In that case, If the calcualtion correct. You should take the 2 million...hheheheeh JK

https://www.calcxml.com/calculators/...tor-data-table
3,156,749

skipro33 12-14-2016 03:20 PM

Something to keep in mind about pensions;
That money is lieu-of, not on-top-of a salary that is comparable to a salary that doesn't have a pension plan. I funded 50% of my pension directly from my salary, which the company matched and I didn't have the option to opt out of the plan either.

Way back when, I had the choice to either be self employed (I owned a Radio Shack franchise) or go to work for the municipal electric company. With 2 young kids, one with health/medical needs, the prudent and conservative plan was to go for the steady pay check and medical. I realized I would give up the dream of wealth and opportunity for unlimited growth, but as a father, I did what I needed to ensure my kids well being.

I sold the franchise and that was a good deal considering where Radio Shack is today. I do wonder about where I'd be financially if I had remained a business owner, but hey; I have enough to do anything I want to do and not enough to do EVERYTHING I want to do. Ha!

Johnora 12-14-2016 03:27 PM

Quote:

Originally Posted by Lakedog (Post 1812063)
As others have said, a pension makes a big difference. I retired in 2008 @ 51 with under $500k, a paid off house, and a federal pension that more than covers my living expenses. My investments have more than doubled in 8+ years of retirement as there has been little need to touch savings except for an occasional high $$ purchase (auto/RV/condo).

Probably the biggest argument about including a pension in your net worth, and mind you I include mine, is this:

Today:
$2 million in Retirement accounts
or $2 million value in your pension

If you die tomorrow??
You still have $2 million in your retirement accounts... (heirs)
Most pensions will be at zero unless you have a reduced value with a contingent annuitant and they didn't suffer the same fate.

So it goes back to how new worth is defined....

Totoro 12-14-2016 04:34 PM

Quote:

Originally Posted by NW-Bound (Post 1811933)
With a steady income, you have to save first before you can splurge.

With a steady income you can get a loan.

Major Tom 12-14-2016 04:44 PM

Quote:

Originally Posted by Lakedog (Post 1812063)
My investments have more than doubled in 8+ years of retirement as there has been little need to touch savings except for an occasional high $$ purchase (auto/RV/condo).

If only every 8 year period could be the same!

NW-Bound 12-14-2016 05:27 PM

Quote:

Originally Posted by Totoro (Post 1812105)
With a steady income you can get a loan.

... and pay what interest? Why don't you mention charging up credit cards too?

Gah! Those forbidden thoughts could get you expelled from this board.

FreeBear 12-14-2016 06:01 PM

Quote:

Originally Posted by skipro33 (Post 1812076)
I sold the franchise and that was a good deal considering where Radio Shack is today. I do wonder about where I'd be financially if I had remained a business owner, but hey; I have enough to do anything I want to do and not enough to do EVERYTHING I want to do. Ha!

Nicely done! I'm in a similar situation in my FIRE and this is what really matters to me. Can't do everything, but neither do I have to do stuff I don't like...

COcheesehead 12-14-2016 06:40 PM

This thread reminds me of winning the lottery. Do you take the lump sum or the 20 year annuity? Your answer says a lot about who you are.

Onward 12-14-2016 10:17 PM

Seven years ago I did it very bare-bones, by most people's standards here.

Age 46 with around $250k in taxable accounts and $250k in retirements accounts. Also two residential rental properties with very little net equity (then) and slightly negative cash flow. No pension. No company health ins. Very modest Social Security available at 62 or later.

What allowed me to do it was:

- I'm single with no kids
- I have no debt, other than the mortgages
- I'm healthy. No prescriptions or conditions
- I'm flexible and can live simply
- I was/am very open to living in low-cost countries like Ecuador or Thailand, if necessary
- I was open to medical tourism, if necessary to save $$
- I had skills that would allow me to go back to work easily (in the initial yrs, anyway), if necessary

But what made the decision easy is that corporate life (and I worked at home!) had become a torture. The inevitable politics were making me miserable, and I could feel it eating away at my soul and shortening my life. Changing corporations made no difference. I was done.

Fast forward seven years ... Taxable is around $220k, retirement around $425k and equity in properties around $150k. Strong markets have helped. Another factor is the one-man company I started five yrs ago when I got bored. It nets around $25k/yr, allows me to spend & travel more freely, and even lets me relive that old thrill of investing new $$.

skipro33 12-14-2016 11:01 PM

Quote:

Originally Posted by Onward (Post 1812242)
Seven years ago I did it very bare-bones, by most people's standards here.

Age 46 with around $250k in taxable accounts and $250k in retirements accounts. Also two residential rental properties with very little net equity (then) and slightly negative cash flow. No pension. No company health ins. Very modest Social Security available at 62 or later.

What allowed me to do it was:

- I'm single with no kids
- I have no debt, other than the mortgages
- I'm healthy. No prescriptions or conditions
- I'm flexible and can live simply
- I was/am very open to living in low-cost countries like Ecuador or Thailand, if necessary
- I was open to medical tourism, if necessary to save $$
- I had skills that would allow me to go back to work easily (in the initial yrs, anyway), if necessary

But what made the decision easy is that corporate life (and I worked at home!) had become a torture. The inevitable politics were making me miserable, and I could feel it eating away at my soul and shortening my life. Changing corporations made no difference. I was done.

Fast forward seven years ... Taxable is around $220k, retirement around $425k and equity in properties around $150k. Strong markets have helped. Another factor is the one-man company I started five yrs ago when I got bored. It nets around $25k/yr, allows me to spend & travel more freely, and even lets me relive that old thrill of investing new $$.

Way to go! Taking control of your fate instead of staying stuck miserable. You got it figured out.

Lakedog 12-15-2016 06:59 AM

Quote:

Originally Posted by Major Tom (Post 1812117)
If only every 8 year period could be the same!

Sure would be nice, huh? Although my investments have more than doubled from the day I retired through today, there was a drop of almost 40% within my first year of retirement.

Danmar 12-15-2016 07:46 AM

Funny how this discussion has evolved into mostly pensions. Agree these are very good to have. My non cola pension represents almost half our available cash flow but when I was working really didn't give the pension much thought. Now after 10 years of retirement that monthly deposit is really nice. Also allows me to take a little more risk in the portfolio.

Enuff2Eat 12-15-2016 09:48 PM

Quote:

Originally Posted by Onward (Post 1812242)
Seven years ago I did it very bare-bones, by most people's standards here.

Age 46 with around $250k in taxable accounts and $250k in retirements accounts. Also two residential rental properties with very little net equity (then) and slightly negative cash flow. No pension. No company health ins. Very modest Social Security available at 62 or later.

What allowed me to do it was:

- I'm single with no kids
- I have no debt, other than the mortgages
- I'm healthy. No prescriptions or conditions
- I'm flexible and can live simply
- I was/am very open to living in low-cost countries like Ecuador or Thailand, if necessary
- I was open to medical tourism, if necessary to save $$
- I had skills that would allow me to go back to work easily (in the initial yrs, anyway), if necessary

But what made the decision easy is that corporate life (and I worked at home!) had become a torture. The inevitable politics were making me miserable, and I could feel it eating away at my soul and shortening my life. Changing corporations made no difference. I was done.

Fast forward seven years ... Taxable is around $220k, retirement around $425k and equity in properties around $150k. Strong markets have helped. Another factor is the one-man company I started five yrs ago when I got bored. It nets around $25k/yr, allows me to spend & travel more freely, and even lets me relive that old thrill of investing new $$.

Great story. Sometime it's not the size of your net worth but the size of your guts that decide when you get to retire. Congrats

NW-Bound 12-15-2016 10:20 PM

Size of one's guts? I thought it's some other organs.

dallas27 12-16-2016 06:16 PM

Quote:

Originally Posted by Meadbh (Post 1811512)
The answer to this question means nothing when pensions are not taken into account.



The "rules" need to state to convert annuity at a certain rate, and explain the math for those who don't know how. Also need to have differing formulas for cola/nocola and maybe also old v young.

foxfirev5 12-16-2016 06:37 PM

In the overall context of the is forum this thread is meaningless. Just say'in. Figure it out for yourself.

TNBound 12-17-2016 09:19 AM

Very small networth when ER ?
 
Retiring next month at 57. WooHoo! DH retired at 55 but works PT. Agree cash flow is king. I think we're ok but can't help but be a little nervous about pulling the plug. Our situation is this; only about $150k in savings, 30k in IRAs, but state and federal pensions totaling $78k and gross rental income of $38k. My state retirement includes a COLA of 3% compounded annually, so after 30 years, just my payments alone will have totaled over 2.5M. It's a sweet deal and I feel very blessed to have gotten my 25 years in. I'll also have a decent SS, DH won't because of the federal offset and I'll probably begin drawing between 62-65. Wish we had more of a cushion in cash, but any real reason to be nervous?

2017ish 12-17-2016 10:41 AM

Quote:

Originally Posted by TNBound (Post 1813093)
Retiring next month at 57. WooHoo! ... Our situation is this; only about $150k in savings, 30k in IRAs, but state and federal pensions totaling $78k and gross rental income of $38k. My state retirement includes a COLA of 3% compounded annually, so after 30 years, just my payments alone will have totaled over 2.5M. .... I'll also have a decent SS, DH won't because of the federal offset and I'll probably begin drawing between 62-65. Wish we had more of a cushion in cash, but any real reason to be nervous?

Congrats, from someone already in TN. :)

Unless you have some seriously large nondiscretionary spending, you are sitting pretty--assuming that your state's pension situation is not bad. (I.e., big difference between IL and TN in this regard.) Don't forget your safety net of rentals--if push came to shove (or if you just get tired of handling them), that gross rental income can be converted into liquid assets. What is your spend rate, and will it be when the two of you are both retired? That is the key question.

We have a much larger pot of liquid assets than you, but only pension is the possibility probability of Social, which we'll draw at 70 if things don't change compellingly. If you had reason to be nervous, I'd hate to think of what we should be feeling! (And, to be clear, we aren't nervous about cutting the cord this coming summer at 57/56.)

E.T.A.

Youngster 12-17-2016 12:32 PM

Maybe I missed it; however, is there a simple formula to calculate the value of a cola'ed pension?

Enuff2Eat 12-17-2016 12:37 PM

Quote:

Originally Posted by TNBound (Post 1813093)
Retiring next month at 57. WooHoo! DH retired at 55 but works PT. Agree cash flow is king. I think we're ok but can't help but be a little nervous about pulling the plug. Our situation is this; only about $150k in savings, 30k in IRAs, but state and federal pensions totaling $78k and gross rental income of $38k. My state retirement includes a COLA of 3% compounded annually, so after 30 years, just my payments alone will have totaled over 2.5M. It's a sweet deal and I feel very blessed to have gotten my 25 years in. I'll also have a decent SS, DH won't because of the federal offset and I'll probably begin drawing between 62-65. Wish we had more of a cushion in cash, but any real reason to be nervous?

amazing... retire at 57 and with a nice pension. Congrats.

I, however, think that the country can't sustain this kind of benefit for so many "young" retiree that will collect for the next 15-25 years after retirement. I am guessing it would probably take 3 or 4 productive working people to cover your retirement pension...

Dang, I better join you as early as possible before the money runs out... :-) Jk

travelover 12-17-2016 02:08 PM

Quote:

Originally Posted by Enuff2Eat (Post 1813223)
...........I am guessing it would probably take 3 or 4 productive working people to cover your retirement pension............

A properly funded pension plan should not depend on ongoing contributions. It should operate just like your 401(k), except is takes advantage of the fact that some retirees will die young, leaving money to cover those that obstinately continue to live past their due date.

Totoro 12-17-2016 03:32 PM

Quote:

Originally Posted by Youngster (Post 1813220)
Maybe I missed it; however, is there a simple formula to calculate the value of a cola'ed pension?

A decent first approximation is [Expected age of death - Current age] x yearly pension.

So a 40k yearly pension at age 60, expected (statistically) to die at 90, works out to 1.2M.

Youngster 12-17-2016 03:39 PM

Quote:

Originally Posted by Totoro (Post 1813306)
A decent first approximation is [Expected age of death - Current age] x yearly pension.

So a 40k yearly pension at age 60, expected (statistically) to die at 90, works out to 1.2M.

Thanks. Is that with COLA?

Totoro 12-18-2016 05:43 AM

Yes, with COLA equal to inflation.

This makes many assumptions, so just a first approximation!

TNBound 12-18-2016 06:47 AM

Very small networth when ER ?
 
I cheated because our retirement system runs an analysis including the COLA. It's set at 3% compounded annually, which means by year 14, my COLA rate is 51%, 1/2 my base pay and at 23 years, with the COLA, my base pay actual doubles. Another reason to retire early and get this compounding factor working for me. It's crazy, but I'm sure not arguing. My job is to live a long life!!

TNBound 12-18-2016 06:54 AM

2017ish, how are you liking TN and what area are you in?

2017ish 12-18-2016 10:57 AM

Quote:

Originally Posted by TNBound (Post 1813444)
2017ish, how are you liking TN and what area are you in?

Nashville (since 2004)--not retired yet, but we'll be staying here. Currently have house with land in growing area; plan to move into smaller place in heart of city whenever we get bought out. Will enjoy doing concerts/bars/restaurants etc. without 30 minute drive home.

Very different from East Tennessee, which we plan to see and experience more of in the future.

Capwest28 12-18-2016 03:25 PM

Quote:

Originally Posted by REWahoo (Post 1811584)
No, it's a fence post.



[emoji23][emoji23][emoji23][emoji23][emoji23][emoji23][emoji23][emoji23][emoji23]🤣[emoji23][emoji23][emoji23]

Ronnieboy 12-18-2016 04:31 PM

Quote:

Originally Posted by ExFlyBoy5 (Post 1811941)
Not to beat a dead horse, but for a lot of folks (military/police/fire) this comes at a HUGE cost. Missed holidays. Missed birthdays. Missed anniversaries. Missed special occasions. Debilitating injuries at a young age. Shorter life span. Point being, this isn't a "free" benefit...it is a decent return of investment that can have a VERY steep initial cost. Just saying. ;)

I don't begrudge anyone their earned pension, in fact, it is a little envious reading about it in some of these posts. I always felt that it was, as mentioned in another post, part of the salary as it seems that job(s) that are the same as mine in a different sector is paid a lower bases salary but a pension is earned. Sometimes it is hard to see the future benefit of said pension when you are just starting out. Just like my kids said when I made them start their ROTH Ira at 16 with their first job, "65 is so far away!!"

Having said that, my current non pension job has the lovely disadvantages of the bolded above.

Teacher Terry 12-18-2016 06:50 PM

WE each have a 20k pension with cola. However, our health insurance is very expensive at 10k/year. We also have savings and a lot of equity in our home. WE made lower wages to work in government for the pensions and it was a good trade off.

eastnortheast 12-19-2016 01:56 PM

Quote:

Originally Posted by Johnora (Post 1812044)
As I stated there are many different definitions of what makes up a Net Worth. I have heard even professionals say you shouldn't add in your value of your house. When it comes to pensions it can be a struggle to determine what the net worth is even though their are pretty simple formulas that can estimate what your pension value would look like as a net worth.

Personally is our case if you looked at what kind of retirement account balance you would need to get a 4% SWR to equal our pensions, it would be valued at around 2.5 million, but that is not universally agreed upon as a legit value by others.

It works for me and I believe you were correct in what you wrote as well, from my perspective.

More for fun than anytihng else, I track two net worths - a retirement net worth which is savings I will be able to use in retirement plus the net present value of my pensioin.

The second net worth is "all in". Retirement savings, net present value of pension, house value, college savings, HSA, etc.

Dont include social security in either calc.

For net present value of my pension, I use one of the annuity calculators on the web. For a lot of them, you have to input a $ amount, and it will tell you the monthly payment, so it is a bit bassackwards, but you can get an idea that way.

exnavynuke 12-19-2016 03:50 PM

Quote:

Originally Posted by eastnortheast (Post 1813955)
More for fun than anytihng else, I track two net worths - a retirement net worth which is savings I will be able to use in retirement plus the net present value of my pensioin.

The second net worth is "all in". Retirement savings, net present value of pension, house value, college savings, HSA, etc.

Dont include social security in either calc.

For net present value of my pension, I use one of the annuity calculators on the web. For a lot of them, you have to input a $ amount, and it will tell you the monthly payment, so it is a bit bassackwards, but you can get an idea that way.

What rate do you use when calculating NPV for your pension?

NW-Bound 12-19-2016 04:03 PM

Quote:

Originally Posted by travelover (Post 1813273)
A properly funded pension plan should not depend on ongoing contributions. It should operate just like your 401(k), except is takes advantage of the fact that some retirees will die young, leaving money to cover those that obstinately continue to live past their due date.

But instead of using reasonable projected investment return rates like we do, don't they use 7 to 8% nominal rate of return? Some used to use an even higher number, like 9%.

For example, CalPERS, the big California Pension Fund, uses a projection of 7.75% nominal return against a 3% inflation. That 4.75% real return seems easy but has not been achieved in the last 20 years.

travelover 12-19-2016 06:01 PM

Quote:

Originally Posted by NW-Bound (Post 1813986)
But instead of using reasonable projected investment return rates like we do, don't they use 7 to 8% nominal rate of return? Some used to use an even higher number, like 9%.

For example, CalPERS, the big California Pension Fund, uses a projection of 7.75% nominal return against a 3% inflation. That 4.75% real return seems easy but has not been achieved in the last 20 years.

Yes, and shame on them. Where is the line between incompetence and criminality?

NW-Bound 12-19-2016 07:28 PM

Well, this is off topic but as I started this side discussion, please allow me to finish it.

The projection of 7.75% nominal return over 3% inflation was quoted from an article that was critical of CalPERS's actual performance of only 7% over the last 20 years. So, I went to CalPERS Web site, and they confirmed that 7% number.

But, but, but the inflation has been below 3% in recent years. So, I looked that up and the cumulative inflation in the last 20 years, when annualized, worked out to only 2.15%/year.

So, the real return is 7%-2.15% = 4.85% against the 4.75% projection. What is the problem then?

Perhaps it is one of those bad sequences of return (the return is not the same every year). An individual can do variable withdrawal during lean years, but that's not an option for a pension fund. There might be some other factors that one needs to dig down to comprehend. Even the Federal government underestimates the cost of many social programs, so this is not uncommon.

And by the way, I found that the current projected return is "only" 7.5% instead of the old 7.75%. This also caused an outcry that it was still not realistic. The pension consultant firm has recently suggested that 6.2% is a better number for future returns (no mention of the inflation number).

CalPERS funded ratio is now about 73%.

HMMY 12-20-2016 11:40 AM

Parents retired at FRA with only SS at $1200/mo combined. Their house was worth about $200k with a $40k mortgage, which would be a net worth of $160k. Given that they were too young to reverse mortgage at an acceptable payout rate, it generates no income. (Thus I would argue that one should talk about investible assets instead of net worth.) Although they live in a LCOL area, $1200/mo doesn't cover their expenses. Their retirement is SS supplemented by a monthly allowance from their children. Big ticket expenses (car, roof, deck replacement) are also covered by the kids.

Sunset 12-20-2016 11:59 AM

Quote:

Originally Posted by ExFlyBoy5 (Post 1811941)
.....
Not to beat a dead horse, but for a lot of folks (military/police/fire) this comes at a HUGE cost. Missed holidays. Missed birthdays. Missed anniversaries. Missed special occasions. ........ Point being, this isn't a "free" benefit...it is a decent return of investment that can have a VERY steep initial cost. Just saying. ;)

there are a lot of folks who also work and miss holidays, birthdays, anniversaries due to work and they don't even get a pension, many have to work even when sick as there is no pay for no work.

Not trying to take away anything from others, just pointing out it's not all bad, and some have it worse or just as bad.:coolsmiley:

Bigdawg 12-20-2016 02:04 PM

Quote:

Originally Posted by Sunset (Post 1814215)
there are a lot of folks who also work and miss holidays, birthdays, anniversaries due to work and they don't even get a pension, many have to work even when sick as there is no pay for no work.

Not trying to take away anything from others, just pointing out it's not all bad, and some have it worse or just as bad.:coolsmiley:

We all have free will. Make our beds then sleep in them. Spent one Christmas on barracks duty, one in Okinawa, one in Somalia and one in Sadr City. All my choice. I willingly did that knowing that I would rate a pension after 20 yrs. We can all take steps to change our situations and futures. After hours education/training, start your own business, learn a new skill, apply for a different job, get a second job, marry rich, save-invest-ER, etc...

Good luck.

Teacher Terry 12-20-2016 03:09 PM

Hmmy, can the kids afford to help or is this a burden to you guys? If it is they could sell the house and live off the profits and then go into low income senior housing once their $ is gone.

HMMY 12-20-2016 03:23 PM

Quote:

Originally Posted by Teacher Terry (Post 1814265)
Hmmy, can the kids afford to help or is this a burden to you guys? If it is they could sell the house and live off the profits and then go into low income senior housing once their $ is gone.

I have been contributing nearly 30 yrs (they ran into financial troubles long before they retired), but we each contribute based on our ability and willingness. I used to consider it a burden, but now I just accept its part of my annual expenses to FIRE.

NW-Bound 12-21-2016 02:14 AM

Quote:

Originally Posted by NW-Bound (Post 1814046)
...CalPERS funded ratio is now about 73%.

A correction is in order. The 73% number above is outdated. The current ratio is 65%. This means the pension fund has only 65c for every dollar it needs to meet the promised benefits.

Senator 12-21-2016 06:50 AM

Quote:

Originally Posted by aaronc879 (Post 1811652)
No such thing as "too young" to retire. If you have enough money then you can retire. I would have retired at 18 if I could. I'd retire tomorrow at age 37 if I could afford it.

When I was a Section 8 landlord, all my tenants were retired at age 18...:nonono: Better healthcare, decent housing, free transportation and free legal. Even free Christmas presents.

The only disadvantage was choice.

Senator 12-21-2016 07:32 AM

Quote:

Originally Posted by Enuff2Eat (Post 1811510)
It seems like lots of folks here retire early with a massive of net worth. I like to see if anyone actually pull the trigger with a small networth.

would you share your networth (asset) and age when you pull the trigger?

Retired at 56. DGF at 44. Probably could (or should) have done it sooner. Well over $3M. I came from a very humble, single parent beginning, sometimes I cannot even believe it is real. I have way more than I need, but I am ramping up my spending.

DescriptionAnnualMonthly
Non-COLA Pension at age 65$15,144$1,262
VA Disability$1,598$133
SS at 70 ($1,698 at 62)$36,060$3,005
Rental income ~$330K gross, ~$165K net$165,000$13,750
Total $18,150
   
Assets  
Investable assets$1,300,000 
Rental equity$1,700,000 
Residence equity$250,000 
DGF assets$600,000 
Total$3,850,000 

Free VA Healthcare for me. Free MinnesotaCare for the DGF.

DGF of 26 years a small pension and SS coming in 10+ years.

beowulf 12-21-2016 08:03 AM

Quote:

Originally Posted by Bigdawg (Post 1814240)
We all have free will. Make our beds then sleep in them. Spent one Christmas on barracks duty, one in Okinawa, one in Somalia and one in Sadr City. All my choice. I willingly did that knowing that I would rate a pension after 20 yrs. We can all take steps to change our situations and futures. After hours education/training, start your own business, learn a new skill, apply for a different job, get a second job, marry rich, save-invest-ER, etc...

Good luck.

Gotta go with Bigdawg on this. We all make our choices and then have to live with them. Other person envy for what they receive for the choices they made in life seems to make a somewhat common appearance on ER.

Way back in the last century when I was 17 I decided to take Army ROTC as a college freshman, basically to just see what it was all about. This was at the height of the VN war and all my friends thought I was insane. But my dad, who had been an island hopper in the Pacific during WWII, told me that, if I was going to be drafted, I would be far better off becoming an officer than an enlisted man like he had been (drafted in Feb, 1942, discharged in Dec 1945). The thought of a pension for me at 17 was like thinking we would have cell phones or the internet. Wasn't on the radar.

Anyway, despite sometimes being sent to places I didn't want to go to to do things I didn't really want to do, it all worked out. And I wouldn't trade it for anything. And any benefits I earned - I earned. Now I have friends who say, wow, you get a guaranteed pension, SS, TFL, commissary/PX, etc. Why shouldn't we get the something like that? Simple - the military now, and then, is pretty liberal about who they will accept. A HS diploma (and that can be waived), general good health, no criminal record and a desire to serve are the way in. And I doubt that few, if any, of the young folks volunteering these days have any clue what they would receive 20 or 30 years from now.

I don't begrudge anyone their successes. I have friends from college who became hedge fund managers and retired in their 40s with more money than most of us can imagine ever earning. A few Drs, lawyers, etc., who have had similar successes, but most of them are still working and I'm retired. They either really like their jobs or have a lot of ex wives :coolsmiley:.

To sum it up, those of us, whether, military, LEO, teachers, firemen or any federal, state or local employee, who receive pensions, annuities, etc., earned them. What happens with these retirement systems in the future is unknown, but they will slowly disappear. These were our choices, what you did was your choice. Pension envy is an ugly burden to bear ;D.

Some of this was written satirically, some was not. But the topic never seems to get old around here.


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