My plan to retire at 35

[FUEGO]

FUEGO. before you roll a pension cash balance into your 401k, look carefully at the plan. My cash balance will be modest in a year (no more than 40k), but I don't plan on rolling the money into my 401k. My employer offers the option to use 401k money to buy additional pension credit once you are drawing on the pension (I could do so as early as age 50). Depending on how this is priced, it could be a very, very attractive option, especially as there would be zero risk of pension default.

Mine has some option for buying back in later if you cash out now. That might be a decent option down the road for me. However I don't think I can buy more than the actual years of service I have at the time of my termination of employment. Which will be 5 years of service if I ER at 35. I believe my monthly pension amount at age 65 would be around $100 per month in 2013 dollars. If my employer doesn't somehow screw the plan participants. After I realized that COLAs are by legislative fiat and goodwill and not linked to CPI or anything, that really sealed the deal that I don't particularly want to do business with this entity any longer than I have to, so I plan to pull out the $25k or so. Of course I'll have to study the rules a little closer once I'm about to jump out of here.

 

[FUEGO]

Congratulations on accumulating 1.4 at 35 . What would happen if you retired into a bear market like the 2008 retirees ? We watched as our savings dropped by 30-40 % .$900,000 for 60 years without health insurance is a longshot especially with three children .

I would probably be thinking hard about going back to work if I retired into a 40% stock market drop within a year or two of ERing. Shouldn't be hard - just call the time off a sabbatical or whatever.

I would love it if the market was flat or down for the next few years as we continue accumulating, instead of this rip roaring bull market we are experiencing right now.

FYI, I'm 32 now and targeting that 1.4 million within 3 years. Based on what we have today plus what we will contribute over the next 3 years, we need a rate of return of around 0% real to get us to $1.4 million.