Source of FIRE Funding

[bbuzzard]

Let's define FIRE as those who have retired before 55. If your medical care is paid by your former employer, please include that as part of your pension for this poll.

I get the impression that few of the FIRE'd in this group are fully funding their retirement from personal savings as opposed to pensions, I think because it is scary to be out there all alone (that is my biggest obstacle to FIRE). Am I wrong? Let's limit the poll to those who are actually retired.

 

[samclem]

Just to put things in perspective, I think it is important to remember that a pension is one part of a total compensation package. People who were already inclined to plan for retirement in general or ER in particular likely weighted these pension benefits heavily when making employment decisions. If pensions had not been available, many of these folks would have probably gone for employers paying the most, and would have saved even more. So, if many folks here are counting on pensions to make ER possible, it might be because having a pension makes this decision easier, but it is also at least as likely that people inclined to ER were drawn to pension-providing careers in order to achieve their goal. It would be inapproprate to view a pension as some sort of windfall.

(written by a pension-receiving semi-ER type)

 

[HFWR]

Not FIREd yet, but the answer is 0%...

 

[tryan]

Let's see ... ~$800/mo; 22 years from now will bearly pay the electric bill.

No bucket for .1% ... oh well. We'll round UP to 1%. :

 

[sgeeeee]

I'm retired at age 52 (DW at age 51). DW and I are both vested in small pensions, but will not be eligible to receive any benefits until age 55 (for half benefits) or age 62+ (for full benefits). Since the pension benfits are not COLA'd, the percentage of our annual cash draw that they represent falls every year. So today, the answer is 0% of our annual spending comes from pensions and it will remain that way for 3 to 13 years depending on when we decide to take it.

Based on some reasonable assumptions about spending and inflation, the pensions may contribute about 30% of our cash flow requirements the first year we begin taking benefits.

Based on similar assumptions and the assumption that I live to age 88 (from longevity tables), The pensions may contribute about 15% of my overall retirement cash flow over my lifetime.

 

[Wheel]

FIRE'd at 47, O pension (although I did have a 401(k), which seems to be more the "norm" in my experience. I'm paying Health Insurance Premiums. All being funded through my savings.

 

[FinanceDude]

I think more people have pensions on here than are willing to admit it...........

I read an article recently that state in 1980, almost 80% of Americans were covered by a pension, and in 2005, it was 16%...............

However, something tells me the average worker didn't get that memo, with the low 401K participation rates............

 

[Donzo]

I could of earned a decent pension if I had stayed on 5+ years longer w/ megacorp(till 55yo). Was'nt thrilled w/ the thought of spending another 10% of my life doing a job that was slowly killing me . So I jumped ship(thanks in large part to the feedback and reading this forum). I fund my retirement from my savings and find it MUCH less stressful than the megacorp treadmill.

 

[audreyh1]

I get the impression that few of the FIRE'd in this group are fully funding their retirement from personal savings as opposed to pensions, I think because it is scary to be out there all alone (that is my biggest obstacle to FIRE). Am I wrong? Let's limit the poll to those who are actually retired.

I think you'll find that quite a few of the very young retireds did it without a pension - because we didn't work long enough to get one! Some of us "got lucky" by owning a part of a successful business. This is different from personal savings.

Audrey

 

[FinanceDude]

I think you'll find that quite a few of the very young retireds did it without a pension - because we didn't work long enough to get one! Some of us "got lucky" by owning a part of a successful business. This is different from personal savings.
Audrey

I still thikn the quickest way to get to FIRE is to own your own business, and then sell out to partners or family when it's going well...........it has to cut 10-15 years off FIRE.............

 

[hellbender]

I'm not retired yet but getting very close. I will retire in March 2009 at age 55 with a federal pension which will fund approximately 135% of my living expenses.

 

[Sam]

I'm not retired yet but getting very close. I will retire in March 2009 at age 55 with a federal pension which will fund approximately 135% of my living expenses.

Nice, very nice. So what are you going to do with the extra 35%?

 

[rs0460a]

I think more people have pensions on here than are willing to admit it...........

Might be, but for me (as an "aging boomer") I started out at my current company in '79, when they had a pension.

Mid-80's they started offering the 401K (along with the pension).

Late 90's they dropped the pension; converted it to a "cash balance" plan (in other words, I get a lump sum when I leave, and am responsible for investing <or spending it!> it at that time).

So technically, I do not have a "defined benefit" plan (e.g. "pension").

- Ron

 

[hellbender]

Nice, very nice. So what are you going to do with the extra 35%?

Save it. Old habit.

 

[sgeeeee]

I still thikn the quickest way to get to FIRE is to own your own business, and then sell out to partners or family when it's going well...........it has to cut 10-15 years off FIRE.............

The quickest way is to be born filthy rich and inherit a fortune before you ever have to go to work. For those less fortunate, winning the PowerBall lottery at a very early age could work very quickly.

If I had had to start, run, and sell a successful business in order to retire I would have been miserable and probably would never have made it.

 

[Zathras]

Small business world, 0 pensions.
You don't necessarily need to create, run and sell a succesful business, you just have to be useful to someone who does

 

[OkieTexan]

Never had a pension.
All expenses are paid from savings.

 

[Kwirk]

Fed pension will meet all of our 'needs' but we plan to spend more than that. We just need a little luck to get there.

 

[Bikerdude]

I think because it is scary to be out there all alone (that is my biggest obstacle to FIRE). Am I wrong?

A pension is just an annuity. Most corporate pensions are not adjusted for inflation many Government ones are. So it's just a matter of saving the additional amount that it will cost you to purchase an annuity that will make you comfortable.

A pension like mine (not inflation adjusted) is easily duplicated with an immediate annuity. While I don't personally care for annuities they do have their uses. This could be one.

 

[audreyh1]

I get the impression that few of the FIRE'd in this group are fully funding their retirement from personal savings as opposed to pensions, I think because it is scary to be out there all alone (that is my biggest obstacle to FIRE). Am I wrong? Let's limit the poll to those who are actually retired.

So far - almost 60% are doing it with NO PENSION

Audrey

 

[mountaintosea]

I expect most of my needs will be paid for by the penison even though medical is not paid. But that fact has not kept me from saving like crazy over the last several years to provide an alternative source of income if needed.

 

[bbuzzard]

I am very suprised by the poll, assuming it is not self-selected. It is exactly the opposite of the results I expected.

 

[Alex]

not FIRE'd yet, but when I do, it will be without a pension.

 

[donheff]

I am very suprised by the poll, assuming it is not self-selected. It is exactly the opposite of the results I expected.

I see a fair number of posts from people with government pensions (including me) but it never struck me that they predominate. The board may actually self-select the other way. People with good, inflation protected pensions have less to worry/plan about financially and may not seek out a forum like this. People who have to DIY gravitate to a forum that can help them validate their planning.

 

[frayne]

Don't know how your poll would account for this type of funding but I rolled my pension lump sum along with a 401K into an IRA. Which I have yet to tap.