OP, then according to your statement you're only worth as much as your life expectancy when considering g your human capital, or in other terms the amount your pension(s) give you over your life.
For me, my worth is how much time and quality of life I have remaining. That is my net worth. As long as I have time and health, my net worth is immense and I'll always be able to bring in income if that holds true.
So many people ignore the value of human capital as part of the total equation.
Not as much as I thought I would have... But not doing badly either. I have several rentals, paid off two of them, own my home too. My 401k is worth about what a basic starter home is. I cannot quit working but assuming I quit clubbing... I could work part-time and live off the net rent, wait until social security.
@londonguy - we don't get a government pension in the USA.
In private industry - we have to pay on our own. It's changed a lot - and the folks hitting retirement now mostly need to pay their own way through retirement. It will be a challenge for many coming generations too.
We get government Social Security benefits starting at age 62 (but full benefits staring at 65 or so) - but I think the max is about $2300/month and many people get less than that depending how much they earned, and thus paid in via taxes, during their working life - thus one barley gets by if depending on that alone and one doesn't have savings and/or investments.
The pension the OP is referring to is most likeky from his employer - employer pensions were more common till the late 70s but are the exception these days (usually industries that have unions, which are the minority, or government jobs)
When you said "worth ... dead" you had me thinking of Life Insurance more than Stocks & Bonds. That's the boat I'm in. I hope someone doesn't pull a 'MENENDEZ BROTHERS me. :(
Holy shit that's beautiful. For some reason, we think cops need to retire young with a large % of their wages in pension because they can't run after crooks in when they are fifty. Nice. Like there isn't a fucking thing a cop can do besides being on the street fighting crime. lol. A sweet deal for sure. Retirement around 50 y/o at 75% income with beni's is a sweet deal. Wish I would have paid more attention on career day at school. Well done man.
I moved all of my assets into an irrevocable trust when my wife was diagnosed with FTD ( fronto-temporal Degeneration) - similar to Alzheimer’s. I’ve been drawing $65k a year from a state pension for15 years and it’ll jump to about 85k if my wife pre-deceases me. Her 18k pension will go towards her nursing home care after the long term care insurance ($300,000) is used up. You younger readers should give some thought on how to prepare for the ravages of old age.
Not touching retirement funds. They'll sit till I die and the kids can have them, or I'll take what I need when the need arises. Live with SS funds now. Not a lot of disposable income, but there is really no need for much now. Maybe I should change my login here to ex-Clubber. :)
My plan is to hang around 3 years till I am 55 and get out with 85k-88 k before I get out of bed and find a part time job to bring me back to 100 k a year.
Retiring at 55 with $85k+ lifetime pension - that's outrageous for taxpayers to pay that while most taxpayers themselves don't have that luxury - it's like a freaking racket
if i had it to do again... work a government job or a public utility. as a teamster i recieve a pension butt it's a fraction of that. and unfortunately my 'spousal support' and medical wipes that out.
I assume there aren’t any Illinois State employees here. Their pension is based on the final year of pay, so everyone works OT out the wazoo in their final year. I know of a married couple who were guards at a state prison. Their combined pension is $500,000 per year. True story.
Congrats, CD, on your dick measuring contest entry on pensions. Judging from club reviews, you're a MA LEO. Anyone who doesn't live in a closet knows that private industry pensions (DB Plans) are on their way out being replaced (but not necessarily "fully") by DC plans like 401K match, etc. Many companies are freezing pensions for existing employees, or in worse cases using bankruptcy as a tool to terminate pensions.
Which leaves govt. employees as the last bastion of a good pension. (Both in terms of $$, and as a percentage of Final Earnings Average -FAE).
To keep the amount of fear level at a minimum for those with employer pensions, you must note that there is a PBGC that guarantees up to $5000/monthly of your pension is paid out. So if your company files bankruptcy it is separate from the liabilities of the pension. If the pension ends up being underfunded and unable to make payments to benefactors, the PBGC kicks in and guarantees the benefit up to $5k monthly, or less depending upon your agreed upon defined benefit.
It's true the DC plans are replacing DB(pension) plans, which is important for anyone looking at comparing which company to work for. If your organization plans on participating in a match and/or profit Sharing and it's a generous amount, that is a good benchmark. What is average? 6% is normal. If total employer contribution into a retirement plan is around 10% that will help long term retention of employees, because after they've been around 5-10 years the brain drain is less likely to occur because they will see that their 401k should be worth thousands if, not hundreds of thousands.
My 401k has grown to several hundreds of thousands due to mostly my contributions supplemented by my employer's contribution. If I was to buy an annuity with those $$'s it would be the equivalency of having a $3k-$4k/ month pension with the flexibility of drawing down the cash value if needed in an emergency, which pensions will not allow you to do. Since employer sponsored DB(pension plans ) have high contribution amounts to keep them solvent, companies that are transitioning out of them should be offering generous match/profit sharing for comparison sakes.
401k plans can be much better deals than pensions for younger employees. If someone starts work in their 20s, contributes 6% of pay, gets a match, and keeps their money in a diverse stock fund, they can easily have $1M accumulated when they retire. Depending on their pay levels, it might be $2M. Combined with SS, that’s enough to retire very comfortably.
On the other hand, if someone waits until their 30s to begin saving, the amount at retirement is about half.
"On the other hand, if someone waits until their 30s to begin saving, the amount at retirement is about half"
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Yep. Time value of money. In other words, not a good idea to piss away your money in strip clubs in your 20s. Right @FishStix?
The 7 largest government pensions in Illinois have an unfunded liability of $150 Billion. That’s equal to 5 years of state tax revenue from all sources.
By the year 2025, the annual pension cost for school teachers will be larger than the cost of teacher salaries in Illinois.
Forgot to mention. at 70 1/2 years old, I have to start taking out from my funds I don't access now. I'll leave it to my financial guy to determine how much to withdraw and what to do with the funds.
Bottom line, I'm happy I am in a place that I don't have to deal with money BS. I've found out in the last year and a half that other things in my life matter much more than money.
Clubbed, why leave it to your financial guy when all he does is use an online calculator that you and I can access for free. The RMD minimum distribution calculation isn't rocket science, it's readily made information for all of us at our fingertips, just like the majority of financial information via the internet.
I'm not calling you out Clubber, but when I hear of people in your situation defer to their "financial guy" it makes me think of them using a broker. We all know what the definition of a "broker" is?
Answer: you leave the meeting "broker" than before you met.
I'm a hundredthousandaire. Hopefully will be a millionair like you by retirement. Hopefully I can retire pretty early with enough to spend all my time banging hot girls.
And it is my opinion your guy provides you mostly lip service for whatever you're paying him. Financial services industry needs people to keep their heads buried in the sand and stay uninformed for them to survive, so that's none of my business too.
I am retiring on June 20th 2018 at the tender age of 60. i will have a combined pension/ dividends/ interest income of $102,000. Once i turn 70 I will have an income of 156000. You gotta' plan for this time of life if you want to waste 1200 a month in the clubs.
47 comments
For me, my worth is how much time and quality of life I have remaining. That is my net worth. As long as I have time and health, my net worth is immense and I'll always be able to bring in income if that holds true.
So many people ignore the value of human capital as part of the total equation.
No pension.........a couple of 401K's and a small business that will allow me to work as long as I care to do so.....
In private industry - we have to pay on our own. It's changed a lot - and the folks hitting retirement now mostly need to pay their own way through retirement. It will be a challenge for many coming generations too.
We get government Social Security benefits starting at age 62 (but full benefits staring at 65 or so) - but I think the max is about $2300/month and many people get less than that depending how much they earned, and thus paid in via taxes, during their working life - thus one barley gets by if depending on that alone and one doesn't have savings and/or investments.
The pension the OP is referring to is most likeky from his employer - employer pensions were more common till the late 70s but are the exception these days (usually industries that have unions, which are the minority, or government jobs)
What type of industry are u retiring from?
Seriously though why would I care? I'd be dead, I don't have any kids, and my wife would be engaged by the next weekend after my funeral.
Sweet! If I had to guess, you either work for the rail line or are a high ranker in the federal gov.
I would be tempted to take that and go live like a fucking king in Bangkok until I drank and fucked myself to death.
https://basspro.scene7.com/is/image/Bass…
Which leaves govt. employees as the last bastion of a good pension. (Both in terms of $$, and as a percentage of Final Earnings Average -FAE).
It's true the DC plans are replacing DB(pension) plans, which is important for anyone looking at comparing which company to work for. If your organization plans on participating in a match and/or profit Sharing and it's a generous amount, that is a good benchmark. What is average? 6% is normal. If total employer contribution into a retirement plan is around 10% that will help long term retention of employees, because after they've been around 5-10 years the brain drain is less likely to occur because they will see that their 401k should be worth thousands if, not hundreds of thousands.
My 401k has grown to several hundreds of thousands due to mostly my contributions supplemented by my employer's contribution. If I was to buy an annuity with those $$'s it would be the equivalency of having a $3k-$4k/ month pension with the flexibility of drawing down the cash value if needed in an emergency, which pensions will not allow you to do. Since employer sponsored DB(pension plans ) have high contribution amounts to keep them solvent, companies that are transitioning out of them should be offering generous match/profit sharing for comparison sakes.
FYI
On the other hand, if someone waits until their 30s to begin saving, the amount at retirement is about half.
=================
Yep. Time value of money. In other words, not a good idea to piss away your money in strip clubs in your 20s. Right @FishStix?
The 7 largest government pensions in Illinois have an unfunded liability of $150 Billion. That’s equal to 5 years of state tax revenue from all sources.
By the year 2025, the annual pension cost for school teachers will be larger than the cost of teacher salaries in Illinois.
Bottom line, I'm happy I am in a place that I don't have to deal with money BS. I've found out in the last year and a half that other things in my life matter much more than money.
I'm not calling you out Clubber, but when I hear of people in your situation defer to their "financial guy" it makes me think of them using a broker. We all know what the definition of a "broker" is?
Answer: you leave the meeting "broker" than before you met.
yachts ?
Let me put it this way, whatever he does, it is worth it to me and that is all that counts.
I'm sure there are things you might pay others for that would seem silly to me, but it is not my business how you spent your money.
SJG