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Old 04-09-2019, 11:38 AM
 
Location: Moku Nui, Hawaii
9,451 posts, read 18,548,223 times
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As with all things, it's mostly a matter of balance and life is mostly gray areas, not a whole lot of sheer black and white.


Working a job merely for money and putting too much emphasis on retirement kinda demeans the present. Planning for the future is important and generally happens much nicer when it's planned for, yet, the only thing you actually have in life is the 'right now'.


For myself, at a young age, I chose a career instead of a job. And one which can be done into a fairly advanced age. Also one which can be done semi-autonomously. And pays pretty decent, although I don't work at it as hard as I could. I can think of several things which fit in this category, the specific one doesn't really matter.



Added to that is rental income, which while it isn't entirely passive, it goes for long periods without any input.



On the other side of the money is living below available means. Paying retail for things is avoided when ever possible. I find quality things will survive several lifetimes and being the first owner of it doesn't matter much to me. Kinda extra cachet if it's previous owner was someone worth thinking about. Somewhat similar to buying an already built and lived in house. Most of us see no stigma in that, just extend that philosophy to as many areas as possible.


Finding hobbies and interests that garner income can also do a lot towards creating 'passive' income.



Perhaps looking at it as 'how to create $50K a year in pleasurable income' may be interesting? Find something you like doing and see if you can get folks to pay you for either doing it or whatever it is you create. I'm thinking that may be why a lot of folks aspire to be musicians, even though historically they aren't paid well.
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Old 04-09-2019, 01:23 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
5,064 posts, read 3,867,440 times
Reputation: 6721
Quote:
Originally Posted by mathjak107 View Post
so many of my buddies left great paying jobs because of what they called "stress" ...

they had good pay , good benefits and after so many years were really off the radar as far as their work and being scrutinized ...

so they took their buy outs or early pensions and now have lower end jobs , with crappy pay , crappy benefits , the worst shifts , no seniority and ARE UNDER THE MICROSCOPE OF A GRUNT SUPERVISOR WATCHING THEIR EVERY MOVE
They have to be thinking of that mistake every morning when they wake up.
I knew someone who foolishly put every thing he had into one stock. It reached 2.7 million and I told him to sell, you're set for life. He sat on it because he was greedy and thought it would go up more. Ultimately it tanked and became worthless. He now struggles to get by.
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Old 04-09-2019, 01:25 PM
 
69,244 posts, read 69,867,145 times
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we all know knuckleheads that have made errors and it hurt them whether in business , real estate or equities .
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Old 04-09-2019, 01:34 PM
 
2,290 posts, read 3,542,039 times
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Sorry, but that Pension Formula you posted does not sound correct.


Michigan has one of the highest pay rates for teachers in the nation, and the Michigan formula is 1.25% multiplied by Credited Years of Service multiplied by Average of 5 Highest Years of Pay. Each year of seniority counts as 5/6 of a credited year since Teachers work 10 months of the year. So 30 years of Service equates to 25 years of Credited Service. The multiplier was 1.5% for years and was reduced ~6 years ago.


You are stating a 2.5% multiplier, no seniority reduction for credited years, maximum (final) year of pay, and your address is shown as Louisiana which is not known for high pay rates.


Verify all your formula factors so you are not unpleasantly surprised in 20-30 years time.
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Old 04-09-2019, 04:48 PM
 
7,492 posts, read 4,811,055 times
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It’s easy to burn out, coming to take the longstanding employment situation for granted. Over the decades, we come to get unbearably irritated by procedure, micromanagement, inanities of the institution, mandatory training, travel-restrictions, an office that’s too noisy, too hot, too cold. We grow jaded, disaffected, yearning to quit. So, after amassing a “requisite” capital, we quit… only to find that alternatives are even worse. This frequently happens to young people, who aren’t expected to know any better, and who have plenty of remaining time and vigor for a second chance. But what if this happens to you at 55, after a 30-year career? Suddenly it’s not so easy to reverse one’s actions, or to find comparable alternative. That, I think, is a serious handicap with retiring early… and thus, a serious mental burden, when even contemplating early retirement.
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Old 04-09-2019, 05:39 PM
 
Location: Gilbert, AZ
3,025 posts, read 1,842,779 times
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Quote:
Originally Posted by ohio_peasant View Post
It’s easy to burn out, coming to take the longstanding employment situation for granted. Over the decades, we come to get unbearably irritated by procedure, micromanagement, inanities of the institution, mandatory training, travel-restrictions, an office that’s too noisy, too hot, too cold. We grow jaded, disaffected, yearning to quit. So, after amassing a “requisite” capital, we quit… only to find that alternatives are even worse. This frequently happens to young people, who aren’t expected to know any better, and who have plenty of remaining time and vigor for a second chance. But what if this happens to you at 55, after a 30-year career? Suddenly it’s not so easy to reverse one’s actions, or to find comparable alternative.

Yes, exactly. I know an accountant who quit his job at age 60 without first looking for a replacement. AFAIK he's now "retired", being a bit naïve about how difficult it can be to find work at that age. Fortunately for him, his wife has a good job and a pension coming.
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Old 04-09-2019, 06:07 PM
 
Location: Shreveport, LA
1,190 posts, read 921,961 times
Reputation: 577
Quote:
Originally Posted by MI-Roger View Post
Sorry, but that Pension Formula you posted does not sound correct.


Michigan has one of the highest pay rates for teachers in the nation, and the Michigan formula is 1.25% multiplied by Credited Years of Service multiplied by Average of 5 Highest Years of Pay. Each year of seniority counts as 5/6 of a credited year since Teachers work 10 months of the year. So 30 years of Service equates to 25 years of Credited Service. The multiplier was 1.5% for years and was reduced ~6 years ago.


You are stating a 2.5% multiplier, no seniority reduction for credited years, maximum (final) year of pay, and your address is shown as Louisiana which is not known for high pay rates.


Verify all your formula factors so you are not unpleasantly surprised in 20-30 years time.
The pay is low partly due to cost of living. Adjusted for cost of living, teachers here make close to the median for the nation. I lifted that pension formula directly from the trsl website.
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Old 04-09-2019, 11:01 PM
 
1,074 posts, read 374,442 times
Reputation: 3276
Quote:
Originally Posted by GeoffD View Post
Max out your Social Security contribution for 35 years. Defer collecting it until age 70. That’s $46k of COLA-protected passive income that is largely tax free so it spends the same as a $50k 401(k) distribution. That’s the core of my retirement math.
This sounds good, and it would be if there was no other significant income.
But OP wants $50k passive income, which mjst be hedged for inflation, especially if you want out of the rat race before you turn into an old rat!

But when you have a relatively high passive income on top of SS your Medicare payments go up dramatically thru several tiers, depending on income. And the supplemental plans are even less stable.. who knows what those plans will cost thirty, forty years from now?

Currently for individual incomes of $107,000 up to $133,500 Medicare (B) premiums are ~$270/mo, for supplemental premiums run $230 and up, plus $25 or more for Rx coverage = $530+ per month.
They top out at over $400.
Now.

And at increased income levels %85 of SS income is taxable.
Now.

At 23 years old planning for 30+ years out is no small task. Just for a ballpark estimate consider that to accomplish the $50k safely today requires ~1-1.5 MM $$. Factor in a 3% inflation rate, itself an optimistic and I believe unrealistically low figure, and that should be your ultimate goal.
$4,220,790.

At minimum.
.. and barring some black swan or grey goose event.

Good luck, OP!
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Old 04-10-2019, 03:56 AM
 
Location: Thailand
5,652 posts, read 2,713,206 times
Reputation: 10545
Quote:
Originally Posted by aridon View Post
Health insurance from 55 to 65 will run you around 550 to 850 a month for catastrophic coverage. 10k deductibles and no co pays just all you up to 10k before insurance pays a cent. Who knows what will happen with subsidies.
If those subsidies exist (and they likely will in some form) his premiums will be about $370 for a silver plan, and that's assuming his $50k is all taxable income. If he's selling taxable he might sell 50k and have income of much less since his income would just be the cap gains, so his insurance premiums might be even lower.
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Old 04-10-2019, 04:19 AM
 
1,319 posts, read 454,689 times
Reputation: 1112
Quote:
Originally Posted by PamelaIamela View Post

Currently for individual incomes of $107,000 up to $133,500 Medicare (B) premiums are ~$270/mo, for supplemental premiums run $230 and up, plus $25 or more for Rx coverage = $530+ per month.
They top out at over $400.
Now.
Not sure how you arrived at those numbers that you posted above?

My last yearly salary was about $135K and my Medicare part B is $135, my United Health Care supplemental with a yearly deductible of $138 is $126 per month and my drug plan is 14.50 per month and covers two drugs taken daily with zero out of pocket costs!
FYI, I retired two years ago.

Last edited by Rickcin; 04-10-2019 at 04:40 AM..
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