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Old 04-06-2017, 05:32 PM
 
14,982 posts, read 8,543,320 times
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That's why you move overseas guy.
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Old 04-07-2017, 12:05 AM
 
24,726 posts, read 26,794,844 times
Reputation: 22718
Quote:
Originally Posted by Lacerta View Post
Plan for that pension to SUPPLEMENT your other retirement savings, not to replace them entirely.
As a public sector worker, I can't emphasize the above statement enough.

Our pensions were reformed several years back. Even though I was grandfathered in to the more generous plan, our pay was cut by over 10%...This effectively also reduced pension benefits because our pension is based on our highest year's salary. I am not yet back up to the salary I had 5 years ago when our pay was cut, although I will finally surpass my previous high water mark for pay in July, 2017 (just barely). But we now pay a much higher percentage of our income into the pension plan as well. Back in 2011, it was around 10%. Now it's over 15%.

When I first started working at my employer, some old timers said not to worry about retirement because that would be taken care of by the pension. I'm sure glad I didn't listen to them!

I always tried to save as much as I could on my own, without counting on the pension.

20 years later, I am counting on the pension more than I would like--but I am far from completely depending on it. Salary deferrals into my workplace retirement plan (whether 401k, 403b, 457...all work fairly similarly), have now put my account balance to the point where I could semi retire, albeit in a cheaper area--and it would have to be very frugally. But I could live a decent lifestyle in a cheaper area on my savings/investments plus a part time job. That takes the stress level way down.

So keep paying off that debt...and start contributing to your 401k, 403b, or 457 retirement plan at work.

If you really want to retire early, save 50% or more of your after tax income. If you do that, you should be able to retire in 15-20 years, depending on the rate of return you get. Mr. Money Mustache has a great chart that shows the relationship between after tax savings rate and time to financial independence/retirement--whichever term you prefer. I prefer the term "financial independence" because most people think of retirement as something only people in their 60s do. Financial independence can come at any age, as long as you have the $$.

The Shockingly Simple Math Behind Early Retirement

I highly recommend reading the Mr. Money Mustache blog:

Getting Rich: from Zero to Hero in One Blog Post
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Old 04-07-2017, 06:27 PM
509
 
2,543 posts, read 3,747,109 times
Reputation: 2936
Quote:
Originally Posted by BucFan View Post
Tax burden by state. Purple is good, red/orange is bad.




https://www.axios.com/what-is-the-ta...345956480.html
The only problem with maps and studies like this is that everyone is different. For example, Oregon is a horrible state for retirement for well-off people or poor people with social security. BUT, if your a low-income government retiree it is a pretty good state to live.

So make a list of YOUR retirement assets and income streams and then use the individual state tax structures to see what the best deal is for you!!
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Old 04-07-2017, 06:31 PM
 
Location: Groznia
205 posts, read 119,892 times
Reputation: 221
$36,000 per year at retirement??? if your house and car are paid off then think of it this way...your maxi-min life span is 100 years old (if all is good and right with you and your health) and then you retire at 65 yrs... so 25 yrs x $36000 = $900,000...you are virtually a king among the poor...
If you are proposing that your dollar amount is adjusted for inflation year over year then your total payout is $1,386,004.40 (WHOOAA BOOKOO MULA!!! You're a Millionaire Right???!!!) however, adjusting that value back to the present day then that number will only be worth $572,681.00 in 2042 (if you don't invest it at a minimum RISK FREE RATE OF RETURN that is double the rate of inflation (so approximately 4% to 6% return...which is what you really need to do...))

Still pretty good but, if you still have payments like student loans or mortgages then think of your $572,681.000 (today's dollars) in total pension savings to be the same as $22,907.24 per year or $1908.94 per month which you'll have to budget and manage in order to remain solvent until your death...and don't forget your loving friends at the IRS :|
GuardarGuardarGuardar

Last edited by Countess Capital; 04-07-2017 at 07:57 PM..
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Old 04-07-2017, 07:30 PM
 
11,896 posts, read 14,364,183 times
Reputation: 7526
Quote:
Originally Posted by Submariner View Post
Yes, it is possible.

I served in the US Navy and I got the 20-year pension. I get $1,480/month [a bit under $18k/year].

During my Active Duty career, we were frugal and we invested hard. I retired with no outstanding debts. We liquidated our portfolio and bought our retirement home with cash.





Each of us has different motivations.

When I was in my 20s, a girl I was courting and I developed a vision for our future, which included living on a rural homestead in the woods. We got married and we focused on that goal ever since.

I am not motivated to earn a lot more.

I like this lifestyle. I am an organic farmer, my house is on solar power, my backyard is 1/4 mile of river frontage, I live in dense lush forest.

This is an extremely low COL lifestyle, in a low COL town. I do not earn enough to pay into Income Taxation, and as of this year the state decided to make military pensions tax-exempt anyway.



I have been retired for 16 years.
Out of curiosity, how much of your service in the Navy was on submarines?
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Old 04-07-2017, 08:11 PM
 
Location: Forests of Maine
29,723 posts, read 47,495,927 times
Reputation: 17577
Quote:
Originally Posted by pvande55 View Post
Out of curiosity, how much of your service in the Navy was on submarines?
9 years, and 2 years of schooling, and 3 years on a sub tender [repairing subs], and two 3-year tours of shore-duty [Law Enforcement].
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Old 04-08-2017, 12:39 AM
 
3,465 posts, read 1,983,736 times
Reputation: 7864
$36 for retirement? SURE,
BUT:

What will $36k buy in future dollars?

You won't retire on $36K in NYC, LA, SF, Miami or the like.

Find a small own with a nice COL to retire to if you cannot afford it in your town. You could live here where I lvie, we get by on less than $36K, and are considered "lower middle income"...

At least you now know what your pension will be, so you can start saving rapidly for and investing for retirement to supplement your retirement.

Plan accordingly!

At least you HAVE a pension to look forward to, i've never worked for a company with a pension that didn't require me to use my own money.

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Old 04-08-2017, 10:53 AM
 
Location: Groznia
205 posts, read 119,892 times
Reputation: 221
Sorry, I forgot to include what your yearly retirement salary (income stream) will look like if you don't invest in at least the risk-free rate of return and as inflation begins to eat away at it and take it toll (in dollars) on the final sum of $663,572.00; which is discounted to the present to reveal what that sum will be worth in 25 years which is $317,695.00 when you are 90 yrs old. You would have $1058/month as you are being admitted for assisted living and will no longer manage your own money:

$36000 34954.85 33940.0427 32954.6973 31997.9583 31068.9953 30167.002 29291.1952 28440.8149 27615.1227 26813.402 26034.9568 25279.1114 24545.2096 23832.6144 23140.7073 22468.8875 21816.572 21183.1945 20568.2052 19971.0702 19391.2712 18828.3049 18281.6826 17750.9298 17235.5857 $663,572.383
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Old 04-08-2017, 11:06 AM
 
Location: trapped in the body of a dying animal
3,174 posts, read 1,349,153 times
Reputation: 3177
Quote:
Originally Posted by Countess Capital View Post
$36,000 per year at retirement??? if your house and car are paid off then think of it this way...your maxi-min life span is 100 years old (if all is good and right with you and your health) and then you retire at 65 yrs... so 25 yrs x $36000 = $900,000...you are virtually a king among the poor...
If you are proposing that your dollar amount is adjusted for inflation year over year then your total payout is $1,386,004.40 (WHOOAA BOOKOO MULA!!! You're a Millionaire Right???!!!) however, adjusting that value back to the present day then that number will only be worth $572,681.00 in 2042 (if you don't invest it at a minimum RISK FREE RATE OF RETURN that is double the rate of inflation (so approximately 4% to 6% return...which is what you really need to do...))

Still pretty good but, if you still have payments like student loans or mortgages then think of your $572,681.000 (today's dollars) in total pension savings to be the same as $22,907.24 per year or $1908.94 per month which you'll have to budget and manage in order to remain solvent until your death...and don't forget your loving friends at the IRS :| [CENTER]GuardarGuardarGuardar[/CENTER]
Yep, I'd continue working and invest dat retirement income.
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Old 04-08-2017, 12:25 PM
 
Location: Las Vegas
13,433 posts, read 24,210,764 times
Reputation: 24745
Yes, you can. I understand wanting to know for sure that you CAN leave the rat race. My best suggestion to you is to start doing it now and see for yourself. Save\invest the extra money.
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