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People talk about pension cash flow being the equivalent of what a million dollars can produce but that is very different then having a million dollars saved .....
At a 4% draw the million dollars saved can generate that cash flow and 30 years later have more left over 90% of the time, than you started with.
So you can have that pensionized income from that million dollars BUT you also can end with more than the million you started with left ....that equivalent pension dies with you or your spouse ....so there is still a big difference between cash flow generated via a portfolio vs an equivalent cash flow via a pension
Yes, I agree. Even though my pension is cost of living adjusted, in theory, I have a good chance of being able to increase my withdrawals faster than the rate of inflation inflation if I want to. However, that wasn't my primary reason for saving/investing.
My primary motivations for saving were:
1. I didn't know if I was going to be willing/able to work for a full 25-30 years to max out a pension.
2. I don't trust other people to take care of me. That turned out to be a good instinct because the pension benefits were reduced even for long time employees due to a 12% pay reduction several years back (Highest year's pay is a major function of the benefit formula. It took us 6 years to exceed the pay cut).
3. I wanted the flexibility to change jobs/locations if I wanted to without having to think "I have to work X number of years at this employer to get a decent retirement". Initially, I was hoping to be retired/financially independent by age 48, but I'm 49 now and couldn't comfortably retire in my high cost location if I quit tomorrow. However, I still have a level of financial security / flexibility that most people don't have. I'm semi-financially independent at age 49. Not awesome, but not bad.
How many of your co-workers are putting aside extra like yourself? Or are most spending their paycheque and relying on their pension? If I was lucky enough for a gov't pension I wouldn't save and invest as much as I currently do that's for sure.
I'm a public sector worker, and will be getting a pension when I retire. I damn sure am socking away money - as much as I can. You never know what the future holds.
A: There was approximately $1.70 trillion in circulation as of January 31, 2019. This figure includes Federal Reserve notes ($1,655.2 billion), U.S. notes ($0.2 billion), currency no longer issued ($0.2 billion), and coins outstanding ($47.2 billion).
U.S. Population = 329,217,343
Estimated $5,042.26 per capita in circulation
When the music stops, good luck in "cashing out."
Better still, a "dollar bill" has no par value and is not a "dollar" as defined by the Coinage Act of 1792.
A: There was approximately $1.70 trillion in circulation as of January 31, 2019. This figure includes Federal Reserve notes ($1,655.2 billion), U.S. notes ($0.2 billion), currency no longer issued ($0.2 billion), and coins outstanding ($47.2 billion).
U.S. Population = 329,217,343
Estimated $5,042.26 per capita in circulation
When the music stops, good luck in "cashing out."
Better still, a "dollar bill" has no par value and is not a "dollar" as defined by the Coinage Act of 1792.
I think this better fits in the economic forum with the rest of those who see only doom and gloom and the sky is always falling
It took me 50 years of life to hit a million ...but only 12 years to multiply it many times over ....the deals get bigger and you are privy to deals you would never have access to as you network
Your situation is unusual. More normally, whether one has $1M, $2M, $4M, $8M, $16M or whatever, there won’t be any magic doors opening. Having more money means cheaper stock-trades and a “personal advisor” at one’s brokerage. One gains access to funds that are “closed” to normal investors. But no special phone will ring, apprising one of some fantastic deal. There won’t be free tickets to the opera or a private viewing at the art-gallery or a black-tie dinner with some political candidate (well, unless you pay $5000/plate out of pocket).
A person gets hassled by the NYPD, frisked by the TSA, stared in vitriol by the bus-driver, blocked-in by the garbage truck, and otherwise importuned and disrespected by society, whether one is worth 8 figures in US dollars, or a thin wad of Venezuelan Bolvars. Money doesn’t buy access, special treatment or respect.
Thus my "fairy godmother" anecdotes about said fairy dropping $80M onto your pillow. Before that drop, I'd be a benighted dumb hick in a threadbare shack. After the drop, I'd be a benighted dumb hick in a threadbare shack with an $80M account at Fidelity... who suddenly can't sleep anymore, because he's mortified over how to properly shepherd and grow that $80M.
And worse yet, if your net worth is two old Buicks and an heirloom armoire, you can grow your net worth appreciably by accepting more overtime or replacing tonight's chicken-dinner with rice and beans. But post-fairy, not even a vice-presidency at Golman Sachs would make much of a difference.
But no special phone will ring, apprising one of some fantastic deal.
I very much remember a couple colleagues who made major money when the company went public ($35+ million) getting entree to early investment opps from some venture cap guys in Menlo Park. This was around 1998 and the venture money was flowing bigtime and they were part of some early rounds. I think they did angel investing after vesting into all their shares, selling, and retiring.
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I'm a public sector worker, and will be getting a pension when I retire. I damn sure am socking away money - as much as I can. You never know what the future holds.
