What's the number?

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Originally Posted by Big Steve

My question for those who are throwing out $2M to $7.5M numbers and currently lack any likelihood of amassing that sum or anything near it: Are you on the work until you die plan?

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Just based on 401 K alone, if I retire at 65, with 4.5% growth figured in, I will easily hit my number. That is not taking into account my pension or my wife's 401K.
So yeah, my number is totally hittable by 50 or 55 if I wanted to retire.

I also have $$ from inheritance, and so does my wife. My kids will have money from us and their grandparents too. That is how our families role. Our great grandparents came over from Italy, Ireland, and Poland with nothing, and they made sure the family would never want for anything again. It is our responsibility to continue that. I know that will get the self made crowd in an uproar, but I am not afraid to admit it.

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Originally Posted by Big Steve

My question for those who are throwing out $2M to $7.5M numbers and currently lack any likelihood of amassing that sum or anything near it: Are you on the work until you die plan?

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Just based on the premise of the OP, I wasn't thinking in terms of earnings but what I would do if I won a small multi-million dollar lottery or hit the jackpot in Vegas. But in terms of where I am now, and if that trend continues, no, I won't hit the number I threw out there. And I wouldn't quit my job tomorrow if I ended up with a $1 million dollar after tax windfall either. Nor would $2 million cause me to check out of the rat race. But I sure would enjoy some heli-skiing every now and then!

Who knows what the country will look like in 20 years? I don't plan on working until I die but some times the best layed plans go astray...

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Originally Posted by DougW

But you had as I read it had the tipping point forced on you. You were forced off the track and had to decide ether to get back on it. Most of us its the point or number when you decide to get off the track and choice another. Its all about risk and reward. Every year you work means don't reduce that pot and increase it. That reduces risk. Of course that reduces the number of Tuesday powder days and increases the number of meetings you have to go to again talk about how we're going to buy those boilers and talk to that brainless contracts lady who has nothing between her ears.

If I was forced today to get off the track today it would be messy but doable.

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well I had that DB pension but thats cuz I got on the gravy train at 18 when a lot of you folks were lying on the beach, skiing, collect EI & screwing frat girls instead which is BIG cuz the money is there every month as long as I can keep breathing, but obviously I was "there" at 49 I just didn't know it and spent 5 yrs to very slowly become aware, I have slowly spent some of the money/built the machine which is selfsustaining and i spend more $ now than i ever did

the big reason I was "there" and didnt have to get back on the track was the minimalist existence which speaks to "NEED" and the fact that Canadians hold way too much debt because they are all buying too much shit they don't need, so I did it backwards starting with spending WAY less & work into more as i could afford to

Getting "off the track" is actualy more doable and less messy than you think IF you change your life which you ARE already going to do if you are quitting THE one thing that has defined you all your adult life

me,I don't have a plan or a clue, never did AND it being "the long strange trip" only looks good in retro-spect

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Originally Posted by XXX-er

the big reason I was "there" and didnt have to get back on the track was the minimalist existence which speaks to "NEED" and the fact that Canadians hold way too much debt because they are all buying too much shit they don't need, so I did it backwards starting with spending WAY less & work into more as i could afford to

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I see your point and I think I agree. No DB so my number is lump that I have to generate an income from so my risk. So I have to , no I choose to, limit my risk by getting ready by working an extra 18 months or so. Doing it in stages. Getting ready , getting rid of stuff don't need or want any more. Getting stuff do need. I need a better table saw and a pressure washer and a pair of Big Dumps. Reducing risk by not budgeting for things but getting them done. Build a barn , getting kid started post grad.

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Originally Posted by Big Steve

Need?

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Need , yes , what people think they "need". My wife needs to have a horse. That means 200 bales a year. But that horse only needs to cost $3000 or so and she does her own trimming. Those bales can be delivered or they can be picked up off field or enough labour put in so ~free. So all she needs is a horse , X-country skis , skis and a pass and some white wine and she's good. Though she doesn't want me to take up mountain biking because she thinks it will cut into her other needs.

I could live on 30K a year. But I need to ski. But I need to spend $150/month on booze. But I don't need to travel.

For me, it's more about annual income than money in the bank, as that is how our pensions work.

If it goes as planned, at 55 I will have $250,000 in the bank and an annual income of $40,000. if I go to 60, I can have $500,000 and $55,000 clear.

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Originally Posted by DougW

Need , yes , what people think they "need".
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need / choose / want

"NEED" is like you need basic food/clothing/shelter,everything else is a WANT and you get to CHOOSE so consider just how many things could not exist without the word "WANT" like ... amex or visa ?

Well amex is like cash but you get miles, that's not the problem.

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Originally Posted by AdironRider

Shit happens, but opening the doors just because the kid isnt happy is not the answer, that was more my point.

You still call the shots, and if your kid was going nowhere, on drugs, etc would you still have open doors?

At some point the responsibility it theirs. Thats not to say no matter what they cant move back in, but theres a time and a place type thing. To think someone needs to save up expecting their kids to boomerang is the wrong way to go about it.

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I have a stepson who has some issues. He has tried to make it on his own and failed twice. Brushes with the law, weed dealing resulting in a felony conviction. Some people have said we should let him sink or swim on his own. We can't do it. I bring him home, dust him off, try to get him going in the right direction and let him try to fly again.

This year will be interesting because my wife and I are travelling a lot. All I can say is each kid is different and you do what you think is best and pray it works.

Man a felony conviction for dealing weed basically means you don't give a shit, good luck bro.

If you're ever gonna get sick of it, now is better than later. If you don't care, hey have a nice day.

Seriously, a felony for weed this days means the kid practically wanted it to happen.

That being said, I can see how it would ultimately be tough to just shut the door on a kid, but shit if my kids out getting a rap sheet he can handle that on his own.

I felt like I was living like a king in my $100,000 house in a bad neighborhood in Salt Lake making about 28,000 a year.

I had a season pass or two, a cheap motorcycle, $5 drop-in hockey, season tickets to the ECHL team, midnight movies, mexican food and Dees at 2am. I had cheap cars and a UTA pass. I could ride the train to the top of the hill and cruise downhill laps on my bike all day long.

I had a ski bench with a bunch of cheap tools from harbor freight. I had a little garden with tomatoes and carrots and corn. I had grapes and plums in the back yard. I had dogs and cats. I had friendly neighbors who were delighted if I brought over some steaks, cheap beer, and corn for the propane grill. They had pot and liked to watch movies in the basement.

If I had that house paid for and a million dollars I'd seriously be the happiest guy you've ever met. Live on $30-40K interest indefinitely. Things get ugly, sell the house. If I get really old, start using the principle. Sheeeeeeeiiiiit.

Just the fact of not needing to worry about a normal job would leave a lot of time to buy and sell stuff or work a fun part time job if something came up. Could build motorcycles or restore cars or grow pot or something.

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Originally Posted by grrrr

For me, it's more about annual income than money in the bank, as that is how our pensions work.

If it goes as planned, at 55 I will have $250,000 in the bank and an annual income of $40,000. if I go to 60, I can have $500,000 and $55,000 clear.

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How does the cash double like that?

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Originally Posted by Benny Profane

How does the cash double like that?

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No shit- that is 5 years well spent.
If I stick it out with my current employer(or they stick it out with me- which is likely) I will get about $5800 a month from them. In 2040 dollars, that will be less than it is now, but it will pay for vacations or medicine, or food, or whatever, on top of what I am saving on my own.

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Originally Posted by iceman

Man a felony conviction for dealing weed basically means you don't give a shit, good luck bro.

If you're ever gonna get sick of it, now is better than later. If you don't care, hey have a nice day.

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It does take an infinite amount of patience. Occasionally, I run really low.

He has 12 months left on parole. Parole because he fucked up while on probation. In twelve months, he will have a record but not be reporting monthly. In twelve months, his driving privileges will be restored after a 6 year suspension. Will he make it on his own? I highly doubt it. Faced with making a good decision or bad, he will go bad every time. No doubt with his attitude he is heading for long term incarceration. I want to have a clear conscience that I did everything possible to intervene.

We have told him that in twelve months we are downsizing and he is on his own. After our little well deserved hiatus, we are buying a small condo. Sink or swim time.


On another note... it sucks that this was to be the great ski year for us and so far, not much snow anywhere.

Pretty hard to get a job these days. Much harder with a felony on your record and no driver's license.

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Originally Posted by YetiMan

I felt like I was living like a king in my $100,000 house in a bad neighborhood in Salt Lake making about 28,000 a year.

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J, man I seriously thought you had it pretty dialed there. I couldn't figure out why you were so unhappy with it, but you WERE unhappy, so props to you for making a change at least. I say go back, but then I don't know shit. That neighborhood was pretty mild, all you had to do was steer clear of the Tongans. But yeah you feisty. I get that. Story of my life too.

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Originally Posted by Benny Profane

How does the cash double like that?

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Defined Pension Plan.

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Originally Posted by 4matic

Defined Pension Plan.

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Yeah, I thought so, (pretty amazing how steep that curve gets in the fifties in most) but, there's two figures there - a cash value and an annuity. Which is it? Both?

The risk of defined benefit plans these days is that they often get redefined. It's been happening in the USA over the past few years and there's a good chance it will spread to our neighbors to the north. See http://www.cga-canada.org/en-ca/Rese...ons_index.aspx

yeah I just ran into this, the DB pension for IBM canada is only worth 92% of what they need so IBM wanted to take 10yrs instead of 5 yrs as mandated to fix the shortfall but the retiree's voted them down ...fix this sooner than later

IBM is making lots of money the stock price is way high and they can afford it

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Originally Posted by Big Steve

The risk of defined benefit plans these days is that they often get redefined. It's been happening in the USA over the past few years and there's a good chance it will spread to our neighbors to the north. See http://www.cga-canada.org/en-ca/Rese...ons_index.aspx

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Yep. Just ask any retired airline employees from [Insert your favorite merged/defunct airline here.] That guaranteed pension wasn't so guaranteed. Everything is negotiable.

Well, that's because the airlines declared bankruptcy. They're still covered by the PBGC for a max of about 55,000. Or, should I say, you, the taxpayer

AFAIK, PBGC has been funded by premiums charged to pension funds, not general revenue. So far.

Right, the airline defined benefit plans were rewritten in Chapter 11 plans. Expect more of that in other industries.

Some public sector defined benefit plans have been rewritten. Expect more of that.

Like many illusions that are constructed for us in these underwater times, PBGC is very underfunded, and will probably have to be bailed out.

Public pensions are not covered by PBGC. Those are the real problem, especially the health care to the grave benefit.

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Originally Posted by Benny Profane

Yeah, I thought so, (pretty amazing how steep that curve gets in the fifties in most) but, there's two figures there - a cash value and an annuity. Which is it? Both?

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Both. I got a buddy that teaches Community College and the have defined pension and a cash value. It's a sweet deal. The guy makes $140k and works 20 hours a week. Your tax dollars at work.

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Originally Posted by Benny Profane

Like many illusions that are constructed for us in these underwater times, PBGC is very underfunded, and will probably have to be bailed out.

Public pensions are not covered by PBGC. Those are the real problem, especially the health care to the grave benefit.

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Again, as I've stated before, that is the reason we HAD to bail out AIG. The consequences of failed AIG pension plans would have been far greater than the loans made.

I was sitting at the Doctor yesterday with a retired retail worker (grocery clerks). Mgt is proposing a complete cancellation of sponsored health benefits to pensioners.

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Originally Posted by 4matic

Both. I got a buddy that teaches Community College and the have defined pension and a cash value. It's a sweet deal. The guy makes $140k and works 20 hours a week. Your tax dollars at work.

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Waitaminute. Are you telling me, that, when he retires, he will receive BOTH a lump sum and a life annuity? First I've heard of this.

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Originally Posted by Benny Profane

Yeah, I thought so, (pretty amazing how steep that curve gets in the fifties in most) but, there's two figures there - a cash value and an annuity. Which is it? Both?

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The cash value is as of that age- so at 55 its what $250,000 in the example? Thats a one time payment. The annuity is starting then, going until death. The curve is so steep in the 50s because the mortality table goes up (or down, depending on perspective) pretty quickly once you pass 55 and then each year after 60.

The point is that the longer you wait, the more theyll pay you per year because you arent expected to live as long. From a pure accounting standpoint- they dont mind this because youre cash value (the 500K) is discounted an extra 5 years, so its present value is a bit lower than youd otherwise think, though in the current interest environment it doesnt get discounted a whole lot).
At the same time, working until 60 rather than 55, you obviously work for 5 more years, which increases your benefit service time AND those 5 years are probably at a higher wage/salary. So when they multiply the benefit svc time by the Final Average Salary component (plus an interest component on it all, if applicable) it can jump pretty quick.

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Originally Posted by Benny Profane

Waitaminute. Are you telling me, that, when he retires, he will receive BOTH a lump sum and a life annuity? First I've heard of this.

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No, it's a cash value DBP vs. a guaranteed monthly payment plan. Best of both worlds.

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Originally Posted by 4matic

Again, as I've stated before, that is the reason we HAD to bail out AIG. The consequences of failed AIG pension plans would have been far greater than the loans made.

I was sitting at the Doctor yesterday with a retired retail worker (grocery clerks). Mgt is proposing a complete cancellation of sponsored health benefits to pensioners.

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You sure we weren't just bailing out Goldman, too?

Yeah, pensions are very difficult to terminate, but promised private retiree health plans can be dropped in a flash. As I stated a few pages back, my retiree health plan has almost doubled in cost twice over in five years. If it continues at that pace, I consider it good as cancelled soon.

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Originally Posted by Benny Profane

Waitaminute. Are you telling me, that, when he retires, he will receive BOTH a lump sum and a life annuity? First I've heard of this.

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Depends what kind of plan. You can have a regular pension (DB plan) and then something like an add- on plan for certain workers who are in a certain group (a frozen plan from a previous company, specific union, whatever) which could have a cash value aspect. The DB itself has a cash value as well, and you can take a lump sum or annuity in most plans.

Or you can have different payout options...where you get part in a lump sum and part in an annuity

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Originally Posted by Benny Profane

Public pensions are not covered by PBGC. Those are the real problem, especially the health care to the grave benefit.

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Correct that PBGC doesn't cover public sector PPs. I agree they are the bigger problem, but the vulnerability of private DB plans is a problem, one that is likely to have a profound ripple effect on the economy. I also agree that PBGC cannot forever rely on fundings via premiums unless legislation is passed under which private DB plans can be rewritten without the necessity of Chapter 11.

Retired military health care benefits are killing us and politically untouchable. We're fucked

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Originally Posted by Brock Landers

Depends what kind of plan. You can have a regular pension (DB plan) and then something like an add- on plan for certain workers who are in a certain group (a frozen plan from a previous company, specific union, whatever) which could have a cash value aspect. The DB itself has a cash value as well, and you can take a lump sum or annuity in most plans.

Or you can have different payout options...where you get part in a lump sum and part in an annuity

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Well, I worked for a pretty good company, and my choice was one or the other.
Funny. I had that choice in '08. Saw it coming, and mulled it over for a few years, conferring with many. Thought I could do better than the boring annuity return. I was so smart. Thank the lord I was talked out of that. I would have lost at least a third in the market.

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Originally Posted by Benny Profane

Well, I worked for a pretty good company, and my choice was one or the other.
Funny. I had that choice in '08. Saw it coming, and mulled it over for a few years, conferring with many. Thought I could do better than the boring annuity return. I was so smart. Thank the lord I was talked out of that. I would have lost at least a third in the market.

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At the time of payout, its all "actuarially" equivalent. Choosing one or the other versus having a mix is also equal, having no bearing on how pretty good your company is. Its just a matter of choice in the HR department...to a degree...though having a lump sum option is an aspect to take into account when assessing the health of the plan, as taking a lump sum especially in a low rate environment (like now) can affect the funding status harder than an annuity. Take 500K out now versus 4K a month...just a cash flow issue. But most companies offer lump sum so its not a big differentiator. The mix option is just a question of preference, though some of the plans Ive seen actually did offer it.

EDIT- however Im not sure if thats even the plan 4M is talking about...it may be a separate plan the guy is eligible for.

Well then, if this hybrid payout is available to any public plan employees here(grrr?), I'd definitely take all cash if possible and invest very conservatively. Doubt that money will be around in ten years.

I don't have a number.

I enjoy my work, and plan on doing it until I can't. IME, it seems that those who "retire", don't stay as sharp.

Inevitably ending up in front of the window, wondering who is driving up the street.

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Originally Posted by Brock Landers

EDIT- however Im not sure if thats even the plan 4M is talking about...it may be a separate plan the guy is eligible for.

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Honestly, I don't think my buddy knows exactly what he has.

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Originally Posted by stevesmith7

Here's my take. Everyone I've told this to says I'm way too conservative with this but then after they think about it for a while usually end up agreeing.

I = amount you need to cover everything in a year.
N = number of years you plan on living.


You need I x N.

That's it. If inflation is zero (not likely) then with zero investment returns you'd just spend 1/N of your nest egg every year. With real inflation you'd need to invest so that your after tax return on the whole sum is equal to inflation. This is not that easy to do without risk that you don't want to take. Adjust the number up or down to match your perceived ability to meet/beat inflation after tax.

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I've been thinking along the same lines. The only difference is that I hope that I can get low risk investments that keep up with inflation.

N is hard to calculate and what happens if you get to N-1 and say "holy shit I'm still alive and only have I in the bank?" Do you plan on living till 80, 90 or 100? There was a 106 year old guy on the news this morning that is still working on looking good.

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Originally Posted by iceman

J, man I seriously thought you had it pretty dialed there. I couldn't figure out why you were so unhappy with it, but you WERE unhappy, so props to you for making a change at least. I say go back, but then I don't know shit. That neighborhood was pretty mild, all you had to do was steer clear of the Tongans. But yeah you feisty. I get that. Story of my life too.

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It's a long story. The few times I explain it to people in detail they're always amazed at my string of awful luck and they usually then explain how they just figured I was a lazy asshole until they heard the whole story of my life. That phase of things involved a lot of grief over losing my longtime GF and kids and moving into a job I absolutely hated. I was lonely and pretty bummed out missing my friends and feeling like I'd made a big mistake moving. It took a lot of time to come to terms with moving to Utah, because I hated the politics of the place and, can't say this enough, had a rotten job. It's a long story and there's more to it than that. I liked the skiing, but working nights was challenging for my social life and my overall well-being. I would probably move back to Utah if my girlfriend would move, but she's dead-set on staying in Canada and I can't really argue with it b/c she had really good care for her cancer over the last year and a half and she's uncomfortable leaving that healthcare system. So, working on moving up there, which is quite the process for uneducated, poor Americans...let me tell you.


As for the neighborhood, there was a lot that went down in the 5 years I lived there. It's not a falling-apart nasty ghetto like on the east coast or the midwest, but there's a lot of crime in that part of the city and there was a lot of shit that went down next door with the meth dealing and the prostitution. I doubt if you had a meth dealer and prostitutes coming and going 20 yards from your front door you'd call that a good neighborhood. I had liberian refugees across the street. I had a SWAT standoff 100 yards away, there was an ATF raid 2 houses away. One of the houses up the block was condemned for being a meth lab. There was a place that exploded and left a huge crater and ruined several adjacent houses. etc etc etc. I had armed US marshalls in my back yard chasing a fugitive. We had some crazy neighborhood search for a little kid that got murdered. There were always new mexican gang tags in the alley behind my house.

on and on and on.

That said, If I didn't have to work 500 hours of overtime for it in a job I hated, that level of income and that kind of a living situation would be quite sufficient. Maybe I have a secret millionaire uncle waiting to leave me my million so I can kick it old school with SFB and McMannng in the sollilot and play endless games of drop in hockey at the cottonwood and murray. Downhill laps on UTA trax, midnight movies, living the good life.