Race from $2M to $4M...and Beyond!

[ysette9]

I’ll get a pension one day! I calculated the present value of it a bit back when I was switching employers to understand what I was walking away from if I didn’t stick with the pension system. The PV of my pension is $36k. I’m rolling in it.

[Dicey]

Perhaps I should have mentioned that DH's pension alone will generate enough for us to live on, not counting rental income, investments or SS. Crazy!

[ysette9]

What a wonderful position for you to be in.

[DavidAnnArbor]

Dicey you've rolled the dice and come up with a pair of sixes.

[RWD]

Dicey you've rolled the dice and come up with a pair of sixes.

Looks like a 4 and a 5 to me.  =P

[Exflyboy]

Damn Dicey!....:)

[JoJoP]

Wow Dicey, that means you're FREEEEEEE!  Enjoy your FI.

[Dicey]

Dicey you've rolled the dice and come up with a pair of sixes.

Looks like a 4 and a 5 to me.  =P

Hee, my thoughts exactly. I actually had to double check my avatar.

You guys, the best thing is that we were never huge wage earners I thought I broke $100k once when I was self employed, but the SS website says I'm smoking something. DH took a huge pay cut to take his current job, because of the excellent benefits. It is paying off beyond anything he ever expected. Also, a lot of guys try to goose their retirements by taking promotions they don't want or aren't suited for or they work tons of OT. DH can just keep cruising along, doing his thing until it's time to pull the plug. The biggest item we're holding on for is the generous healthcare package that retirees are eligible for.

[Fomerly known as something]

Dicey, I'm basically in the same situation.  I might have to take out less than $10000 above my pension to cover my basic living expenses (including paying the mortgage I'm not paying off.).  It really depends on COL raises until retirement plus how the equation ends up sorting out.  But I have 6.5 years left until I will qualify for subsidized health care for life. 

The funny thing for me lately is because I was hired young, I can retire young.  I've had a lot of older employees to including my boss tell me what I could do with a specific set of skills I'm currently developing as a second job/career.  I'm only developing these skills because they make my current job more interesting not because of a real interest.

[soccerluvof4]

Would of been so nice to have a pension. What is it now less than 15% of the Population has a pension I read. Another good thing going bye bye.

[JoJoP]

We've always been self employed, no pensions.  DH's younger brother worked for the fire department and retired a couple of years ago on 90% salary plus benefits.  The stark difference of our two situations was apparent that year.   I think our personalities are such that a corporate job wouldn't have been/wasn't  a good fit, but here, at the other end of a work career, we can't help but notice the difference.   Luckily we invested in rentals on our good years, and that's our Retirement Plan. 

[ysette9]

I never counted on my pension even when working at a place that had it, though I suppose it isn’t a bad thing to have. The people hired after me didn’t get pension but got additional money into a separate 401k-like retirement savings account. As they froze the pension for those of us who did have it the company started increasing the 401k contributions instead. Looking back on it I would have rather had the company put more money into my 401k from the get-go,  it I think for 90% of the people out there having a pension would be a much better thing than self-directed retirement savings.

[Car Jack]

I don't even really consider my pension as anything when tallying up my investments.  It's small, but something.  I'll be able to take a lump sum at 65, if I want or do the payments in various options to include my wife.  I'll have to talk with her about it as we get closer.  As I understand it, I can roll the lump sum into an IRA, but that adds to RMDs, so still not sure which way I'll go.  If I do 100% continuation for my wife, I'll get $300 a month at 65.  It actually drops if I wait longer.

[Bateaux]

My pension was yanked in 2012 after 20 years of service.  They froze it and started giving us more 401k contributions.   I'd probably be better off if I'd had the 401k, with extra contributions from the start.  That being said, I never trusted the company way back in the day to honor the pension.  It's just too expensive as the number of retirees grow.  It's an annuity so it does end with death of self/spouse.  The company started in the early 70s so it took a while for the retirees that started younger to start drawing money.  Only now do we hear of the deaths of those people who started then.  Pensions are basically pyramid schemes.  They pay the early users well and for later employees there is an empty bag.

[PhrugalPhan]

Like others here both the GF and I have pensions.  When I work up our worth I certainly include an estimate for their value.  Our investments are near the $2 Mil mark (nearly a 50/50 split), and if I had to guess our pensions' worth I would put them at near $1.5 Mil.  The pensions should cover 100% of our needs when I start getting mine (she has just started getting hers, I have to wait 4 more years).

She gets the subsidzed health care for life too, and both have COLAs.

I don't include my paid off house (gotta live somewhere), nor our paid off cars in our net worth, though you certainly can.

My biggest long term concern right now is taxes down the road.  With all of her withdrawals going to be taxed I'm trying to get as much of my savings into Roth style products as I can without raising my current taxes too bad.  Once we hit 71 and have RMDs, our yearly income (2 SSI, $70k+ pension, probably $100k+ RMDs) will be so high that taxes are going to be a major headache.  Once her son is out of college (in 2 years) we're going to be converting / rolling over money to Roth every year as much as is practical (10 year window).  Its a good problem to have I guess, but still, this is going to take some work to do it right.

[Bateaux]

After a şuckey week in the market, we just barely stayed above 2MM.  There is no such thing as slow and steady growth. 

[soccerluvof4]

After a şuckey week in the market, we just barely stayed above 2MM.  There is no such thing as slow and steady growth.

Got that right! ouch this weak!

[Taran Wanderer]

Bonus and profit sharing payments are pushing us over $2 million this month. With the market flat to down, it’s a good time to get these lump sums. As we cross this milestone, I find my motivation at work changing. I feel more freedom to tell it like I see it.  I look for opportunities to help those on my team perform and grow, and to showcase and recognize their work. Instead of taking on personnel pressure to get things done, I talk about our resources and priorities, and how we need more resources (people or money) if we have so many high priorities to get done.  I still want to accomplish big things, but I feel disinclined to set myself up for a heart attack while doing so.

So I wonder, will I race from $2 million to $3 million, or will I float?

[sixwings]

My pension was yanked in 2012 after 20 years of service.  They froze it and started giving us more 401k contributions.   I'd probably be better off if I'd had the 401k, with extra contributions from the start.  That being said, I never trusted the company way back in the day to honor the pension.  It's just too expensive as the number of retirees grow.  It's an annuity so it does end with death of self/spouse.  The company started in the early 70s so it took a while for the retirees that started younger to start drawing money.  Only now do we hear of the deaths of those people who started then.  Pensions are basically pyramid schemes. They pay the early users well and for later employees there is an empty bag.

When done properly this isn't really true. I work in pension administration and unfortunately a lot of companies kicked the can down the road. They were told for decades that contributions weren't high enough and they did nothing about it hoping to figure it out in the future. The plans I administer are all 100-105% funded but our contributions are quite high (mine are 9%, employer contributes 10%). My pension formula is 2% x years of service x average of 5 highest earning years. I was a conference a few months ago and some plan administrator from the US was bragging about their plan being 53% funded... 3% contribution rates just aren't high enough.

[DavidAnnArbor]

My pension was yanked in 2012 after 20 years of service.  They froze it and started giving us more 401k contributions.   I'd probably be better off if I'd had the 401k, with extra contributions from the start.  That being said, I never trusted the company way back in the day to honor the pension.  It's just too expensive as the number of retirees grow.  It's an annuity so it does end with death of self/spouse.  The company started in the early 70s so it took a while for the retirees that started younger to start drawing money.  Only now do we hear of the deaths of those people who started then.  Pensions are basically pyramid schemes. They pay the early users well and for later employees there is an empty bag.

When done properly this isn't really true. I work in pension administration and unfortunately a lot of companies kicked the can down the road. They were told for decades that contributions weren't high enough and they did nothing about it hoping to figure it out in the future. The plans I administer are all 100-105% funded but our contributions are quite high (mine are 9%, employer contributes 10%). My pension formula is 2% x years of service x average of 5 highest earning years. I was a conference a few months ago and some plan administrator from the US was bragging about their plan being 53% funded... 3% contribution rates just aren't high enough.

I really appreciate what you're stating here. I took an accounting class that included the very complicated subject of pension accounting. There were a number of factors that could combine together to necessitate the need to increase contributions to a pension fund, a bad year in the markets, a declining discount rate, etc.

[Bateaux]

Any of you guys do a Millionaire interview?   Podcast or YouTube?   My life is so boring I'd be the dullest millionaire on the planet.

[Exflyboy]

Any of you guys do a Millionaire interview?   Podcast or YouTube?   My life is so boring I'd be the dullest millionaire on the planet.

I almost called up Dave Ramsey once.. But nah..:)

[pecunia]

Any of you guys do a Millionaire interview?   Podcast or YouTube?   My life is so boring I'd be the dullest millionaire on the planet.

How about a million pennies?  Would that count?

[onlykelsey]

My pension was yanked in 2012 after 20 years of service.  They froze it and started giving us more 401k contributions.   I'd probably be better off if I'd had the 401k, with extra contributions from the start.  That being said, I never trusted the company way back in the day to honor the pension.  It's just too expensive as the number of retirees grow.  It's an annuity so it does end with death of self/spouse.  The company started in the early 70s so it took a while for the retirees that started younger to start drawing money.  Only now do we hear of the deaths of those people who started then.  Pensions are basically pyramid schemes. They pay the early users well and for later employees there is an empty bag.

When done properly this isn't really true. I work in pension administration and unfortunately a lot of companies kicked the can down the road. They were told for decades that contributions weren't high enough and they did nothing about it hoping to figure it out in the future. The plans I administer are all 100-105% funded but our contributions are quite high (mine are 9%, employer contributes 10%). My pension formula is 2% x years of service x average of 5 highest earning years. I was a conference a few months ago and some plan administrator from the US was bragging about their plan being 53% funded... 3% contribution rates just aren't high enough.

I really appreciate what you're stating here. I took an accounting class that included the very complicated subject of pension accounting. There were a number of factors that could combine together to necessitate the need to increase contributions to a pension fund, a bad year in the markets, a declining discount rate, etc.

If you ever want to be horrified, read Kentucky Fried Pensions.

That said, I'm considering going to work for one, so I'd be exposed to the risk both as an employee and as a beneficiary of the plan.  They're ~90% funded which is about as good as it gets now, I think.

[Dicey]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

[Bateaux]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

We did get warning letters telling us how many millions our pension was underfunded.   They had no choice, it's required by law.

Then, they legally froze the pensions.

[Exflyboy]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

We did get warning letters telling us how many millions our pension was underfunded.   They had no choice, it's required by law.

Then, they legally froze the pensions.

After today you're firmly back in the club no?

[Dicey]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

Ruh-roh. DH says they report there's $453M in their pension fund. He says they've been reporting the same number for nearly twenty years. His contribution was 6.75% when he started, but pension reform in 2013 bumped it to 8.75%. Trouble is, we have no idea what their projected liabilities are. DH says he'll look into it.

[onlykelsey]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

Ruh-roh. DH says they report there's $453M in their pension fund. He says they've been reporting the same number for nearly twenty years. His contribution was 6.75% when he started, but pension reform in 2013 bumped it to 8.75%. Trouble is, we have no idea what their projected liabilities are. DH says he'll look into it.

Is it a pension of a public company? government?  Might be able to help you find it.

[Dicey]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

Ruh-roh. DH says they report there's $453M in their pension fund. He says they've been reporting the same number for nearly twenty years. His contribution was 6.75% when he started, but pension reform in 2013 bumped it to 8.75%. Trouble is, we have no idea what their projected liabilities are. DH says he'll look into it.

Is it a pension of a public company? government?  Might be able to help you find it.

Thanks, I'll PM you if we can't find it. DH thinks he has access to it. He says he only remembers the total, because it doesn't vary much from year to year, which he finds suspicious.

[Bateaux]

Hmmm, I think we need to look into how well DH's pension is funded. Thanks for this!

We did get warning letters telling us how many millions our pension was underfunded.   They had no choice, it's required by law.

Then, they legally froze the pensions.

After today you're firmly back in the club no?

Oh yea.  Still in the club.  I've only crossed the 2MM investments line by a few tens of thousands.   I'm hoping to get a few hundred thousand past and will feel much safer.  I've all but decided that I'm waiting on the 2020 election to pass before FIRE.  So the Firehose is still filling the tank.   

[Threshkin]

Happily sitting in the middle of this demographic, give or take market fluctuations.

No pensions in our future but according to our current projections we turn net positive income from SS alone when we decide to start it.  Will probably hold out until I hit 70 provided our health stays good.  After that the nest egg just keeps growing.  Definite MPP.

[Exflyboy]

Happily sitting in the middle of this demographic, give or take market fluctuations.

No pensions in our future but according to our current projections we turn net positive income from SS alone when we decide to start it.  Will probably hold out until I hit 70 provided our health stays good.  After that the nest egg just keeps growing.  Definite MPP.

But are you sure you will have enough money?...;)

[Threshkin]

Happily sitting in the middle of this demographic, give or take market fluctuations.

No pensions in our future but according to our current projections we turn net positive income from SS alone when we decide to start it.  Will probably hold out until I hit 70 provided our health stays good.  After that the nest egg just keeps growing.  Definite MPP.

But are you sure you will have enough money?...;)

DW is not convinced.  She does not like market fluctuations at all.  Explaining why being down for 2018 didn't really matter was difficult.

[Exflyboy]

Happily sitting in the middle of this demographic, give or take market fluctuations.

No pensions in our future but according to our current projections we turn net positive income from SS alone when we decide to start it.  Will probably hold out until I hit 70 provided our health stays good.  After that the nest egg just keeps growing.  Definite MPP.

But are you sure you will have enough money?...;)

DW is not convinced.  She does not like market fluctuations at all.  Explaining why being down for 2018 didn't really matter was difficult.

Yeah thats a tough one.. Heck I had a hard enough time trying to convince myself!.. Fortunately my DW doesn't care about money..:)

[soccerluvof4]

Happily sitting in the middle of this demographic, give or take market fluctuations.

No pensions in our future but according to our current projections we turn net positive income from SS alone when we decide to start it.  Will probably hold out until I hit 70 provided our health stays good.  After that the nest egg just keeps growing.  Definite MPP.

But are you sure you will have enough money?...;)

DW is not convinced.  She does not like market fluctuations at all.  Explaining why being down for 2018 didn't really matter was difficult.

Yeah thats a tough one.. Heck I had a hard enough time trying to convince myself!.. Fortunately my DW doesn't care about money..:)

Yea fortunately I am in the same boat in that my DW leaves everything up to me and doesnt care about $  as long as I just keep saying were fine shes ok or trusts me. Sometimes I wish she would be a little more involved as shes probably smarter than me but better becareful what i wish for lol!

[Bateaux]

Well shit!  More money than I've ever had again!  Damn market fluctuations.

[pecunia]

Well shit!  More money than I've ever had again!  Damn market fluctuations.

Yes - It's nice to have that stock market working for you.  Question for you esteemed gentlemen and ladies:

Looking at the Dow Jones curve, it's been around 25,000 for most of 2018 and now 2019.  Could this be considered a new normal if there is such a thing?  The curve has been sort of flat since the end of 2017 except for the brief dip around Christmas.

I'd hate all the 2million dollar racers to slide off the track.

[Exflyboy]

Well shit!  More money than I've ever had again!  Damn market fluctuations.

Yes - It's nice to have that stock market working for you.  Question for you esteemed gentlemen and ladies:

Looking at the Dow Jones curve, it's been around 25,000 for most of 2018 and now 2019.  Could this be considered a new normal if there is such a thing?  The curve has been sort of flat since the end of 2017 except for the brief dip around Christmas.

I'd hate all the 2million dollar racers to slide off the track.

Well the point is we WILL slide off the track and frequently! Be that with $1M or $5M. When that happens its called a "buying opportunity"..:)

This is the new normal for a while most likely until growth in profits make the current stock prices more in line with history (stocks are arguably a little over valued right now). But when growth makes stocks look fairly valued the stock prices will rise again.

The problem is you don't know if stock prices will continue to rise from here based on emotion/animal spirits alone.. They might and DOW 25,000 might be a distant memory in a few months time.

[Bateaux]

/\

What he said.  We coukd park at 25k bouncing up and down for years or we could bound off past 30k

[EscapeVelocity2020]

Personally, to me, this doesn't feel like the 2000 crash (Greenspan warning about irrational exuberance) or 2008 crash (Bernake reluctantly telling Congress to throw an 800B TARP out and continue quantitative easing after ZIRP failed), this feels like everyone in control is rooting for continued growth forever.  The economy would probably do well with the Fed reducing its balance sheet, raising rates so that bonds made a good alternative to stocks again, and not having such crazy domestic and trade deficits.  If the rest of the world weren't in such turmoil, then the strong dollar would not be there to make pretty much everything US so appetizing.

I have a feeling I'm going to have to work pretty hard for the next million :)  But the second and third were pretty easy.

[soccerluvof4]

Personally, to me, this doesn't feel like the 2000 crash (Greenspan warning about irrational exuberance) or 2008 crash (Bernake reluctantly telling Congress to throw an 800B TARP out and continue quantitative easing after ZIRP failed), this feels like everyone in control is rooting for continued growth forever.  The economy would probably do well with the Fed reducing its balance sheet, raising rates so that bonds made a good alternative to stocks again, and not having such crazy domestic and trade deficits.  If the rest of the world weren't in such turmoil, then the strong dollar would not be there to make pretty much everything US so appetizing.

I have a feeling I'm going to have to work pretty hard for the next million :)  But the second and third were pretty easy.

I tend to agree ^.  The dips have also shown that there are a lot of people willing to get back in or new money people are wanting to get in wanting to start investing. The longer we sit here the more that money is building up.  With being near the higher end of the curve most people seemingly would want to wait or keep buying the dips. I personally believe that's why its been so flat. I do think we could go higher if a deal is done with China and something comes of the next North Korea meeting as the market has been moving on more on what comes out of peoples mouths then only companies performance. Or at least more than normal.  I also would like to see a rate increase to help as well and think it would create another dip for awhile for another buying opportunity. The market just continues to prove that nobody knows jack.

[Car Jack]

Well, just a note to mark clicking over the $2.4 mark in liquid investments as of today.  2018 was a horrible year for my family and black swan events cost a lot of money.  With all that behind now and actually earning more money than is going out, I put in our Roth contributions for 2018, completed my tax returns (good refund net) and have a far clearer path for the family.  Did the spread sheet update this morning and so long as we don't get a huge market tank, I expect the "4" will stick.

Out of our last year's events, I've decided to postpone retirement.  It's going to take a while for us to really settle down and accept that life is normal again anyways, so I'm not going to upset the wife with a big change.  I'm too old to retire "early" anyways, so there's nothing being really lost there.  I think I've resolved that the new number might be 65 as I can take a small pension at that point and our savings will easily hit 50X spending.  The house has been paid of forever and none of the cars have loans on them. 

Thanks for the MMM forum for having a venue to express the results of our continued frugal ways.  There isn't another place I know of where this is considered "normal".

[Exflyboy]

Great job @Car Jack ..:)

[JoJoP]

Hey @Car Jack , it sounds like the worst is behind you and things are starting to return to normal.  Hope all is well from here on out.   There's nothing wrong with retiring well at 65.  (We're not early Retirees either, DH just hit the big 6 5)  You've got a good plan and keeping the stress down at home after a stressful year is important.  You're taking care of the people you love.  KUDOS!  We're with you...

[Bateaux]

We're here CarJack.  Hope it smoothes out a bit.

[soccerluvof4]

Best of 2019 For ya @Car Jack ! Sounds like your in pretty good finacial shape actually great financial shape so hopefully thats not a stress er on ya!

I'm with ya on the taxes thing I got mine done and sent in to my accountant a couples days ago and feels good.

[ysette9]

My husband sent me a text late last night that read: “2,001,175!!!”

We are in the club, folks.

[Exflyboy]

My husband sent me a text late last night that read: “2,001,175!!!”

We are in the club, folks.

Woohoo...:)

[Bateaux]

My husband sent me a text late last night that read: “2,001,175!!!”

We are in the club, folks.

Alrighty!