The accountant says we can retire early. Woohoo!!!

[CloverKnollFarms]

I would love to see how that's not going to backfire massively...

Oh it will, if it passes.

 

[CloverKnollFarms]

I think for most people in decent financial, debt, shape, $2M is probably a minimum target for savings. That will vary, depending on your zip code… but I sure wouldn’t want less.

 

[ultrarunner]

I think for most people in decent financial, debt, shape, $2M is probably a minimum target for savings. That will vary, depending on your zip code… but I sure wouldn’t want less.

2m seems to be the number excluding the family home…at least from the investment guys.

Family friend had a very good pension and planning his retirement as an airline pilot and the pension he was counting on did not survive in tact the airline reorganization…

I know it affected their plans on several fronts.

An old German Tool and Die man I worked with many years ago said his grandparents were well off… they sold their hotel not long before the German Mark became worthless… not worth the paper it was printed on… something you never forget…

 

[CloverKnollFarms]

Pilots were committing suicide when they lost their pensions… sad, criminal really. Those days are long gone.

Ours does not include the home and property, and we are completely debt free. I don’t plan on SS being any part of our retirement plan.

 

[Torvy]

How are getting around the IRS rule of 59 1/2 to avoid paying an extra 10% penalty on retirement funds withdrawal?

Due to this rule, I have began to stack non retirement funds in assets that can be drawn upon prior to 59 1/2 to avoid this penalty. I have a lot of rental propeties that will act like an substitute income free of any penalties.

Wife did something like this. Fixed annual withdrawal for 5 years. I was going to, but we managed to get by until I reached 59.5.

Need Cash From Your IRA Before Retirement? This New Rule Can Help - SmartAsset

An updated IRS rule allows the owners of IRAs and other retirement accounts to withdraw more money than before using a Substantially Equal Periodic Payment.

smartasset.com

 

[Torvy]

I know. That is why I said only profit basis are taxed.

If your living off the profits, how are they not being tax...twice.

In our case, we keep our 'income' low. We don't have any debt, so just living expenses and we aren't extravagant people.

Business expenses from the farm offset some of it.

Just paid nearly as much as I withdraw in a year to put in perimeter fencing. We don't typically depreciate the assets, just take it all at once.

 

[Torvy]

I always find it strange when people lament the old pension plans. 401k and the like are vastly superior. No worries about restructuring.

We live off of the investment income in those IRA/401k type accounts. Total assets including the farm might reach 2MM, but the investment portion is much less. We 'make' probably 90k a year between us in dividends and such. Only withdraw about 40-60k.

Do a very detailed budget. Use a spreadsheet and be honest with yourself. Include all of your vices. When in doubt, guess high on expenses and low on income.

Once you know the expense number, talk to your investment guy about how to make enough in the market to cover that, plus more.

We will draw SocSec at 62. You never know when you'll go. For most people, they will get more total at 62, YMMV.

That money will be gravy.

Really horrible that we couldn't have opted out. That ~15% of our income invested would have netted millions more than SocSec will return to us. I could have had a 2nd tractor!

 

[CloverKnollFarms]

Indeed. Pensions were not superior... But when a guy has literally MILLIONS coming to him and the Federal Govt wiped it out a few years prior to retirement, there is a reason to become depressed.

 

[ultrarunner]

I always find it strange when people lament the old pension plans. 401k and the like are vastly superior. No worries about restructuring.

We live off of the investment income in those IRA/401k type accounts. Total assets including the farm might reach 2MM, but the investment portion is much less. We 'make' probably 90k a year between us in dividends and such. Only withdraw about 40-60k.

Do a very detailed budget. Use a spreadsheet and be honest with yourself. Include all of your vices. When in doubt, guess high on expenses and low on income.

Once you know the expense number, talk to your investment guy about how to make enough in the market to cover that, plus more.

We will draw SocSec at 62. You never know when you'll go. For most people, they will get more total at 62, YMMV.

That money will be gravy.

Really horrible that we couldn't have opted out. That ~15% of our income invested would have netted millions more than SocSec will return to us. I could have had a 2nd tractor!

At last count 16 of my high school friends became police or fire fighters...

Their wages/income excellent with no 4 year degree and in their early 50's started to retire with 140 to 180k traditional pensions fully employer funded plus lifetime medical...

Several other have terrific pensions from ATT and PGE.

I've only had 401k and 403b and got screwed by every merger and acquisition loosing up to 80% of the match and profit sharing that was in my account but not vested due to no fault of myself because through each I was still at the same desk doing the same job...

This never happened to my friends with traditional plans...

 

[Torvy]

I have one 'pension'. First full-time job at a major bank. After I'd been there 5 or 6 years, that ended. Had to start investing for myself, but at a time disadvantage.

I never count public employee pensions as such because they are effectively immune to the mergers or financial failures.

I think your experience is more the exception than the rule. I worked for 4 or 5 companies with 401k style plans and only one had a 'vesting' period. The pension plan did. The money in the 401k is yours. Even when you don't have any employer match, it far outperforms SocSec.