Retirement

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SReh26
Posts: 212
Joined: Thu Apr 01, 2021 10:48 pm

#41

Post by SReh26 »

Bob cruise director wrote: Sat May 08, 2021 1:42 pm
SReh26 wrote: Sat May 08, 2021 12:09 pm
Bob cruise director wrote: Fri May 07, 2021 9:38 pm
One thing to note on defined benefit plans is that because of all the problems in the early 70's, the government in 1974 passed the Employee Retirement Income Securities Act (ERISA) which did several things to make pension plans less likely to not be able to meet their obligations - first they limit how much of the pension can be invested in the company stock and second they had to be fully funded by 1980 using government approved rates of return and actuarial statistics. These alone helped a lot.

Unfortunately for pensions, most of us are living too long which is why in the late 90's pensions converted from defined benefit plans to defined contribution plans (like 401K's). The defined benefit plans became unaffordable. As a result, defined benefit plans are pretty much limited to legacy employees and government workers.
I have been in the workforce full time for 28 years and ten years ago joined a unionized employer with a defined benefit pension. So I have a 401k and will most likely (barring unforeseen events) have modest pension income to add to the mix. My employer offers fairly decent early retirement options, which is kind of what prompts the issue.

Anyone retire early due to mid life malaise or office annoyances or to start a business and then regret it? I certainly don’t want to make that mistake, but it seems to be not completely uncommon.
If maximizing your retirement income is the only criteria you are almost always better off staying where you are and accumulating assets through maximizing your defined benefit plan and making maximum contributions to your 401K

Starting your own business is risky and takes financial investment. Statistically you business will survive but not make as much money as staying with your job. You may make a lot but you also may lose some. Also if you go that way, look at the exit strategy for the business. Most small businesses do not sell out when you want to retire but they close.
Yes, thank you, Im maxing out my retirement plan and catch up contributions, savings, as well as other workplace benefits, including long term disability and long term care. Ive reduced my equity exposure somewhat also.

I’m not planning to start a business, but I mention it because Ive seen unrealistic concepts of being your own boss lead people astray with the results you describe.

Maximizing retirement income, fortunately, isn’t my only criterion at this point. I actually like working, like my field and being engaged in something larger than myself. I think I’ll be more or less ok financially but will wait for the market correction and inflation developments rather than make the classic mistake of retiring overoptimistically into a bull market.

I’m 54 and work offers a scaled back early retirement option at 56, which seems too early to me but is interesting to have as an option. At this point, its my plan B or C if health concerns arise or some other horror occurs that necessitates leaving work early.

I’ll probably just stay in for a while longer if I can, just to keep active, contribute to society, keep learning and growing hopefully, and see how I feel at 57/58.
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Bob cruise director
Cruise Director
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Joined: Thu Apr 11, 2019 2:38 pm
Location: any golf course that will take my money

#42

Post by Bob cruise director »

SReh26 wrote: Sat May 08, 2021 2:10 pm
Bob cruise director wrote: Sat May 08, 2021 1:42 pm
SReh26 wrote: Sat May 08, 2021 12:09 pm

I have been in the workforce full time for 28 years and ten years ago joined a unionized employer with a defined benefit pension. So I have a 401k and will most likely (barring unforeseen events) have modest pension income to add to the mix. My employer offers fairly decent early retirement options, which is kind of what prompts the issue.

Anyone retire early due to mid life malaise or office annoyances or to start a business and then regret it? I certainly don’t want to make that mistake, but it seems to be not completely uncommon.
If maximizing your retirement income is the only criteria you are almost always better off staying where you are and accumulating assets through maximizing your defined benefit plan and making maximum contributions to your 401K

Starting your own business is risky and takes financial investment. Statistically you business will survive but not make as much money as staying with your job. You may make a lot but you also may lose some. Also if you go that way, look at the exit strategy for the business. Most small businesses do not sell out when you want to retire but they close.
Yes, thank you, Im maxing out my retirement plan and catch up contributions, savings, as well as other workplace benefits, including long term disability and long term care. Ive reduced my equity exposure somewhat also.

I’m not planning to start a business, but I mention it because Ive seen unrealistic concepts of being your own boss lead people astray with the results you describe.

Maximizing retirement income, fortunately, isn’t my only criterion at this point. I actually like working, like my field and being engaged in something larger than myself. I think I’ll be more or less ok financially but will wait for the market correction and inflation developments rather than make the classic mistake of retiring overoptimistically into a bull market.

I’m 54 and work offers a scaled back early retirement option at 56, which seems too early to me but is interesting to have as an option. At this point, its my plan B or C if health concerns arise or some other horror occurs that necessitates leaving work early.

I’ll probably just stay in for a while longer if I can, just to keep active, contribute to society, keep learning and growing hopefully, and see how I feel at 57/58.
It sounds like you have thought this out well. Any plan is better than no plan which I have seen people at your age just starting to think about retirement. Also if you enjoy the work you are doing, all other factors being equal, there is no reason to stop working.

Good luck.
Bob Stevens
Cruise Director
SReh26
Posts: 212
Joined: Thu Apr 01, 2021 10:48 pm

#43

Post by SReh26 »

Many friends and coworkers of mine were devastated by the popping of the internet dotcom bubble in 2000, and by the real estate crises in 1993 and 2008.

I really would like to protect myself and my retirement from whatever is going on today. But its unclear if that means shifting into treasuries, just not buying into these prices or generally just holding the fort with my current allocation (30 percent equities) for now and battening down the hatches.
SReh26
Posts: 212
Joined: Thu Apr 01, 2021 10:48 pm

#44

Post by SReh26 »

Ok Im going to revisit my favorite topic.

One of the best pieces of advice I ever got was not to change something good out of dissatisfaction with some other unrelated issue. Ie, it’s been a challenging year with the virus and so on, but some people are channeling that dissatisfaction by changing their hair color, moving, divorcing, quitting jobs, retiring early or what have you. We don’t want to make that mistake, right?

So if we are dissatisfied, we need to identify the real problem (illness, aging, boredom, midlife crisis, virus fatigue) and not change something good - our jobs - for relief that isn’t the real problem. I knew someone who retired when a close relative passed, for example, but then wanted to get back into the work world and it was hard.
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