It will ALWAYS be difficult for actuaries to determine how much will be needed. Too many variables.
FIRE (Financially Independent Retire Early)
- Thread starter 03cobra#2
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Very true. That is why it is foolish to have any plan that promises the future. Likely always going to fail.
I am not saying that all of them are handled irresponsibly. Just many. Covid money gave a lot of places a breather, but they will piss through that without any changes.
I'm 32 with a mortgage. I was paying extra each month until rates jumped, now I just pay the payment.
I work Mon-Fri and have a very flexible vacation schedule. I'll probably work like this until 45, and then spend more time traveling.
I work Mon-Fri and have a very flexible vacation schedule. I'll probably work like this until 45, and then spend more time traveling.
I guess I disagree with most of this pension talk. 75% or 90% of a $150k salary is great for sure, but TBH, I am going to want more than that in retirement. Much more.
401k, or even better, real estate is the real way to financial independence.
If you invest your money into any modest 401k beginning young like 25-30, you will have many millions of dollars at 59.5 years old. At that point, you slide your $3-5M (or more) into a modest private fund and live off the interest for the rest of your life.
The interest on $5m will pay you $350k annually at 7% and you'd never even touch your $5m.
401k, or even better, real estate is the real way to financial independence.
If you invest your money into any modest 401k beginning young like 25-30, you will have many millions of dollars at 59.5 years old. At that point, you slide your $3-5M (or more) into a modest private fund and live off the interest for the rest of your life.
The interest on $5m will pay you $350k annually at 7% and you'd never even touch your $5m.
A pension benefit doesn't preclude you from contributing to a 401/403/457 plan or buying real estate.
Correct and I totally agree.
But none of you have yet mentioned the REAL reason to work in the public sector. At least in CA -- you can contribute to MULTIPLE retirement accounts.
My wife (also a teacher) is contributing to both her 403 and 457. She is not maxing them yet because we can't quite afford that, but that will change very soon.
She will be able to put way 20.5k into EACH account annually. That combined with mine, we'll be saving well over $60k per year.
Going to be kick ass.
Says the guy with the Gadsden flag avatar. Lmao
I have both a 403 and 457.
I don’t know about many millions. I’ve been contributing about 75% of the max for 19yrs and unless the market does something real crazy and/or I trade in and out just right, prob be a million if I had to guess.
I’m close to equal my 401k on the side in cash and E trade due to real estate and stock trading on the side.
The state pensions are ridiculous. Remember talking to a CHP back in the early 2000s and he said their pension is like 98%. That is not sustainable.
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Unless they mandate covid boosters for pensioners. LMAO.
Some sectors of government are necessary, but far from all. I'm in favor of smaller government but at the end of the day, the branch I work for would remain no matter what.
My point remains that if someone wants a pension, there's plenty of federal/state/local/city opportunity at the moment.
It is many millions. I originally said 3-5M as a guess... I plugged the numbers into the calc and its actually 4.3M. This is the way my friend.
If you are really lucky, you retire during a Replublicans presidency where the markets are returning 15+% (Ala trumpy trump) vs. the historical average of 7% (which is what I used above).
At 10%, the numbers are crazy... 15% would be nuts (not likely).
About the best case scenario there of course.
I was going to say, I don't know many 25 year old college grads making $100k a year, unless massively indebted with student loans, but I see you are in a very high COL area so it certainly will happen for STEM and/or medical people.
Many can't (or won't) save $20k per year right off the bat though and that's a shame because that's 34.5 years of growth available.
Just more than a little ironic to fly that flag when you're openly advertising/borderline bragging about being on the beneficiary end of taxpayer dollars
Texas doesn't have an income tax, so that doesn't fund State pensions. Property taxes are per county, so those also don't fund State pensions. What taxpayer dollars are you referring to?
I took a good opportunity when I had the chance, years ago. It doesn't change the fact I believe in smaller government.
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I'm not grasping the employer match and employer match limit percentages. How much is the employer contributing in dollars?
Not at all.
You may not interpreting the chart correctly. The salary doesn't matter whatsoever. I only used 100k for the simplicity of the math exercise.
What matters is you max your contribution. Now, you can make the argument that a 25 year old cannot contribute 20.5k annually on say, a 50 or 60k salary, but I personally know many who are doing just that.
Im showing the way... not saying its easy early on. However, it certainly gets easier the more money you make.
I do not believe 403s or 457s (the public offerings) match.
However, what I had above is a pretty typical match in the private sector.
As an example, the company I work for matches 50% on the dollar up to 8%. of your salary. this favors higher earners (obviously), but even at $75k salary, that turns into about $3k of free money from the company put into your 401k on top of your $20.5k max contribution -- annually.
Extrapolated over a career, that adds up fast -- and like I said it can be BIG money for higher earners.
I understand how 401k matching works and yes, employers can contribute to 403/457 plans but don't for tax purposes (ERISA). I'm wondering why you used 5% as the limit.
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