Pensions...

[facetious]

https://www.marketwatch.com/story/am...mod=retirement

I started to move taxable savings to our Roth's as soon as I could after thy first let you covert your IRA's. For now I am just going to draw from my IRA rollover from my 401-K and just use the Roth for some of the bigger one time payments like p-tax's and home/car insuance. For now we are trying to keep ajusted gross income down till we are both on Medicare for our ACA health care subsidie . That will be 16 months for her and 28 months for me. After that we will look in to pulling more out of the taxable IRA and move some to the Roths.

After thy passed the Secure Act it changed alot of the estate planing that people had done. After thy got rid of the strech IRA option thy are now recommending that you move as much as you can to your Roth's ( one for you and one for your wife ). The money you leve will still have to be pulled out over ten years but the funds from your Roth's will not be taxable, funds from taxable accounts will allso have to be pulled out over ten years but will have to be clamed as taxable income witch could put them in to a higher tax bracket for ten years.
https://en.wikipedia.org/wiki/SECURE_Act_of_2019

https://www.kiplinger.com/article/re...ecure-act.html

[jonp]

$200K in gold is 125 pounds at $1600/oz.
Pretty sad state of affairs when a supposedly free citizen in a supposedly free nation cannot freely access his own money from a private bank.
If we experience failure, we deserve it, as we’ve certainly done nothing to prevent it.

For a meltdown where a depression or worse might happen, all the gold in the world won't feed you if food is scarce.

[dkf]

For a meltdown where a depression or worse might happen, all the gold in the world won't feed you if food is scarce.

Still has a better chance than a fiat currency issued by a bankrupt government.

[jonp]

Still has a better chance than a fiat currency issued by a bankrupt government.

No argument there about its worth vs fiat currency

[dangitgriff]

For a meltdown where a depression or worse might happen, all the gold in the world won't feed you if food is scarce.

You’re right, but the point is wealth preservation. One ounce of gold is $1673 (as of today), easily stored and concealable, and out of the hands of bankers and government. Guns, ammo and reloading components are valuable, but require much more storage capacity for the purpose of wealth preservation.
It’s good to have both, but I would prefer physically-held gold over anything else if I were wealthy and ultra conservative and distrustful of governments and banks.
Anybody want to buy my yacht?

[dangitgriff]

CalPers pension fund had 64 billion dollars evaporate into thin air, so far.
Anybody else have a pension likewise tied to the markets?

[alamogunr]

CalPers pension fund had 64 billion dollars evaporate into thin air, so far.
Anybody else have a pension likewise tied to the markets?

Almost everybody that has a pension, especially retired public employees.

[dangitgriff]

Almost everybody that has a pension, especially retired public employees.

Most unwise.
Stand by for significant reductions in those benefits, including and especially Social Security, Medicare and Medicaid.
There’s no such thing as a free lunch.

[facetious]

Now for a tail of pure dumb luck . I retired at the end of last year and had set up a IRA rollover account to move my 401 in to. To move it thy told me thy turn every thing to cash and send the check to your new IRA custodian and it would take about 14 days. After the 14 days my guy called to tell me that the check had not showed up so I was reading him the conformtion statment when he told me that the address was wrong, that there was one to many numbers and to give them a call. I called and talked to them and thy put a stop on it and said thy would resend the check but it would be about two weeks to clear the last one and 14 days to get the new one. In this time every thing drops and my 401 is sitting off in limbo some where, all in cash. When it showed up I talked to my guy who put it all in cash so no loss. The last time in 08 any one who didn't lose their um head tripled their money and I think that this could be another one of thouse " once in a life time" money makers. Heck if it just doubles I could aford to live to 120.

"CalPers pension fund had 64 billion dollars evaporate into thin air, so far."
Alot of money but how much as a %? And what do thy think the bounce will be?

Remember think ten year from now .

[alamogunr]

Well said, Facetious. The only way to invest is to do as you said. "Think ten years from now".

I doubt that any one in management at CalPers is panicking. They wouldn't have the jobs they have if they lost their heads every time the market hit a pot hole.

Congratulations on your good fortune(dumb luck).

[Duckiller]

CAL Pers is in trouble because the employers didn't put enough money in. The good citizens of California will make up any shortages in CAL Pers funds. Retirement funds created by our state legislature tend to have first call on all tax dollars.

[dangitgriff]

I hope I’m wrong, but...
Ten years from now the U.S. dollar will be worth less than nothing due to inflation/hyperinflation resulting from the “unlimited” amount of currency creation by the federal reserve. Every fiat currency ever created has, historically, failed due to hyperinflation. The U.S. dollar is no exception and by the end of this decade no global institution will see it as a safe haven asset. A new economic order is all but guaranteed by the D.C. dingbats. They’re attempting to inflate another bubble to fix the one that just popped—which they also created.
Not sure about the percentages of the CalPers train wreck, but the markets went down 30 percent and I suspect it will be getting worse after a short-term fake rebound. Illinois is no better off. There are several other states with bankrupt pension funds but I can’t remember which ones off the top of my head. Just like the nation’s government in D.C., all of them have a spending problem, not a revenue problem.
Like I said, I sincerely hope that I am wrong about this. One thing I am 100 percent certain of, however, is that you cannot print your way to prosperity by creating even more debt to pay off your current debt.
Dangerous waters lie ahead and we are steaming right into them, oblivious to the laws of economics which always return an errant country to the mean, without exception.
R/Griff

[Handloader109]

I've been both lucky and unlucky over the years. Second job had a pension for a few years, added a 401k. 9 years and 9 months into job, company sold and I ended up with a $450 a month pension eligibility at 65..... would have been double or so in 3 short months, and would have been eligible for it at about 50.

A few years ago they allowed early start at reduced amount of $300. figured 8 or so yrs early was worth it.

I lost a lot of 401k money in 90s tech bubble. and no growth in the 08. good bit down now, but I've got everything paid off, and we'll be fine. I suggest moving any pension money out when you can. And I'd hate to depend on one source

Sent from my SM-G892A using Tapatalk

[fcvan]

CalPers since 1984, retired LEO so a pretty good pension. Yes, I have seen the ups and downs regarding employee percentage of contribution. When they upped it, we also got a matching pay increase to make up the increase. Paycheck didn't go up but a raise is a raise. During each fiscal year, actuarial tables set the employer contribution for the next year. At one time, the employer contribution was 0 as the fund was solvent. Californians pleaded for the state to take that excess and pay down the debt but that never happened. When things tanked we said 'I told you so.' One Governor tried to rob 8B from the fund, courts said 'put it back' and they did. CalPers is not controlled by the state as much as many think.

Folks complained about pensions, and so pensions were reformed. Older employees were locked into better percentages and retirement age, newer employees got kind of hosed. Example: when I started out was 2% at 55, max of 75%. When they couldn't afford to give us raises they improved the formula to 3% at 50, max of 90%. For the new guys it is now 2.5% at 57, max of 75%, still a good pension.

One of the reasons things improved was a study showing that first responder folks who retired at 55 typically died within 27 months, but at 50, they lived 54 months. Most employees were still collecting their contributions and hadn't dipped into the employer contribution, a good deal for them.

Many of the older guys I worked with did die early. It seemed like everybody smoked when I started. I don't, except for the occasional fine cigars my wife would buy for me. You don't inhale. The state started looking at employee wellness and smoking cessation was covered. We started receiving physical fitness pay which required an annual physical and a physical abilities test. Guess what, people got healthier, less cheeseburgers and more chicken salads.

The new guys coming in already had healthier lifestyles and so better life expectancy. The two big killers became alcohol and suicide due to job stress. The state started a program of peer counselors or crisis counselors for the employees. Confidential, discrete, helpful, a program I joined and I participated in heavily. I had many 'sessions' sometimes in the middle of the night at my front door, or in the middle of a grocery aisle. The minute someone asked for help 2 things happened 1) they got help, and 2) I went on the clock. I didn't go on the clock for everything and I bought the coffee at the diner or made some at the house. I still volunteer on crisis hotlines from time to time. Some careers and lives were saved, some not so much.

Saving the best for last, I loved training the new guys, both work related stuff and the 401k program. Sometimes I would start that conversation sounding like an old evangelist 'My brother/sister, have you heard the good news about the glory of Deferred Compensation!' Then I would run down the numbers, especially about how folks who started as soon as they were eligible, maxed out their contribution, and retired with more than 1M in their account, and that 12 to 14 employees a month were retiring from the million dollar club. All the other fun things like taking 1/2 of every pay raise and putting it in DC, still getting their raises (7 years to reach senior pay) and never missing the money. I also taught them how to work their money through careful fund placement. When I showed I was earning between 1.5 to 3% each month, and how easy that was, I saw widened eyes.

One of the best part of DC was you could use your money by borrowing from your fund. Yes, you have to pay it back, but the interest you paid was paid to you. Never buy a new vehicle until you can actually afford it, build your credit score, drive that older car from college days (or wherever you came from) save up and pay cash.

If you could hold out until you have enough in DC, cool, just don't do what so many others did, run out with your fancy new paycheck and buy a fancy new car/truck with a loan through the dealership, get screwed on interest, and have no money left over after the bills to do anything. But, you'd have a nice 60k truck sitting in the lot getting weathered and door dinged while you were on the job. I never bought a vehicle with a DC loan but if I did the interest would be 6% or less, paid to myself. I did buy 5 acres in OR, up in the mountains. Land and houses were my main investments, CA North Coast (think Redwoods) and in the Rockies. Oh, and the DC money is still there. The 60k truck my wife bought for me was in cash from the excess vacation/holiday/comp time I had accrued before retiring. I taught the new guys about that as well.

[dangitgriff]

3% APR is only 1/3 the rate of inflation. Forbes reports you need 3-5 million dollars in today’s money to get you through 20 years of retirement. I can’t imagine 1 million dollars for retirement in California would last very long. I can imagine, however, the incentive to leave for cheaper pastures.
R/Griff

[facetious]

I question how you came up with the 3% being 1/3 the rate of inflation but have read alot about how much you will need to retire and have seen where you will need 1 million and up depending where you live and the life style you want. Much of this comes from the 4% rule. The 4% rule says that you should be able to draw 4% each year increasing by the rate of inflation and have your money last 30 years. I don't remember if it was a 60/40 or 50/50 stock bond split. At 4% 1 million would pay 40,000 a year 3 million would be 120,000 a year. Now remember these are averages, there are years that do better you have a little more to play with, some years you may want to pull a little less.

The thing is that those numbers look big and sell magazins and news papers. But thy often thy are using totol cost of living. But if you look deeper thy are not including other income you my have. Also taxs are not the same everywhere.

Take your totol cost for the year and subtract any income from SS, pentions or things like rental income and devide by 4% to get the amount you will need . Again this will just get you close to what you will need and you my want refigure each year as things in your life change.

Here is a site that I liked to play with when I was trying to see if I could call it quits.
https://firecalc.com/

[dangitgriff]

Facetious—
If you use the data the government gives you, you will (generally) not get accurate estimates or projections for anything, just the economic trends.
The real inflation rate is widely understood to be at least 2X the official rate, and most likely at least 3X, using all the data the government purposely omits from their calculations for the sole purpose of minimizing increased outlays to their welfare programs tied to the “official” CPI.

https://youtu.be/2NxxW3kKAzM

[facetious]

Looking at your chart I can see where you are coming from and I agree that at some point intrest rates are going to have to start to go up . Every country is trying to juice their economys but can only do so much. The question is can thy do it with out over shooting and pushing us into hyperinflation.

That is part of the problem the average person dosn't have control over so many things and have to try and plan a future based on "the best infomation we can find, that turns out to be wrong." This hard enough for people that are interested in this kind of stuff. There are alot that don't care or can't comprehend this stuff.

I allso changed my last post to say "3 million not 3 years" is 120,000 a year.

[dangitgriff]

I agree, the average American doesn’t understand basics economics and it’s no wonder they don’t due to all the misinformation and misdirection they’re getting from the gov’t & MSM.
Bottom line, pensions are in terrible jeopardy of going bankrupt due to the actions of our government in conjunction with the Federal Reserve and their subordinate central banks.
All their anger and resentment should rightfully be directed toward their local, state and federal government representatives and the Federal Reserve, in equal measure.
R/Griff

[facetious]

It seems like all the information comes with a agenda. All you can do is try figure out witch ones help you more than hurt. The world is run by weasels.