Would you go 100% VT after maxing out Roth if you have a pension and start investing at 45?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you get social security? That should get you to 80k.

OP. No unfortunately I won't be eligible for SS and that's why I started panicking. As of now, pension will be my only retirement income. Thankfully I have 15 years to have a little extra to add to it.

Why aren't you eligible for SS? Everyone is eligible for it because you pay for it. I have never heard of this. That's insane. Are you sure? Do they take SS from your paycheck??

Plenty of people with pensions don't have access to SS. DC Government employees, for instance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you get social security? That should get you to 80k.

OP. No unfortunately I won't be eligible for SS and that's why I started panicking. As of now, pension will be my only retirement income. Thankfully I have 15 years to have a little extra to add to it.

Why aren't you eligible for SS? Everyone is eligible for it because you pay for it. I have never heard of this. That's insane. Are you sure? Do they take SS from your paycheck??

Many municipal workers with government pensions in the US do not pay into SS and therefore are not entitled to SS when they retire. This is becoming less common, but there are still lots of people in this category.

+1. Never heard of this as well and just googled it. It apparently there a whopping 15 states where this is the case.

I honestly think they are still better off because they can invest whatever was going to go to SS themselves anyways.

And SS checks are not big for most people especially if you are single. If you are married 2 SS checks make a big difference though.

And DC. So, relevant here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:With no SS, and therefore a "shortfall" of about $20k/yr on expected annual expenses, you might consider a very aggressive target-date fund that still has some (but not much) bond allocation.

For example, VSVNX (Vanguard's 2070 fund) is about 91% stock funds. That's a lot of risk/return, but not 100%.

The 2070 fund will gradually get more conservative with its balance, but it will always have more risk/return than a target-date fund that is closer to your actual retirement date. So you could probably just stay in VSVNX indefinitely, if you like that approach.

Interesting. Not OP. Some people say its not a good idea to have target funds in a taxable because of possible "surprising" tax liability triggered events. Or, perhaps do you think in OP's case since he is starting so late and unlikely to have huge sum of money any such tax event is unlikely to be a big hit?

I'm the PP who suggested VSVNX. You are right that target date funds are less tax-efficient and would generally not be the best option for taxable investments.

However, (1) a fund that is 91% stock funds, there won't be much impact (regardless of the total amount of $$ in the account) vs., let's say, a 50-50 or bond-heavy balanced fund, and (2) OP asked for a single fund, so I think this is the best for OP's request.

I also think, in general, the perfect is the enemy of the good. OP is better off having some balance vs. going all stocks or getting overly complicated.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With no SS, and therefore a "shortfall" of about $20k/yr on expected annual expenses, you might consider a very aggressive target-date fund that still has some (but not much) bond allocation.

For example, VSVNX (Vanguard's 2070 fund) is about 91% stock funds. That's a lot of risk/return, but not 100%.

The 2070 fund will gradually get more conservative with its balance, but it will always have more risk/return than a target-date fund that is closer to your actual retirement date. So you could probably just stay in VSVNX indefinitely, if you like that approach.

Interesting. Not OP. Some people say its not a good idea to have target funds in a taxable because of possible "surprising" tax liability triggered events. Or, perhaps do you think in OP's case since he is starting so late and unlikely to have huge sum of money any such tax event is unlikely to be a big hit?

I'm the PP who suggested VSVNX. You are right that target date funds are less tax-efficient and would generally not be the best option for taxable investments.

However, (1) a fund that is 91% stock funds, there won't be much impact (regardless of the total amount of $$ in the account) vs., let's say, a 50-50 or bond-heavy balanced fund, and (2) OP asked for a single fund, so I think this is the best for OP's request.

I also think, in general, the perfect is the enemy of the good. OP is better off having some balance vs. going all stocks or getting overly complicated.

This. In fact this the perfect option for OP since he is starting so late. He likely has about 20 years of investing left and this fund is probably not going to trigger a tax surprise in 10 years because it will still be stock heavy then.

[Anonymous]

Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

[Anonymous]

Read The Power of Zero by DM.
Can you get a little part time job where you pay into social security? It doesn't take a lot to get the credits with SS.
I got my credits long ago paying into it very little. Should get all back within two years.
I would buy dividend ETF or even some MO from now until retirement.
Go with dividends and stay healthy.

[Anonymous]

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

Haha, well done. Of course, (1) a $175K total annual pension with SS is very different from (2) a $60K annual pension w/o SS!

Do you need anything at all from your investment portfolio, or is it just for your heirs?

Keep in mind, OP is trying to make sure they have enough investment returns to be set in retirement. That is not your situation. But OP is still in a good position with a perfectly solid pension -- better than >90% of the US.

[Anonymous]

Stock market is about to flush, bro.

[Anonymous]

VT sounds great for equities, but you will need some bonds at some point...

[Anonymous]

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

175k at 60 is a lot even for two people combined? Where did you work?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

175k at 60 is a lot even for two people combined? Where did you work?

Local govt. pensions for old timers like us were very lucrative (est 75% of final 3 years of pay) with healthcare plan and adjusted for CPI with survivor benefits. Pensions still good for newer employees but nothing like our deal. They are gradually diluting and phasing the pensions.

[Anonymous]

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

God, that is an insane pension. Must be NJ or NY.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

God, that is an insane pension. Must be NJ or NY.

NP. You can still get these pensions in the DMV today, working in local govt, and more specifically within public safety. Think police, ems, fire departments which are unionized and fight tooth for their constituents. I believe public school districts also offer good pensions but not as lucrative vs public safety jobs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

God, that is an insane pension. Must be NJ or NY.

My ex wife is a teacher in NY. Her pension is insane. I wonder who is paying for these insane pensions in NY in particular. If anyone doesn't want a 401k and instead wants a pension move to NY and become a teacher or cop or firefighter. The lifestyle of some of those public servants in NY can rivals wall street folks I am not kidding.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Spouse and I are near 60, fully retired with close to $175K annual pension. We worked for the govt and will also get a min of $4K each SS at 65 or 67. Our $2.5m portfolio is fully invested in the SP500. We figured that for giving up the lower salaries all those years, but the pension lifetime govt pension shield, the optimal thing do is to leave the funds 100% in the stock market. The pension and eventually SS is more than enough so let it ride. As one of the other posters stated, pension is a golden hedge - allows one to take risks that a 25YO should take.

God, that is an insane pension. Must be NJ or NY.

My ex wife is a teacher in NY. Her pension is insane. I wonder who is paying for these insane pensions in NY in particular. If anyone doesn't want a 401k and instead wants a pension move to NY and become a teacher or cop or firefighter. The lifestyle of some of those public servants in NY can rivals wall street folks I am not kidding.

And don't forget about the incredibly good health insurance as well post retirement.