"I'm in favor of having the federal government operate like a private company in this regard because I think there are other perks, like job stability, that make it attractive."

Really? That would be great for me, because there are some extremely interesting jobs in government that I would love to take, but can't right now because I can't afford the paycut. So if you could just increase the GS-15 max salary by 50K, and then pay 100% of my healthcare and smartphone charges, and give me a 13% 401K match rather than the current 3% TSP match, and give me two more weeks vacation that what a new government worker currently gets, then I'm in!

35, 71k in 401k, 12k in roth, 5k or so in taxable investments

wife is 34, about 175k in 401k.

lots of catching up to do.

39 (me) 280k in 401k/Roth
38 (wife) 170k in 401k/Roth

Just started a 529 for our 1 yr old

HHI 200k

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

I don't really understand your point about inflation, esp. as inflation has been next to nothing for some time now. I can't imagine how inflation is undermining the tax deductions for retirement savings and even a company match. If there was a lot of inflation then paying off your mortgage early is the last thing you should do, as the real value of that debt would be reduced each year.

My issue with your approach is that investing in equities over the long term can be expected to give you much better returns than your mortgage, but the shorter your time horizon the greater the variation in the returns, at least historically, plus you are foregoing the benefit of compounding returns. So by shortening your time horizon for retirement savings you increase your risk and also likely reduce your returns.

The longer your money will be in the market, the more risk you can tolerate. If you dump everything into a mortgage you are going to be stuck with a smaller investing window and have to be more conservative, which will make your money more susceptible to inflation. Retirement should be a primary focus early, especially with 3-4% mortgages that are really less than that with the tax deduction, 401k matching, and taking advantage of income tax deferral in you high earning years. The cost of the mortgage is less than 5%, even with 2% inflation and a 4% mortgage (which costs you 2.76% figuring a 31% marginal fed/state tax rate) the equities historically will beat that comfortably without tying you to just one asset (ask someone in Detroit or prince William County how stable an investment a house has been for them).

Not to mention if you lose your job it is a lot easier to make ends meet with emergency fund/retirement money than it is to get a higher rate equity loan, if you can find a bank to lend to you with no job.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

I don't really understand your point about inflation, esp. as inflation has been next to nothing for some time now. I can't imagine how inflation is undermining the tax deductions for retirement savings and even a company match. If there was a lot of inflation then paying off your mortgage early is the last thing you should do, as the real value of that debt would be reduced each year.

My issue with your approach is that investing in equities over the long term can be expected to give you much better returns than your mortgage, but the shorter your time horizon the greater the variation in the returns, at least historically, plus you are foregoing the benefit of compounding returns. So by shortening your time horizon for retirement savings you increase your risk and also likely reduce your returns.

Thank you for your input. I see and understand the points you're making and they are valid. Yes, inflation is very low right now, but my concern is about 1) inflation in the longer term and 2) inflation impact on large saving accounts . Let's say I've been an avid saver and I've accumulated a retirement fund of $500k. Now, with just 2% inflation (which is low/average), that is $10k, go to 3-4%, its $15-20k purchasing power lost.....and that's in one year. So in my view, there is a risk in long term also.

But historically a balanced portfolio of stocks and bonds will beat inflation, especially over longer periods. You seem to be saying that because inflation reduces purchasing power over the long-term, you don't want to have any long-term investments, when I think the better lesson would be to avoid investing for retirement in assets that historically don't keep up with inflation over the long term (such as cash or CDs).

True, but I would add fixed assets to that list of balanced portfolio along with tradable assets that hold value in the long run like gold/silver. An ounce of silver got you 3-4 gallons of gas thirty years ago and still does the same today....

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

I don't really understand your point about inflation, esp. as inflation has been next to nothing for some time now. I can't imagine how inflation is undermining the tax deductions for retirement savings and even a company match. If there was a lot of inflation then paying off your mortgage early is the last thing you should do, as the real value of that debt would be reduced each year.

My issue with your approach is that investing in equities over the long term can be expected to give you much better returns than your mortgage, but the shorter your time horizon the greater the variation in the returns, at least historically, plus you are foregoing the benefit of compounding returns. So by shortening your time horizon for retirement savings you increase your risk and also likely reduce your returns.

Thank you for your input. I see and understand the points you're making and they are valid. Yes, inflation is very low right now, but my concern is about 1) inflation in the longer term and 2) inflation impact on large saving accounts . Let's say I've been an avid saver and I've accumulated a retirement fund of $500k. Now, with just 2% inflation (which is low/average), that is $10k, go to 3-4%, its $15-20k purchasing power lost.....and that's in one year. So in my view, there is a risk in long term also.

But historically a balanced portfolio of stocks and bonds will beat inflation, especially over longer periods. You seem to be saying that because inflation reduces purchasing power over the long-term, you don't want to have any long-term investments, when I think the better lesson would be to avoid investing for retirement in assets that historically don't keep up with inflation over the long term (such as cash or CDs).

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

I don't really understand your point about inflation, esp. as inflation has been next to nothing for some time now. I can't imagine how inflation is undermining the tax deductions for retirement savings and even a company match. If there was a lot of inflation then paying off your mortgage early is the last thing you should do, as the real value of that debt would be reduced each year.

My issue with your approach is that investing in equities over the long term can be expected to give you much better returns than your mortgage, but the shorter your time horizon the greater the variation in the returns, at least historically, plus you are foregoing the benefit of compounding returns. So by shortening your time horizon for retirement savings you increase your risk and also likely reduce your returns.

Thank you for your input. I see and understand the points you're making and they are valid. Yes, inflation is very low right now, but my concern is about 1) inflation in the longer term and 2) inflation impact on large saving accounts . Let's say I've been an avid saver and I've accumulated a retirement fund of $500k. Now, with just 2% inflation (which is low/average), that is $10k, go to 3-4%, its $15-20k purchasing power lost.....and that's in one year. So in my view, there is a risk in long term also.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

I don't really understand your point about inflation, esp. as inflation has been next to nothing for some time now. I can't imagine how inflation is undermining the tax deductions for retirement savings and even a company match. If there was a lot of inflation then paying off your mortgage early is the last thing you should do, as the real value of that debt would be reduced each year.

My issue with your approach is that investing in equities over the long term can be expected to give you much better returns than your mortgage, but the shorter your time horizon the greater the variation in the returns, at least historically, plus you are foregoing the benefit of compounding returns. So by shortening your time horizon for retirement savings you increase your risk and also likely reduce your returns.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

ops, meant to say "interest"

Anonymous wrote:

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

Agree with you on this and have thought about that. Problem is inflation. Have a look at this:

http://www.davecoker.info/blog/wp-content/uploads/SPX-CPI-1983-2013-V1.jpg

...if it was not for inflation, I would have done as you said, but due to inflation, putting money in paper (like in the bank) or paper assets (stock), the diminishing value of ones savings is higher than any benefit I would be getting including free 401k match. Now, if was 10 years from retirement then I would be less concerned. As for the IRA/401 limits, I would have to save more outside the IRA/401 retirements vehicles when that time comes.

I know I'm going against the herd on this one but on the flip side we're paying off our 30yr mortgage in 8-9 yrs with calculated (nominal) $225k less interested paid.

Happy to hear opposing views.

Anonymous wrote:37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

It actually does make sense because you cannot retroactively save in an IRA or 401K. There are limits on both of those. So if you wait until you are 45, for example, to start saving for retirement, you are going to have to put a lot away per year, but you can only put $5500 in an IRA and $17.5K in a 401K. If you pay off the loan and save for retirement at the same time, you won't have that problem. Also, are you giving up a free 401K match?

37 - zero $ - does not make sense to save if you have loan/mortgage as you're "saving" with borrowed money. In the process of paying of mortgage in record speed, then will save.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI $250K

DW 38 $90K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DH 40 $50K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DC 8 - 4 years of post 9/11 GI Bill, $35K 529

DC 1 - 4 years of post 9/11 GI Bill, $2K 529

Looking to have approx $200K per year in today's dollars to live on in retirement. With pensions and SS (and normal career progression) should have $180K per year.

That's what's wrong with this damn government. Four pensions, $200k a year..... They just give away money to Feds.

The fuck is wrong with you, pp? I mean that? What the FUCK is wrong with you? Are you suggesting that this money wasn't EARNED by these people who have been in the workforce for 20 years? I am 41 and have $300,000 saved for retirement and $70,000 saved for two kids in 529s. I am in the private sector -- did my employers GIVE AWAY this money to me?

What a twisted, ugly world view you have. Do us all a favor and quit expressing your pathetic views on the Internet.

Cause its a total wealth transfer. Why should the government pay for TWO pensions per person? Plus social security? Especially for a family with HHI of $250k?? On top of which they also get free medical for life, loan forgiveness, and the GI education bill requires only 30 days of service before you get 40% of the benefits. Seriously, 30 days of service. That's it. What private sector employee benefit even comes remotely close?

My point is thus simple: it isnt about earnes or not, its that its unneasersarily generous. Moreover, it isn't as if public sector salaries are a disgrace. Far from it - for years they not only enjoyed better stability but near guaranteed raises year over year. I'd much sooner support a more equitable distribution to all us citizens. Tax me more. Lift the cap at $105 on SS. Don't allow me to draw SS if I have over $x million in assets. All fine. But to tax me so a handful of people can get free medical, education and a six figure pension, well that sits less well with me.

It is all just wind and words unless you are willing to strap on a rifle and drop down in the sand. No way should they do away with military benefits. It is not like they have people beating down the doors to get into uniform. They do something the rest of us are too scared, lazy, or selfish to do so that we can sit safely behind a desk and bitch about which neighborhood is better.

It is great that some are able to be high earners after they get out and even get a civilian pension, not all are that lucky. It can be a hard transition, many struggle to find work and just because they don't come home with a visible wound doesn't mean they are completely healthy.

To the two above - thank you for your service.

H 34 - 300 401k/ira
W 33 - 119 401k/ira
HHI - 208
144 emergency/invest, 270 equity in home.
529 - 8 for 1 year twins

FWIW I also hope to retire between 60 and 65.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI $250K

DW 38 $90K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DH 40 $50K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DC 8 - 4 years of post 9/11 GI Bill, $35K 529

DC 1 - 4 years of post 9/11 GI Bill, $2K 529

Looking to have approx $200K per year in today's dollars to live on in retirement. With pensions and SS (and normal career progression) should have $180K per year.

That's what's wrong with this damn government. Four pensions, $200k a year..... They just give away money to Feds.

The fuck is wrong with you, pp? I mean that? What the FUCK is wrong with you? Are you suggesting that this money wasn't EARNED by these people who have been in the workforce for 20 years? I am 41 and have $300,000 saved for retirement and $70,000 saved for two kids in 529s. I am in the private sector -- did my employers GIVE AWAY this money to me?

What a twisted, ugly world view you have. Do us all a favor and quit expressing your pathetic views on the Internet.

Cause its a total wealth transfer. Why should the government pay for TWO pensions per person? Plus social security? Especially for a family with HHI of $250k?? On top of which they also get free medical for life, loan forgiveness, and the GI education bill requires only 30 days of service before you get 40% of the benefits. Seriously, 30 days of service. That's it. What private sector employee benefit even comes remotely close?

My point is thus simple: it isnt about earnes or not, its that its unneasersarily generous. Moreover, it isn't as if public sector salaries are a disgrace. Far from it - for years they not only enjoyed better stability but near guaranteed raises year over year. I'd much sooner support a more equitable distribution to all us citizens. Tax me more. Lift the cap at $105 on SS. Don't allow me to draw SS if I have over $x million in assets. All fine. But to tax me so a handful of people can get free medical, education and a six figure pension, well that sits less well with me.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI $250K

DW 38 $90K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DH 40 $50K TSP, $30K IRA, military pension at 60 and federal civilian pension at 62.

DC 8 - 4 years of post 9/11 GI Bill, $35K 529

DC 1 - 4 years of post 9/11 GI Bill, $2K 529

Looking to have approx $200K per year in today's dollars to live on in retirement. With pensions and SS (and normal career progression) should have $180K per year.

That's what's wrong with this damn government. Four pensions, $200k a year..... They just give away money to Feds.

The fuck is wrong with you, pp? I mean that? What the FUCK is wrong with you? Are you suggesting that this money wasn't EARNED by these people who have been in the workforce for 20 years? I am 41 and have $300,000 saved for retirement and $70,000 saved for two kids in 529s. I am in the private sector -- did my employers GIVE AWAY this money to me?

What a twisted, ugly world view you have. Do us all a favor and quit expressing your pathetic views on the Internet.

I don't think this poster is the only person out there who wishes the government would reform or abolish the pension system. I'm in favor of it too because I don't think its sustainable. I'm in favor of having the federal government operate like a private company in this regard because I think there are other perks, like job stability, that make it attractive. Private industry doesn't have that. With that said, I'm all in favor of making federal salaries more competitive, especially in specialty positions. I'd rather that people are better paid while they are currently working. I'm also in favor of the GI Bill and other perks like free/reduced medical coverage for life for combat veterans. I'm in favor of full lifetime support for all wounded or disabled veterans, including people suffering from PTSD or mental health issues.

I went to school on the GI Bill, as did another sibling. My father was severely disabled in combat, and had limited work opportunities. He had a low-paying federal job and disability payments. He's in his 60s and basically gets the same "salary/benefits" which is about $75K annually plus free health care. He is such a poor money manager that he declared bankruptcy. It makes me cringe that he could do this with the public's money. I have no idea where it goes.

I don't think benefits should be in the form of guaranteed pension. Above is a couple, who in 20 years, could retire at $350K HHI and earn $245K annually for 30-40 years. Nobody retires at 60 any longer, and life expectancy is up. Europe is even reforming pensions. I know people don't like to hear it, but I think it's worth a discussion.