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Strategies & Market Trends : Value Investing

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To: John Koligman who wrote (50778)	2/4/2013 1:06:23 PM
From: E_K_S	Read Replies (1) of 78462

OT - Retirement/Pension discussion - Those imputed growth estimates do make a difference Hi John - I was vested w/ 8 years at LMT when I worked there from age 21 to age 29. I was surprised to see my "vested" estimated amount to be around $375/month. The plan also provides for a spousal benefit and/or guaranteed annuity amount which you select on your retirement date. The bigger portion of my retirement is my 401K where I received matching amounts from the company (I think I contributed 5% of my pay check). I never added to the IRA after leaving LMT as I was self employed. My lump sum IRA rollover distribution is more than a 4 bagger now (after 24 years being invested) and represents about 15% of my net worth. I expect it to double twice more before I begin to do any withdraws. The key it to keep it compounding at 8% or more. Using a quick back of the envelope calculation, my monthly pension annuity could represents as much as 8 % of my estimated IRA/ROTH monthly dividend stream(s) based on my expected retirement date (ie age 65). So you are correct that the dollars needed to spin off that income stream can be quite large especially when the 10 year treasury bill rate is only 2% now. I can see how these amounts can be big especially if companies did not (1) set aside pension amounts and (2) can not earn their long term estimated annual return. Actual plan amounts could very quickly become a deficit to the amounts needed. Too bad it has taken so long for many of our local municipalities to start migrating to similar 401K plans (some as late as 2010 for new employees). So, I think many of our corporate companies are better off than our Federal/State and City agencies. I really have never thought too much about my "vested" pension totals other than maybe helping buying groceries. I hope you are able to collect all the benefits promised. I see now how these totals can be in the billions. EKS

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