Retirement, Social Security, and Wages

[two_bit_score]

The taxpayers are getting tired of picking up the tabs on those early and lucrative retirements by public sector workers. Cops used to be under paid. They aren't anymore. And their retirements are better than most private sector workers.

 

[keegs]

My guess is that those public employees who receive pensions in that range were likely doing a job equivalent to a director or executive director in the private sector. I don't think the average teacher or fireman's retirement is more than 60-70 percent of their salary.

My sense is the days are numbered for the defined benefit pension plans in both the private and public sectors.

There's been some legislation at the federal level passed in the recent past to increase the participation rate in company sponsored 401k plans. That's a good thing IMO and there's room for more to be done in this area.

I think there are definitely those who have what it takes to find a path to retirement. But I also think the average person is woefully unprepared.

 

[dave1949]

well i'm 37 and can't wait for retirement. . . what type of money do you guys who are retired spend a month? I try to add up what i would need (with everything paid off) i figured that 5k a month would go a long way, my dad tells me i don't have a clue. he tells me that to retire i would need to have an income of 8-10k a month.

What I have done, usually about once or twice per year, is make a budget listing of all the items that must be paid. Utilities, cable?, insurances, maintenance, food, clothes, dog care etc. Autos will eventually have to be replaced, so I put in amount that represents buying an auto. Items like that are easy. Make a product lifetime estimate in years, multiple years by 12 to get months. Divide the estimated replacement cost by the months. Add a line to your budget in that amount.

Of course, make the list as complete as you can.

Next I convert all non-monthly costs to average monthly amounts, so everything is on a monthly basis.

Fot things I don't know or know will change, I try to make realistic estimates. Look up some on-line quotes or whatever. Health care/insurance is probably my biggest unknown.

The total at the bottom is my monthly 'survival' budget. Any extras for a trip or whatever would be additional.

I do the same thing for savings and investments. Take current readings and interest/return rates and calculate how much income I would have on an average monthly basis.

Then I compare the results of the budget and income estimates.
Dave.

 

[jcummins]

The taxpayers are getting tired of picking up the tabs on those early and lucrative retirements by public sector workers. Cops used to be under paid. They aren't anymore. And their retirements are better than most private sector workers.

Most of the private sector has gone to 401Ks, because they knew the pensions would bankrupt them. Problem is the governments, both large and small, I guess thought they could always go back to the well (taxpayers). It's time for that to stop.

 

[Hardscrabbble]

:thumbsup:I like to use the term career change rather than retirement. After 35 years at a company took an early retirement which required me to take a reduced pension and went to work part time for 20 hours a week working for the county park district. Works out great, get some tractor time, outdoor time, exercise and no stress. Love it.

 

[ultrarunner]

My guess is that those public employees who receive pensions in that range were likely doing a job equivalent to a director or executive director in the private sector. I don't think the average teacher or fireman's retirement is more than 60-70 percent of their salary.

My sense is the days are numbered for the defined benefit pension plans in both the private and public sectors.

There's been some legislation at the federal level passed in the recent past to increase the participation rate in company sponsored 401k plans. That's a good thing IMO and there's room for more to be done in this area.

I think there are definitely those who have what it takes to find a path to retirement. But I also think the average person is woefully unprepared.

Could be a California thing? Public Safety pensions are very high here... not uncommon for a regular police officer in my city to pass the 100k mark on pension with 30 years...

Local paper listed names and agency for police, fire, public health and the numbers were staggering looking in from the outside...

Does anyone with a 401k still have any company match? Company match went away in the private Health Care Sector at a lot of facilities after several consecutive reimbursement rate cuts...

If I could add a little predictability to future tax burdens... it would help a lot in planning...

 

[dmccarty]

Could be a California thing? Public Safety pensions are very high here... not uncommon for a regular police officer in my city to pass the 100k mark on pension with 30 years...

Is it a big city thing where it is expensive to live and thus higher compensation?

I was talking to a county deputy the other day and his pay was awful. I don't think he was making more than 24K. The county is not expensive like many areas but it is not cheap either.

I have heard that NYC PD and FD make a boat load of money and retire early.

Defined pensions are going away. Too much liability for the company or government.

Later,
Dan

 

[Chuck52]

I think many of the public retirement plans here in Missouri are funded by the income from invested monies, at least the higher ed plans are. Even with the huge market losses those plans are still solvent and doing fairly well. In the past they even gave "raises" to retirees, but I expect that won't happen again for a while. I also don't expect to be offered the deals they used to come out with every once in a while, where they'd offer early retirement incentives to the higher paid folks to reduce the current payroll....they could do that because the retirement investments were doing really well. Last report I saw didn't indicate any real problems funding the expected retirements.

Wife works at a semi-private hospital, one more-or-less permanently leased to a hospital management company, and they still do a 401k match. For the older employees, they also still have to fund an old-fashioned retirement plan, but it has pretty low value, even for long term employees like DW. New employees only get the 401k match, and I don't see that going away due to the competition still there for health care workers in this area.

Both of us have 403b or 401k investments. I just checked my TIAA account, and I'm glad I also have the old fashioned pension plan in place. The darn market is so volatile, and bonds don't seem to yield much, though commercial real estate seems to be making a modest reciovery. Fortunately, whoever is in charge of the investments funding the retirement plan is smarter than I am about such things.

Chuck

 

[ihuntbear]

just turned fifty in febuary and retired last friday.Now living the good life

 

[Mickey_Fx]

Just another perspective on retirement and finances.

Before I retired the Co I worked for held a couple sessions for those reaching retirement age. A couple things were presented for financial needs. Typ person needs about 80% of take home pay for income during retirement. Another item that was a real wake-up comment was a person/family should have assets of $1M to take care possible needs. I'm sure some of that amount was meant to generate income to supplement SS & possible pension. This was figures from mid-90's.

One would hope as part of managing your financial resources, one would not have any large debt come retirement time.

I retired when I was 58 and cashed out on Co pension. Presently, income comes from SS and investments.

There were a lot of yrs where saving was in the range of 25% of take home pay & rarely going into debt. We live on a very modest amount but anytime we desire something, there is money to pay for it.

Oh, as another person pointed out, FWJ no longer posts here but is active on another forum.