Do Pensions Make a Difference in Retirement?
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- Опубліковано 8 чер 2024
- With fewer retirees having pensions, it begs the question: how much of a difference does a pension make in retirement?
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The Pension Gamble - FRONTLINE
• The Pension Gamble (fu...
Timestamps
0:00 - Do pensions make a difference in retirement?
1:03 - Pension data for the U.S.
1:44 - Our assumptions
3:01 - Current retirement savings
3:28 - Total savings needed for retirement
5:00 - How much do they need to save?
6:51 - Having a pension can make a difference
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Oh yes, pensions matter. I got hurt at work at the very end of my 20 years in a school district and had to retire, and luckily for me, I have that 20 year pension to support me.
I had relatives look down on me because I was a custodian with no college education, but I'm not even 60 years old yet, retired with that pension, and enjoying life. The same people that put me down 20 years ago are stuck working. Go me! Sometimes in life you have to pat yourself on the back and tell yourself "well done".
How do you apply to be a custodian?
@@2_572 Unfortunately, I do not know. When I applied, everything was done on pen and paper. It’s all online and automated now. Sorry.
@@blockmasterscott thanks for your input 👍
@blockmasterscott Is your pension livable in today's inflation and cost of living ? Do you still get SSS when you turn 62 y/o. Thinking of applying at State hospital. Thanks.
A good friend of my started as a custodian at 18. He is going to retire at 50 and have the quite life he has always wanted. He did change jobs to streets and sanitation, but his pension followed him.
I went the college route, while I do have a government job and have a nice pension coming, I am willing to bet overall he will have had a better work to life happiness balance and in the end we will get a retirement check of roughly the same amount.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $475k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
@@rogerwheelers4322 I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
@@FabioOdelega876 I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with “Colleen Janie Towe”, and she's is widely recognized for her proficiency and expertise in the financial market. With a comprehensive knowledge of portfolio diversification, she is acknowledged as an authority in this field.
@@rogerwheelers4322 Thank you, I just looked her up on the internet and found her webpage and also looked into her credentials. which seems really proficient. I wrote her a mail outlining my financial objectives and planned a call with her.
He takes 7 minutes to get to what everyone already knows. Having a pension is the best way to go. That’s why all the companies got rid of them.
So true
😊and that's why heartless repubs HATE them
Thank you
But you can't pass a pension on to your children and grandchildren. You can pass a 401K or IRA on.
agreed. Of course, a pension makes a difference. It is a benefit of your company. You don't even have to contribute to it. Not sure this should even be in question.
I’m a law enforcement officer in NC. We receive a law enforcement supplement to our pension which makes our pension 100% of our top 4 year income. Also have $350k in my 401k which the state contributes. Also we have the state Heath care for life at the whole group rate which is $50 a month. With 6 years left, I currently make 83k a year. I’ve had people look “down” on me for my job and the fact that I do not have a college education. I think I made out ok…
Hi Ken. I too retired as a LEO in North Carolina without a college degree. Two things I need to bring up since you did not mention it in your comments. At 3 months before you reach 65 years old, you will be required to sign up for Medicare. State insurance will become secondary insurance and you will begin making monthly Medicare payments to the Federal Government. At age 62 your supplement check from the retirement system goes away and you have to decide whether to start social security payments or continue to work somewhere to make up for it. Best of luck to you!
Ha! Y'all definitely earned every bit of that! Thanks for keeping our communities safe. 🙏 I grew up just south of Charlotte.
Those same people aren't working holidays, nights, weekends, missing family events, seeing dead bodies, risk of getting sued or killed and dealing with the low rents of society. I hope you live to 100 so you can milk the hell out of the town you worked for and you earned every penny of that pension. Oh and those people could have put an application in but they didn't
@@nighthog1 most of the time if you contribute to a pension you weren't paying into ss
You deserve every penny. Many years working with the worst of our society and daily risking your life....enjoy your retirement, and thank you for serving.
We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.
For retirees and those close to retirement, I believe it's particularly challenging. All those years of labor only to lose it all to a problem you weren't responsible for, my regrets to everyone retiring during this time.
It depends on your personal preferences and comfort level. However, one option is to keep things simple and consult an investment-advisor. They can help you determine your risk appetite, avoid common mistakes, and provide a broader perspective on your investment landscape.
You may have made some poor choices. Market is not that far down so if your 750K in the reds then you either made terrible choices or have a very large 7.5M nest egg and are better off the 98% of americans. Political commentary aside - maybe a financial advisor would be a good next step.
Makes very little sense. When I started working after college, the Dow Jones average was 805. Today it's over 38,000. And that understates the change as it does not include the impact of compounding dividends. People my age (67) enjoyed prime increases in the stock market and hefty increases in real estate values. So someone who regularly invested in an S & P index during their working career and owned a home, are looking pretty darn good. The peak is here, right now, today.
And now 6 months later the S&P is at an all time high and retirement funds are flying high.
We experienced the pinnacle of our era, but it is now gone. Like what happened to Rome, the corrupt administration will bring this nation to an end. My condolences go out to anyone who is close to retiring and may be worried about whether their pension will be enough to pay the rising cost of living. Insane fiscal policy, poor regulatory policy, poor energy policy, and poor foreign policy
50 and early retirement. I'm very worried about the future and where we're all heading, especially in terms of money and how to get by. I'm considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
@@davidjackson4437 You can look up the financial advisor using her complete name on your computer; I hire her since she looks after the portfolios of renowned investors...
@@brendazvandasara I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look her up and send her a message. You've truly motivated me. God's blessings on you
Yup, Totally agree! Trump really f*cked us good.
@Patricia Carlos
What year was this pinnacle that you mentioned?
Form where I sit it seems like the people that have retired in the last 10 years or will recently retire have it much better than people will that have 30 years of work ahead of them
They reaped the benefits of when the private sector offered a pension AND and a good 401K plan. Those days were gone a couple of decades ago
Pensions are huge! My military retirement and VA disability totals $7000/month and I am 6 years away from collecting social security. After collecting social security, my total retirement income will be a little over $10,500/month.
That's amazing, Gerard. I know you earned every penny of that! Thank you for your service! 🙏🇺🇸
I have been retired for five years now. Although I've been adhering to the 4% rule, things are challenging as I did not anticipated. I have another $460K to put into st0cks. How can I profit from the market's resurgence.
Now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.
This is really nice. I worry that I have a couple more years before retirement, and I want to switch to using a financial advisor, I could really use the expertise of this advsors.
I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.
what’s up with all these scambot conversations?
Buy one month treasury bonds at 5%. You will be making a guarantee $23000 from the government right now. Ride the free money wave while it’s good
I retired from the USAF at the age of 44 and have received a pension ever since. Yes, pensions make a difference. Mine has allowed me to own a home and maintain the standard of living I had all of the years I served. My father also retired from the USAF and though he died much earlier than he should have, his pension permitted my mother to keep their home and live fairly well for almost 20 years until she passed away.
Not every job provides the opportunity for a 401k or other type of retirement account. I had served for almost 15 years when the military finally began offering a type of retirement account, so I missed out on it - but the future generation have it and are still able to retire at 20 years of service if they wish.
I retired in 1992 at 39 after over 20 in US Army. The benefit of that military retirement is like being a millionaire and drawing the monthly interest for life. I continued to work and then retired at 68 with Social Security. Military retirement has proven to be one of the best decisions I ever made. But remember, it’s not really a pension, it’s actually military retirement pay because we are technically still serving members of the Retired Reserve subject to recall depending on your age. One final thought, never let them tell us that those are entitlements, Social Security are earned benefits and military retirement pay is still being earned until they bury us in the ground.
That’s great 🎉
I tried going AF after college, but was denied service because of an eye condition. Pension always seemed better than private sector jobs.
Thx for sharing. I’m fortunate enough to have a pension in the private sector. I’m 22 yrs into a 32 yr pension program at 44 yrs old. Everyday I’m thankful for this. If there are any young people reading this, please try to pay attention to retirement benefits at work. It may not matter to you now, but one day you’ll wake up and realize you’re half way there. Good luck to everyone in retirement
Great point, Matt. As a young person, I remember struggling to get my head wrapped around all of the things I was supposed to do for retirement. It's certainly worth the effort!
Many private pension plans go "belly up" and when the government takes over paying that pension it can be quite a difference. My mother-in-law worked for and receives a small pension from Diebold. They are constantly reminding her that the pension may have to be taken over by the federal government and to work on spending habits.
My USPS pension is only about $1800 a month but my health care follows me in retirement. My biggest asset is the 1.2 million that I've grown in my TSP.
Oh wow -- that healthcare benefits is huge. Thanks for the great comment! 🙏
Awesome tsp!!!!!!
I'm actually going to start a career with USPS myself. Previously build a bit of retirement with my local municipality employer. Would you happen to know if it can roll over at all?
I retired two years ago from the USPS. My FERS pension is currently $2400/mo and S.S. is $2200/mo. You've doubled my TSP ($550K) but living in Ohio, I haven't nearly had to dip into my TSP. It helps that my wife is currently a public school middle school teacher but even w/o her income, I can live worry free. Can't beat FERS!!
I have tsp and looking for more supplemental income
How do people manage in retirement since 401ks are nothing to write home about? Inflation has skyrocketed My 600k turned to 350k in no time. Im 61, won't one work till they die at this pace?
I worked until 72, I was at the top of my income game, liked my work, and we could both go on Medicare. I ALMOST fell into the “only one more year” trap.
@@ThomasChai05 How do you apportion savings, investment and expenditure?
@@ThomasChai05 I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
I've taken the initiative to research her online and verify her credentials. I'm impressed with her expertise, and I've reached out to her to share my financial market goals in detail.
I retired at 65 1/2, spouse years earlier at 62. Had group ins until retirement 65. Spouse has a 401k partially converted to guaranteed anniuity...$25k, and RMD of $8k, I haven't touched my 401k but have $8k inherited IRA... Get $40k from SS... bank spouse's SS.
Actually do not spend enough enough... so the windfall winners will be heirs.
What am I doing wrong?
Retirees facing financial challenges often couldn't save enough during their working years. Retirement decisions play a pivotal role. Despite my parents having similar years in civil service, my mom invested with a wealth manager, while my dad relied on his 401(k). As a result, my mom retired with approximately 3.7 million, whereas my dad retired with around 1.4 million
Yes, it's true. In my mid-50s now, my wife and I were on a similar path. In the last two years, I switched to her wealth manager. While I haven't matched her long-term profits, I'm earning more. I'm making money even before retiring, and my retirement fund has grown significantly compared to relying solely on the 401(k).
I discovered her online by searching for her full name. I've sent her an email and scheduled a call; I'm hopeful for a response. My aim is to finish off 2023 on a positive financial note.
@EthertonFORever Consider the potential risk to investors if we (advisors) primarily got paid on profits. Investment is a risk vs. reward equation, so if advisor income would only be based on profits, that means they'd decline to work with people who weren't young enough or comfortable enough to assume higher amounts of risk, and it might even mean trying to steer clients whose investor profile is more moderate towards pursuing riskier investment strategies. That isn't better.
@@Rodxmirixm , don't do it! I lost my shirt with her!
Can barely buy a loaf of eggs for that…
I've been retired for almost nine years now on a State pension combined with SS for me and my wife - I'm in my mid 60's. I believe that the key to a successful retirement is first and foremost be debt free at retirement time. Keep your expectations realistic - there is no "care free" retirement as long as you are still alive, life will always give you new "challenges" to deal with. It's great not having to deal with the BS of the office anymore as well as stupid things like annual performance reviews with "goals for the next year" crap forced on you. Keep a rainy day fund of at least three years worth of expenses just in case.- life has an ironic sense of humor. So far so good!
County Hospital retired RN here ,and have a state pension.Consider myself very lucky indeed. Retired from the bedside at 55,8 yrs ago. Claimed Social Security benefits at 62 .Agree with you being as debt free as possible.Became debt free Sept 2021 ,thanks to the 1-2 punch of my pension and Social Security benefits.
The state retirement system offers a pension vs investment plan,I suggested to former coworkers to stick with the pension plan.
@@christopherhennessey8991 My mom was a nurse’s aid for 36yrs in a MA state hospital, retired in her early 60's due to medical reasons, her body just broke down. She found out she was 4 quarters short to be eligible for SS, so she only gets her pension. I don’t know how much she paid into SS over 36yrs, her contributions may have changed with different union contracts over time, but she worked 36yrs straight, with no periods of leave before retirement. I’m thinking about having a lawyer look into this before she passes on, as she’s in poor health, it just doesn’t seem right to me.
Jeez, you sound just like me, my friend👍
We can't double dip in Ohio😢
@@mikeblack6953 You can get a transcript from SS to find out her earnings over the years.
My husband retired with 4 pensions at age 63. Financial advisor was shocked. I'm still in the working as an office nurse. Blessed for sure.
Hi
I retired with 3 pensions , my wife has two. Being away from the public has made retirement well worth it . Good luck
@@jamesloughnan8993 that's probably what I will have my military, federal government and my VA compensation I'm currently 31 have 10 more years to lock in my first pension.
As a software developer, I accepted lower pay for a job in 2000, but it had a pension. I was able to retire in 2022 thanks to that pension. Unfortunately, due to the low pay, I wasn't able to save much over that time, but I'm about to pay off my house and still have a meager pension to live on. I'm glad to get out of the rat race, at least a little bit.
I retired four years ago after almost 33 years with a large law enforcement agency in Southern California. I was 56 when I retired and my pension is currently 145K a year. My retirement will also pass on to my wife at the same level once I pass away. Defined benefit pensions are the best deal out there for workers, but they are rapidly going away for new hires. Pension Pete definitely has things better than Average Joe.
Micky -- that's awesome. You certainly earned every bit of that pension. Love that your wife will get 100% of that, too. Thanks for serving and protecting!
Of course the big question: have you sold your over priced home and bounced to a better State where your dollars do much more than California?
Agreed 34 years ago everyone said l was making a mistake taking a federal government job vs going to college. I wanted to work so went to college in the evenings, worked my way up the ranks and on track to retire in 3-4 years at 56-57 with a pension, a supplemental payment and tsp account. Because no one is paying pension today everyone wants to work for the federal government and you can’t get through the door 🚪 without a minimum 4 years of college. I am grateful l made the decision.
Dawann -- can't argue with the benefits!
Know of a few that also college grad and took a Zero and also did 20 in the military. How does $2500 to $4000 a month checking deposit sound at the age of 42? Even enlisted is not that bad. $1500 to $2500 on average.
Yes a E-7 at 20 years gets about the same as a captain or navy lieutenant.
You can still go with .gov +.mil combined but even if you get more than GS-12. It will not make up for what combining .mil & .gov gets you. Every 10 years of .gov gets 20% of what the equivalent .mil gets. The good part with .gov is you most likely will end up living where you started. You may not want a all expenses paid tour of the world. Unless you do go for State Department.
Mostly same here. Did 4 years military, stayed reserves and a federal civilian. 35 years military, ( 4 active ,31 reserves), 33.5 years federal civilian .
Retirement in 2 months age 56 ,4 months. Federal pension, supplement, TSP/401k. Reserve pension in under 4 years. Wife collecting 2 pensions plus social security. I look forward to being done.
Just read about pension crashes in the news, the impact is worrisome, cos I rely on pensions. At this point, I'd need diversification ideas for a 350k portfolio, I know it's a good idea to have backup retirement income sources, any suggestions please?
Real estate
Investing in the stock market is the best option to make a passive income. Virtually all the markets are crazy, most people pay more attention to the shiniest position on the graph, I’m keeping a diversified portfolio.
I’m retired. Too many think retirement is a destination, It’s actually a new journey.
To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal.
@@raymondbarnes5264 Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.
@@mariahhayes5089who would you endorse? I've been in the shadows for too long
@@danielkey1463 Very correct.
I have both military and FERS pensions. I made every mistake a person could make in preparation for retirement. Because I have defined benefit pensions, I can retire in comfort. No one has their 401k money at the end.
35 months from my private pension and retirement. Seven years ago we were below broke, big changes have put us in a new house, debt free and ready to go. We started watching every penny and budgeting and it’s actually life changing.
@johnny t -- that's amazing! Congrats on your hard work!!! 🙌
Good for you Johnny!
Both my wife and I planned our careers around pensions. I retired from the military and then retired from the state. My wife retired from the state. We both collect social security. On top of that, we both retired with @ $250,000 each in IRA's. We've been retired for more than 10 years and our IRA's have more than doubled even after taking out funds for European travel and cruises. We only take money from the IRA's for travel and to help our grandkids with education expenses. Our retirements completely cover all our living expenses and we still save @ 3000 per month.
You could make a point that my income could have been much more in a private setting allowing me to invest a larger amount. But our retirements are @ $130,000 and we would have needed $3.4 mil to safely withdraw that.
For us, pensions did make a difference.
Bill -- that's awesome! With this video, I was curious to see what kind of a difference a small pension (similar to the average private sector pension) would make. I'm hearing more and more from people who worked in the public sector. It sounds like the difference is massive. I may have to make a follow-up video on this. Thanks for sharing and congrats on a wonderful, secure retirement! 🙌
Wow, great job saving with two pensions hard to justify Roth conversions. We are MFJ wife will retire end of next year at 59. 5 y/o.My pension is $68000. We will roll over her TIAA 401k & 403b to Vanguard IRA based on my calculations we could convert $35000 yearly a stay in the 12% tax bracket. NJ state taxes are $2800 crazy for that conversation.
Well done
@@PranaWealth Yes, I would strongly suggest that you consider making another video with a State/Fed Pension at least around $4,500/month per individual. $1,000/month is nothing!! But that does NOT include any Medical benefits. NOT everyone that will be getting a Public Pension will also receive medical benefits as well.
@@HB-yq8gy I'm a firm believer in pensions. But, as a recruiter I've seen a big shift over the last 25 years in what employees want. Most younger workers do not want a pension. And when you try to explain to them what it is, they continue to be uninterested. This got so bad, and we were losing out on so many younger workers over this issue, that my employer started giving a "retirement choice". Now new hires can either choose the pension plan (which is very generous) or the 401k-style plan. I'd say about 90% of all of our new hires choose the 401k-style plan. This is why only1 in 5 workers have a pension now.....employees are turning away from these in my experience, but it is inexplicable to me. I will retire in 6 years with a pension that is $120K a year. Or, I have the option of approximately a $2M lump sum payout. I don't understand why this is not attractive to workers today!
My wife and I are both retired from the Army. With our retirement and disability from the Army, we bring home over 130K a year. We both work the federal government now and plan to retire in about 5-7 years. I think our decision to stay in and retire from the Army was the best decision that we could have made for our future.
Wait until she divorces you are takes half of your retirement.
I paid 7% monthly into my pension over 32 years with a county. It earned 8% annually and upon retirement (I was 53 years old) the county matched my contributions and interest at 225%. My current pension nearly matches my net salary (take home). I have additional investments, a Roth IRA and savings. My point is that not all pensions are the same.
Mine is almost exactly like yours at my job with the county.
My pension is about 75% of my take home pay. With SS I make more now than when I worked. I also saved money aggressively in a 457B plan. My job was with a Municipal own Utility ran by a commission.
@Mike Chance -- take that deal all day long!
Very nice, Mike. Retire at 53 that is so awesome.
@@mariex800 it does not suck
I wonder what's the best opportunities to invest now are, there are opinions but a little later I find out these opinions don't matter as a totally different turn of events plays out with the stocks they discussed therein
I’d suggest you look into passive index fund investing and learn some more. Buy Companies stock that you think has huge potential to grow. For me, I hired a stock expert and she provides entry and exit points on the security I focus on while I go about my other businesses. Investing has no one way to do it, eyes on the prize!!! Mistakes are expensive
Hi, please could you share more insight for someone who has been in the red for too long? Also, I could use some referrals, how do I reach the expert that assists you?
The guy suggesting gold is an imbecile.
Index fund investing through thick and thin is the way to go.
Be disciplined. If the market drops stay invested. We've had over 25 bear markets in the last century, and the market has always come back.
We're not even close to a bear market now.
My wife and I have accumulated over 2 million dollars in our 401ks, and neither of us were high earners.
Don't overthink it!
Read some of John (Jack) Bogle's writings.
He's the founder of Vanguard. It's a good place for you to start.
Don’t overthink it and don’t try to time the market. Key is stay in the market and contribute regularly.
One thing people fail to do (especially millennials) is INVEST. I made my first million from blue chips and top etfs using a broker so i invested and re-invested my profits. I also acquired large amount of high-quality dividend-paying stocks too that gives me a solid base of passive income. ever grateful to Olivia Maria Lucas handling my portfolio, two years now and she still surprises me, she's actually the only person i know that's richer than me haha
Wow, great work. you surely made a good bit of money
I did read about Olivia Maria Lucas on the web., quite a great resume she has
Did a quick web search, she has a pretty decent bio, I wrote her and I'm waiting on her reply.
Why is pension payments pension only $1000. don't most public pensions pay sixty or seventy percent of the workers final-salary
@@keithert For the State of Texas employees Pension, for every year we work, we receive 2.3% of our salary. This isn't free, we actually pay just a bit over 10% of or monthly pay.
My wife just retired with 30 years of service or 69% of her income. Not bad if you can get it.
I currently have 22 years of service or 50.6% of my Salary but 25 years is probably the sweet spot. My wife is 55 and I am 56 years old.
My federal pension of $61,200 a year (that I have been receiving since I retired at 52 (adjusted for COLAs) has been the best planning move I ever made. I had thought about leaving ten years from being qualified for a pension until my CPA ran the numbers for me. I would have done ten more years in prison after I saw that. With my wife's social security and my social security, and our modest 401 K added on, we're very comfortable in our retirement.
The game changer for most public workers with pensions is that many get health insurance until they die
I could be wrong, but they get health insurance until medi-care kicks in.
Facts.
Our bargaining unit lost that perk. You are right though. It was a big value.
Every family have that one person whom will break their financial burden, hope you are the person, i most don't worry retirement due to trading, Cause when you invest you're buying a day you don't have to work.
Assets that can make you rich
Bitcoin
Stocks
Real estate
@@allisonmatt6314 Stock's are crashing, Bitcoin investments Right now will be at every wise individuals list, in a month you will be ecstatic with the decision you made today
I wish for a lifetime and afterlife i don't have work for anyone especially my crazy boss
@@allisonmatt6314 You're right, it's obvious a lot of people remain poor due to ignorance
I almost lost my daughter due to my poor financial life, all thanks to Katty for helping me, God bless you abundantly, keep fighting!!!
my current salary is $82,000...my pension benefit per month if I stay 25 years, which is just 5 years away in $3453 per month...why the hell are you showing the guy with the pension only receiving $1000 a month...with my LEO benefit I'll make $60k /yr without even working...these numbers you just showed seemed really low
Retired PO. Pension of 115,000 with a 2.5 cola. Have a little stashed and zero debt with paid off land. Zero debt is the trick
After a 40 year career at AT&T I retired about 10 years ago. AT&T offered their pension payments either as a lump sum (upon retirement) or a monthly annuity. I opted for a lump sum, combined that with my 401K and rolled them both into into an IRA. I feel very, very fortunate to have received a pension. I do like that your analysis considers post retirement spending at 100% of employment spending. If you find that retirement spending is less than what you spent while working you can always adjust IRA distributions accordingly. Nice analysis.
my ex-MIL worked 20yrs at AT&T but was caught making long distance phone calls. She loss het job and pension. Dumb A.
Amazed you survived layoffs. Congrats
@@sunnindawg Thanks - dodging the annual "downsizing" event can be pretty stressful. When I finally decided to retire and hoped I would be selected for that year's force reduction with its associated termination package was the year they decided to not downsize. I retired anyhow and have never regretted making that decision. Life is funny.
My Pension makes a big difference.
Pension +SS+SS is 100.000/yr.
I just retired at age 64 after a 44 year nursing career. The 1st 23 of those years I worked in several no pension private sector positions and the last 21 years worked for the Federal Government/VA.With recent COLA my FERS pension is now $27k. I was suddenly widowed 2 weeks after starting my Fed job, and having my pension allowed me to be able to afford to 1st claim my reduced Social Security survivor's benefit so I can delay claiming my own at 70 estimated to be around $42k and not have to deplete my TSP/401k in the process. And as a single/0 tax filer, at 70 having my SS as my largest income stream, pension 2nd, and TSP withdrawals 3rd I will see more $$ in my pocket than back to Uncle Sam's pocket.
@Nightengale 212 -- So sorry to hear. You were smart to take the survivor's benefit early and allow your Social Security retirement benefit to accrue. Glad you have these income streams for retirement! 🙏
Waiting until you're 70 is exactly what SS wants people to do they're counting on you dying, the sooner the better.
Sorry about your husband but as a fellow federal retiree, that FERS pension along with S.S. and TSP makes retirement financially worry free.
Awesome insight. I was always very skeptical about investing. I would rather just leave money lying in my savings account, but not until I met a friend who really explained to me how much gain I could make investing. I gave it a trial with the help of my financial advisor Christy Vallen D'souza. Now I can proudly say my retirement and other investments are safe, I am not worried about getting old anymore.
I too want a new way to invest, I tried to start my retirement by myself, but it didn't work out well and I also tried real estate same thing happened. The thing now is what do I do? Who do I need to talk to? And how exactly do I begin?
Employ the services of a financial advisor, this was exactly what I did when I decided to begin my retirement. Do this and you are home free.
@Johnny J. WalkerI need the best recommendation you can give. One that I can count on and trust with my money. If you have such, please be so kind to tell me.
Christy Vallen D'souza is the best stockbroker and investments portfolio manager I know. This is because I use her services. She has never failed me. I recommend you try her services. She can be trusted.
What else can you tell me about her services, I am very serious about investing. The money I have now I just want to invest it as quickly as possible.
My pension is such a blessing but it also feels like golden handcuffs because I really want to retire early
@C G -- good point. I guess they want to provide the incentive to keep you there! Hopefully, getting to your full vesting isn't too far out.
This. My husbands pension is matched by the employer and one of the best pensions in Canada . But if we want to see that money we have 18 more years and it just feels impossible sometimes.
@@ayela562 How old are you? 18 years sounds like a long time!! You must be at the beginning of your career?
@@MLopez-fu8fd I worked 39 years with the federal government and retired at 62 in 2021. I could have retired at age 56 in 2015 but at a much reduced rate.
@@jojowhite9296 Right!!! That’s exactly why I’m still stuck where I am because I need the full Pension!! Cannot afford penalties.
I'm so glad I went into the military and got my pension. Best decision ever!!
I have two pensions as a fire fighter retired and as a army veteran. My monthly expenses are 20% of what I bring in every month my healthcare cost from the military is a lot cheaper than through the fire department. I’m happy where I’m at and I have a small 401(k). At 62 and my house is almost paid for.
One key item missing is that many pensions require the worker to contribute a sizeable portion of their pay. When I was a post-doc at a state school, they took 6% of my pay (I will ignore the fact that there was no possibility of vestment, so rather than 15% from the market, I got 1%). But usually in exchange, they offer 30% to 100% of your base pay when you fulfill all the requirements.
If a person has a modest pension that gives them 30% of their highest three base salaries upon full retirement, they can get 25-30% from social security, they only need 40% from personal savings to make up the difference between their working years. This makes saving for retirement so much easier because about 60% of your income is guaranteed (almost) and since expenses typically go down because you no longer need to pay for retirement and savings goals, that can free up 20-30% of your base pay and since taxes are lower for those in retirement, that can free up another 20-30% of pay that you do not need.
For example, if you make $100k per year, about $25k is taken in taxes, and if $30k goes into saving goals including retirement, that means you have been living on $45k per year. If you gain $30k from a pension and $25k from social security, you already have more cash than you had when working less the taxes. If your 401k and other investments give you another $25k per year, most of which are untaxed (if you did Roth) that is an income of $80k, your taxes are 15% of $30k ($4.5k) + 15% of 15% of $30k (I think social security is tax exempt to 85% of your earnings to a certain point, $0.7k) and no taxes on the 401k distribution.
I think for the large majority of people, a pension is a good thing. It forces something to be taken for retirement because we all know that most people are clueless when it comes to long term financial planning. The pension is probably a drag on a financial guru who can probably out perform a pension plan. Government and companies that have pensions probably pay OK to well, but that is about all you can do there. Government will not give you much beyond base pay and modest bonuses and neither will established companies, but established companies can give you stock, but those will not really tip the balance in your favor unless the company experiences large amounts of growth over your career while you own a considerable amount of shares. Start-ups like Google or Tesla is where you want to be if you want to do better than the average, but that is also risky because you do not know who the next Google or Tesla will be, but if you are lucky, that payout becomes your "pension", and a good one at that if you manage it well.
I spent 20 years in the military and unfortunately did not save in a TSP. I am fortunate enough to be retired at age 42 with a pension and 100% disability payment from the VA. I wouldn’t have been able to live my current lifestyle without the VA monthly income. After taxes I am left with about $6,000 a month, I am debt free and just now starting to invest in the market. I don’t plan on working for someone else ever again. I just live a modest life and now invest heavy in the market. I do get a 2-3% raise every year for inflation and this income is for the rest of my life. Pension and VA disability allowed for my past mistakes for not investing. I’m am blessed and now I live a great stress free life while investing while I am retired.
@Thomas Edwards -- so glad you have that monthly income to fall back on. You certainly earned it. Thanks for your service! 🙏🇺🇸
Hoooyah ⚓
You are indeed blessed.
How is being disabled fortunate??
@@gregmacklin9758 The VA disability system is highly exploitable. A paratrooper whose spine compressed two inches over the course of 500 jumps might be declared 30% disabled; a washout trainee who got PTSD from basic might get 100%. It kinda comes down to how much documentation exists and how hard a person fights…to include hiring attorneys who specialize in raising disability percentages.
Wife has a very small pension for her service with the postal service of $6,000 / year. However, the big benefit for us is that we get to maintain her group health care policy, at the groups rate. So in essence her pension covers our medical needs until both of us reach Medicare age, even then we will review her current heath plan benefits vs Medicare. So that was the win for us, medical costs were managed by her pension plan. One caution for pension plans is the horror stories I have heard from some folks who saw their ‘guaranteed’ pension vanish as the company folded or was bought up by another organization. A risk assessment, pensions are a sound choice for a well-established, large organization, a bit riskier for smaller companies.
@Clayton spann -- having that healthcare benefit is huge, especially before age 65. You're right about some of these underfunded pensions. The PBGC will pick them up, but many participants could see their benefits slashed. Good comment! 🙏
That's s low pension average, but it is the average. My pension is extremely beneficial and plays a large role in our investment strategy. I'm a 27 year Active Duty retired E-9. My pension + VA disability is more than $85K annually. That alone is a gold mine. It allows me to be financially independent with nothing else.
An equally impressive benefit is Tricare and its cost! $50 a month for a family medical plan with a $3K catastrophic cap is worth it's weight in gold. I couldn't do that on a $27K pension, so size matters!!
Your pension, disability, and Tricare are well deserved, Rob! Thanks for your service! 🙏🇺🇸
Worked at big tech companies more than a decade, saved up/invested many years, became a Millionaire at age 38. I own a home as well as rental property and 401K. Then 3 years ago I moved to public sector with gov't DBPP pension for better job security. Have no regret since that I made right career move. When your 20 or 30s, go to work for big corps for higher salary but in your 40 and 50s, security and stability matters the most. Recent layoffs in Google, MS and other big techs remind me again that I made right decision.
I'll have 4 income stream when I retire in about 10+ yrs in 50s.
1) Rental property - I'm already collecting monthly rent now.
2) 401K dividend stock in my portfolio
3) DBPP pension by state gov't
4) SS
This was explained very well, you have a new subscriber. Thank you. Well done.
Next week I start my new job with the City. I feel better about being a part of pension plan now.
Awesome! Congrats on the new gig, @Rocky Trail ! 🙌
So glad I stayed enlisted until I was eligible for that pension. That check and my VA disability pay kicked in the day I separated (at the age of 40). It's a nice compliment to the work and investment earnings I currently make. I can't imagine the stress other people must feel trying to plan for retirement in this crazy economy.
Same hear brother. Not to mention health insurance for my entire family at about $52/month.
Y'all earned it, for sure. Thank you both for your service. 🇺🇸
Tons of valuable information, thank you so much. It helped me a lot.
The NC pension fund is number 2 in the USA. It has about 91 billion dollars. We contribute 6 percent with each paycheck. I am going to retire at 56 with 25 years of service and get 80 percent of my income in retirement. I will also have the same insurance plan at no monthly cost to me. I thank God every day for it. 😊😊
Do you have a segment on military high three pension vs the new blended retirement vs something on the civilian side. "Retiring" as early as 38 and starting another career seems amazing. It's hard to explain this to some of our younger generation, but the military pension at 20 years plus an education and experience seems priceless.
The pension reform act of 78 made sure if you called it a pension you had to fund it in some manner. It also put caps on how much you could promise to pay out. Most pensions cap out at 70% of salary if the employee is enrolled in Social Security (almost all employees after 78) which reimburses about 28% of a persons pre-retirement salary.
Getting a full pension is almost like getting paid to stay home.
@Winkkin -- I think it all depends on how the pension plan was written these days. That was certainly the way that they used to do it years ago. I'd venture to guess that's also how most public-sector pensions work these days, though.
I had to watch this video because I always wondered. Thank you!
So thankful I have a pension, along with trad 401k, trad 457, 2 Roth’s and health insurance coverage for life. I think in this current financial environment you better have a 5 legged stool instead of 3.
I’m a pension Pete in one of the solvent Teamsters pension funds. Roughly $80/day that I work is paid into it. After 30 years I’ll receive around $50k a year plus Social Security and my current healthcare will follow me into retirement.
You should do a video on taking a pension lump sum versus the annuity.
Interesting stuff. Love it. Keep it up.
Thanks, @TETrading ! Will do! 🙏
I have a pension, and it does make a difference for me. I never made a salary of 90K; but I also have a RAccount as well, on top of everything and SS each month. It works out very well for me. Nursing hme costs can be handled with LTC insurance, which I have.
Ms. L. Churchill
That's awesome, Ms. Churchill! Sounds like you have retirement well under control!
I work for state government and we contribute 8% gross. This creates a lower taxable gross. We also get healthcare paid when we retired as well after a minimum 20-25 years of state service. The pension formula goes like this=Years of service x Top 3 consecutive years of salary x Multiplier %. For me, it'll be 1% multiplier when I retire at 52 so let's say I make $100k a year and work for 25 years. That's 25 years x $100k x 1%= $25k a year for my pension payout. If I work in private industry and put that 8% in the market and compound it for 25 years at a 7% return, that'll be $507k. Assume a 4% safe withdraw rate, that's $20k a year but with no healthcare.
This is my 23rd year of retirement. Pension, or any other form of income in most cases are
necessary to retire comfortably. It serves as an important supplement to monthly income, and will usually help with the unexpected bills we all have until the day we are gone! If not, it will obviously add to the estate you may have for your benefactors.
I'm Double Dougie, being paid both a military pension (since age 36) and a civil service pension (beginning this year).
For federal employees, the pensions are a lot lower than they used to be since the system was redesigned in 1987. We receive 1% of our highest 3 years of income for each year served. So, if you made $120K (average high 3 years) and worked for 20 years, you'd get an annual pension of $24K. But there are two other factors: federal employees also participate in a defined contribution plan and can now count their civil service time towards Social Security (and they make SSA contributions like everyone else, too).
Ha! Double Dougie! I like it. Thank you for the update on the Federal pension changes, Rich. I was kind of trying to focus on the average private pension in this video, but there seem to be a lot of Federal employees talking benefits in the comments. This is great stuff.
I'm retired on a pension after 20 years as a prosecutor. My pension is about $82,000 a year. Adding that to my social security, I'm just over 6 figures. That's just to wake up and scratch my ass and get a cup of coffee. It would take $2 million in the bank to get $82,000 a year whether it be stocks or some sort of annuity. Cant beat a pension job.
I am Pension Pete except the pension being way more than that. My spouse is Average Angie, not Andy. What we learned is this. We made mistakes early and became self tought on finances over the years. We then focused on making sure our children benefited from time in the martket so there wasn't any more average in retirement. They had Roth IRAs at 16ish and maxed yearly, with us matching the first few years. Low costs index funds and no looking back. Then, we allowed them to gather themselves in their careers and stay at home for a few years rent free as long as they maxed retirement savings and saved for a home. So far so good (great actualy). The point is, if we can't change the past. Help the family tree by changing the future.
Bravo, sir! 🙌 First off, thank you for posting a comment that's positive. But most importantly, kudos to you and Angie for having the wisdom and self-awareness to set the next generation on an amazing path. This comment totally made my day.
I have a pension that pays 925 a month. Now 905. That's because my health care is taken out of my pension. I also get social security which is going up every year. Because I have no loans or mortgages I can live on the $30k, or so a year.
A few things here to mention. Many employers raised their 401K match levels when they reduced the pension availability. I used to work for a company that didnt offer as high a rate of rate company rate for pension eligible employees
I feel so fortunate to have a pension. It will cover about 1/3 of my projected expenses in retirement.
@Stephen Wright -- that's awesome! That'll make things much, much easier in retirement. Thanks for the comment! 🙏
Eligible for retirement at age 49. Fortunately it’s a lifetime pension. Pension will only pay out around $3,500 monthly but will include lifetime FREE health insurance which is a HUGE plus.
I’ve always lived below my means. Living below my means has allowed me to achieve financial freedom. No credit card or student debts, no car payment and most importantly no mortgage. Bought a brand new condo last summer in preparation for retirement and loving it.
Beginning this year I restricted myself to $2,400 net monthly income. The rest of my pay goes into maxing out a 457, paying medical insurance, paying into the pension, state and federal taxes, etc. Reason for living on a budget is to see if I’ll be able to afford retirement. Fortunately, I have been able to live well and still save $$ and increasing my emergency fund even more.
Once I retire, I plan on living in Mexico for 4-6 months out of the year. Basically avoiding the winter months of Colorado. Living in Mexico 4-6 months will allow me to enjoy an even better quality of life on much less $$ and keep saving $$$. In my case, the key to having the opportunity to retire and possibly afford it is being debt free.
The piece of mind, the freedom you experience and have by not being in debt is unlike any feeling/emotion I’ve ever experienced. Remember, it didn’t happen overnight. I’ve been working on it for 18 years. LIVE BELOW YOUR MEANS!!
I retired USAFR at age 38 so I wait until age 60 to get my retirement. For me it's not so much the monthly retirement check I'll be getting as it is that once I start drawing that pay I am eligible to enroll in Tricare Prime or Tricare Select which will reduce our expenses for health care insurance enormously in retirement, costs only $54/month to cover both of us. Before learning about Tricare eligibility I had budgeted annual cost of $15,000 for health care insurance, now reduced to $650 annual.
That's awesome, Jesse. Yeah -- Tricare is a big help when compared to paying for an ACA plan. Thanks for your service! 🙏🇺🇸
Your only key to your plan is not to die before age 60. I'm a retired guardsmen, you would be surprised how many of ARNG soldiers never made to age 60. Also tricare is great a great deal compared to private sector health plans.
Remember that most state and local employees do not pay into Social Security so their benefits check will be very small unless they worked for a number of years in the private sector. However, that is a small price to pay to have a government pension when you retire.
What is a local employee?
@@DoctorSmartyPants city or county employee would be my guess.
Excellent video. I hope your audience includes younger people as well as those of us nearing retirement.
Many years ago, my mother advised me to get a job in the State University System. In addition to a pension, State governments often include retiree health insurance and University systems often include free or reduced cost tuition. Combining those three makes a great foundation for retirement.
Your mom is smart. Salary working for the government may stink, but the retirement benefits can be substantial.
Thanks, @Andrew ! Unfortunately, most folks who watch my channel are between 55 and 70, but there are a few intrepid young people watching. It really does make it so much easier if you start early. Your mom knew what she was talking about when she dropped that wisdom on you back then!
If your mortgage is paid off by the time you retire that's a big help and drop in your living expenses. Buying a home is like saving for retirement in a way as well.
Great call, @TixOn Demand. There can be some instances where carrying the mortgage into retirement makes sense, especially at the low interest rates we've seen recently. I made a video about it: ua-cam.com/video/YQlDg1MxJyo/v-deo.html
However, sleeping well at night counts for a lot!
I will get a FERS pension of about 4500 per month and Social security at 2400 per month and have my 401K too. But Ive stayed in federal service for 30 years. Too many people jump around in jobs for 20 years or more, and that really messes up retirement plans.
They reduced my Mother's SS two 1/3 of her pension because she has a VA Pension. Just some info to plan for a worse case scenario.
Nice work 🎆
Thank you! 🙏
Could you do a video in 457bplans and the best way to utilize them?
I work at a steel mill as a salaried manager. The union workforce has a generous pension of $3000/month but benefits are slowly getting cut. I’m encouraging everyone to save in a 401K to protect themselves from further cuts, especially anyone under 40 years old. I’m 401k only, and have been maxing my account out the last decade. It’s amazing what compounding does!
Matthew -- good call on saving to the 401(k), especially for the younger folks. Let's hope the full $3,000 / month is available for everyone, but it doesn't hurt to have other options!
My college roommate was an intern at Georgetown Steel back in the 90s. (I worked at a paper mill in the summer.) I got to tour the steel mill -- it was a pretty fascinating operation.
They also get SSI along with pension
401k is dependent on Wall Street pensions are conservatively investmented Kentucky hum anti union politicians sabotage
Would you recommend 401 over pension
@@jonny6758 if you’re disciplined enough to save 15-25% every paycheck, yes I recommend it.
I’m fortunate enough to have both a 401k and a pension when I retire.
That's awesome, Roderick! Truly a rarity! 🙌
You earned all of it.
I'm 50, I've had the same job for 30 years and have made a $169 bi-weekly contribution to my public service pension plan for all 30 years. That's 780 payments so far.
My employer matches that contribribution. My pension has a total contributions amount of $263,640.00 I am not allowed to opt-out of pension plan payments.
I will finish paying into my pension plan by law at age 55. (I am not allowed to pay into a public service pension plan for more than 35 years).
Due to stagnant pay and yearly increases to the YMPE of my pension, the value of my pension actually decreases by $72 every month after I turn 55. I plan on retiring at age 65. Due to the YMPE clawback, at the end of my career I will have worked for my employer for 45 years, contributed to the pension for 35 years and my pension will be about $210/month.
A $2520 per year pension. Minus tax.
Pensions are a worthless ponzi scheme.
For what it's worth I retired 7 years ago at age 62. No pension so I went on Social Security right away. My wife retired 2 years later also at 62. She too went on Social Security as well. So far we are having no issues just with our Social Securty.
IMHO the real difference between the two is that pension Pete can allow himself to invest much more aggressively and thus - over the long run AND during retirement - have larger returns on his savings. This makes a huge difference in the real world. I have a solid pension plan to ensure I can withstand some bad investment years and will be 100% in stocks (not counting real estate and the pension plan) with my savings during retirement.
@Mei Bing -- it can also give Pension Pete the luxury of *not* taking risk if he doesn't need/want to do so. Great comment! 🙏
💯 Brilliant!
Excellent point. We have been retired for almost 8 years and lived only on our two pensions. Part of the reason we originally chose our employer as that they offered pensions. We made a little less money because of that but because we knew we had that stability, we kept most of our savings invested in the market all of our working careers. Those savings grew to large totals and we were able to retire mid fifties.
Since we retired, our net worth has doubled. Most of the money is in dividend paying stocks that we DRIP, so that income stream is also increasing regularly for the time when RMDs force us to begin drawing some of it. The security a pension provides allows one to take more risks with the investments and over long periods of time can have a significant impact.
@@davidroush1224 fully agree - the flexibility to increase your long term risk profile is a huge advantage in the long run that too many people overlook.. Good luck.
Didn't have much in terms of personal retirement savings until at 42, I came into my current public sector job which uses a 401a retirement vehicle. The agency pays 8% of my gross pay before overtime, and I pay 12% of my entire gross, which includes overtime. Now being 48 years old, I'm getting more and more engaged in the process of saving with each passing year, so last year I opened up a 457 plan with my employer where I contribute 4%. It seems like a huge chunk of money going into savings, but I feel like I have some catching up to do in order to make it to retirement. Years ago, I worked in a private sector job which will provide a very SMALL pension (I wasn't there more than 6 or 7 years), and I also have a Rollover IRA with an 11k balance. I feel like I have a lot of retirement accounts, but not nearly enough time to save. My goal is to get some side-gigs going and pay off my house before I'm 65 so my expenses are lower. It's still scary.
ALOT OF US DONT UNDERSTAND WHAT FINANCIAL LITERACY IS AND IT IS A VERY BIG PROBLEM ,U DONT ALWAYS HAVE TO HAVE A JOB THAT OFFERS A 401K U HAVE OTHER INVESTMENT VEHICLES THAT CAN SPEED UP RETIREMENT BUT MOST PEOPLE DONT KNOW ABOUT THESE THINGS. U HAVE VANGUARD THAT OFFERS A WIDE VANGUARD VARIETY OF INVESTMENTS I WAS COACHED BY A VERY SUCESSFUL PERSON AND SHE IS RETIRING AT 3O IN THE NEXT 1 YEAR AS A MULTIMILLIONAIRE IN THE US OR A BILLIONAIRE IN JAMAICA THERE IS A LOT OF OPPORTUNITIES OUT THERE
SOME PEOPLE HATE THEIR JOBS BUT BECAUSE WE DONT KNOW THAT WE ALL CAN BECOME SUCESSFUL BY INVESTING, STARTING A BUSINESS AND BUILD WEALTH STOP TRAPPING YOURSELVES BECAUSE OF TRADITIONAL PENSIONS OTHER OPPORTUNITIES ARE OUT THERE
Even though I’ve always been a saver and my wife and I have always LBYM, I was SO fortunate to have received a good pension from my employer of 33 years. Never factored either the pension or social security into our retirement financial planning, so these monthly incomes have been “gravy” on top of what we saved up. In fact, our net worth has actually increased each of the 7 years I’ve been retired. Sadly, pensions are going extinct and too many workers today, for various reasons, are not LBYM or paying themselves first.
Retired at 55 in 2015. 6 figure yearly pension ( building trades ) Yes, pensions Do make a difference!
As a public employee, it’s more than likely Pete will not be retiring at 65 especially if he is a police office as depicted. Also when you talk about spouses splitting the benefit did you factor in the windfall elimination?
Gov jobs are great for pensions, the other jobs being self-employed or working high dollar job for college grad company are good also. It usually depends on your job specialty and skills. But there's three major ways to reach retirement in the workforce, work for the gov, get a good self-employed job that eventually reaches six figures, or get a college degree and work at a specialty job that eventually nets you six figures. All other paths are a waste of time and have consequences later in life. Avoid these paths
Skilled trades are a good path as well, Most notable Union construction. Im a tinner and in the sheet metal workers union our pension pays out at roughly $4000 a month for our local, Journeyman wage is $48.60 an hr on the check. All our retirement plans and healthcare are all self funded. We are payed out as a total package which is around $75hr and then we control which funds are sent where. Our pension is pretty solid because its not based off one employer.
A $90000 civil service income is going to generate a much larger pension than $1000 a month. If you are going to use the median pension in the US for your calculations, you need to also use the median income which is significantly less tha $90k. Your example is biased from the start.
Most state pensions will payout 50-60% percent is the employee works an entire career. At a $90k salary, that would be a $45k pension/yr or around $3800 a month.
I started my 401K at 23 in 1985 and retired early @55 in 2016 with a full pension and $650,000. in my rollover IRA and with DJT in office it turned into 1.2M and then Bone head took over and it closed this past week at $970K. I did start distributions @59.6. and will take SSI at 62 in 2023. My pension is $55K a year with Medical and dental and I am taking $3K a month distribution. I worked 32 years for SWX and heard the company has changed the pension plan for new hires.
Hello, I have a hypothetical question: suppose you had the opportunity to buyback a year to add to your retirement (an additional ($3800 per year for the rest of your life. Assuming I live 30 more years). The upfront cost would be $75,000. Would that be a smart move or keep the $75,000 in a mutual fund and let it grow?
Thank you for your time and helpful content
Thank you
Great video but I think you are missing one thing with the SS calculation on Pete. The Government Pension Offset from SS will knock down Pete's SS payment by as much as $500 although the WEP can reduce that amount depending on the number of years he has substantial contributions.
Great call on the WEP! That's a "gotcha" that's hanging out there for some folks. In this example, I wanted to see how a small private pension would hold up. So, let's assume Pete worked for a private security company...
It also depends if his pension plan even paid into SS.
Any employee hired after 1984 are part of the FERS and also pay into S.S. so they have no offset.
I am grateful for my Army Reserve pension, it has been very helpful.
I’m one of those lucky 12% that has a private pension. They finally stopped adding to it other than interest about a year ago (although they now add the same amount to my 401k) and it’s not huge but will give me some nice guaranteed additional income.
Awesome, @Hilary H ! So nice to have that retirement income! 🙌
Great video. My pension when I leave at 40 from the state police will be 80k a year . I maxed out my 457b as well as IRAs. I’ll be retired at 40!
I just retired at 41, be preppared for the haters!
you cannot claim two equal salaries, differing in benefit - pension, no pension. figure what the cost of the pension to the company is, then treat that as additional salary or matching 401k.
also, many people do not stay long enough to vest in the pension
Great input, Joe! I may make a follow-up... 🙏
Love the Average Andy and Pension Pete examples!!
Thank you @Magenta Otter Travels ! 🙏
Yes,they are a game changer.
Public pensions come with free or subsidizing medical insurance cost. That's a huge benefit that's overlooked. They also come with COLA which is unlikely with private company pension. No doubt Pension Pete got the better position.
I have been retired from public school teaching after 27 years of service. I am grateful for the $19,500/yr I receive as a pension, but its certainly is not going to fund a luxurious life - better have another plan! Also, I do not receive ANY medical benefits/insurance. I will never receive a COLA. Be careful making sweeping generalizations....perhaps this is a difference from state to state? I am in Indiana.
Sorry most public pensions do not come with any medical insurance coverage although some do. Pete will most likely take a $500 hit on his SS too because of the WEP reduction.
@@dking1362 I do not get medical coverage with my pension either but at least I get up to a 4% COLA every year.
@@skibum6422 Good for you! In 25 years, my pension will be worth almost nothing.
I originally wanted this example to reflect what kind of difference a small private pension would make. (Let's assume that Pension Pete was a private security guard? I am already running out of emojis to use!) However, it sounds like I should make a video about public pensions?
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Thank you, for sharing this information however, I noticed one error. If you are able to apply for a local government pension then you will louse some of your social security benefits under the "Wind-Fall" rule. For myself, this will result in about a 20 percent reduction in my social security monthly checks but for others it can be much higher. Your example works fine if, both workers have private employment because the Wind-Fall" rule only applies to State, County, or City pensions. When, I retire in 2-years will be receiving two pensions one from a private company plan (with 15-years of employment) and the other from a City plan (with 20-years of employment).
@transitengineer -- great point here. My intent was to have this be a private pension that's representative of the average pension someone would get from a private company. My oversight was using the policeman emoji to represent Pension Pete. Maybe just think of him as a private security guard!
I believe this the case if your government job does not withhold Social Security tax (or partial?) from your paycheck? If your government job does withhold SS tax and you made substantial contributions for at least 30 years you should not be affected by the SSA Windfall Provision. Anything less than 30 years it is reduced by a diminishing return based on years contributing to SS tax, using your example you had 26 years of contributions.
Windfall penalty only applies if your state/local government employer DIDN’T withold SS in your paycheck. Many actually do/did, so no reduction in SS benefits for those pensioners.
In Europe many countries force people to put money into pension savings. Typically 15-17%. Its works wonders for people in retirement (9% is far too low). Problem in the US is that too many do not have the discipline and/or motivation to save for the pension. Pension plans are still private and individual. But the savings happen. Not so for 401K accounts.
This pretty much sums up the issue!
We have that, its called social security!
@@darylturcott social security is a base line pension. We also have that in Europe. Its the extra mandatory private pensions that will allow those Europeans who have it to have as much - or more - money available in pension as when working. My own public+mandatory life long pension will be around 120% of my salary. That's somewhat above average and in fact too much. But it feels good.
I hate being a cop but love the fact I get to retire years before many of my colleagues with a huge pension. Only thing keeping me in law enforcement honestly lol
I'm a nyc teacher and it's the same for me. Disrepectful supervisors will take the joy out of your life.
I went to the website and couldn't find the downloadable spreadsheet. I have 2 passive incomes (Civilian Pension and Military Pension) so I wanted to see how much I need in my portfolio to retire comfortably.
Love all of your information thank you very much. I feel like I am in a very unique situation. Trust me, I am very blessed on where I am, and where I potentially may be, but I feel that I will really pay the price when it comes to taxes the moment I retire. And the amount that I will be leaving to my children will really take a hit. Do you have any advice on who I can talk to?
really, I have two pensions and I am not a Gov worker...Unions are the best!!Thank you Unions!!
Glad you have some retirement income, @DR. Detroit !
@@PranaWealth nothing in life is guaranteed forever..I am not that oblivious. I save also..
I have friend who retired from the laborers union with a pension, going after #2 with the bricklayers union.
I combined both a unionized federal worker. UNIONS are the BEST!