Work for the state, Retire at 55, take in $1million in retirement benefits (Davis: credit, employment)
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Work for the state, Retire at 55, take in $1million in retirement benefits
Some people want to know why we are in a financial mess in California. Here is one thing that may have placed us there, and we can thank Grey Davis for this one.
A state employee can retire at age 55 with full retirement benefits. They will have an income of $3,000 a month for life. Live to age 83 and the state paid out over $1million in guarenteed income. I would love to have that kind of deal. I would have figured that the state would have realized that people are living longer. A better deal for we the people who are paying for this, would have been to let them have jobs untill they are 75 and then if they saved for retirement they could retire. Like everyone else in this state. I say that if you want to retire early, go for it. Just make sure that you have saved the money that you will need to retire and don't place this burden on the backs of the working class of the state.
By the way, their are over 240,000 state employees that will be eligible for this when they retire.
The tax payers will be paying for the public workers high pensions. I heard about this on kfi. Its crazy but the state will do nothing about it. The only solution is to go bankrupt or raise taxes.
Its going to get alot worse in ca especially if that clown jerry brown is elected govenor.
Some people want to know why we are in a financial mess in California. Here is one thing that may have placed us there, and we can thank Grey Davis for this one.
A state employee can retire at age 55 with full retirement benefits. They will have an income of $3,000 a month for life. Live to age 83 and the state paid out over $1million in guarenteed income. I would love to have that kind of deal. I would have figured that the state would have realized that people are living longer. A better deal for we the people who are paying for this, would have been to let them have jobs untill they are 75 and then if they saved for retirement they could retire. Like everyone else in this state. I say that if you want to retire early, go for it. Just make sure that you have saved the money that you will need to retire and don't place this burden on the backs of the working class of the state.
By the way, their are over 240,000 state employees that will be eligible for this when they retire.
Stir! Stir! Stir! One similar thread starts to wind down a bit so naturally, someone has to start another one to keep the ill feelings, envy and hatred alive. How commendable.
Now that I think about it, I'm not even going to correct the fallacy of your rant because it would fall on deaf ears. But I will say that like just about everyone else in the state, you could have made the same choice.
Quote:
Originally Posted by steel7
The tax payers will be paying for the public workers high pensions. I heard about this on kfi. Its crazy but the state will do nothing about it. The only solution is to go bankrupt or raise taxes.
Its going to get alot worse in ca especially if that clown jerry brown is elected govenor.
And just what do you think are the odds that the people of Kahleefornia will remember or even care that Jerry Brown got them into the mess with government employees unions and collective bargaining in the first place? I'll give it the same odds that the same folk will never see any correlation between all the unfunded mandates and categorical spending initiatives they've passed and the dismal state of the state's finances.
Some people want to know why we are in a financial mess in California. Here is one thing that may have placed us there, and we can thank Grey Davis for this one.
A state employee can retire at age 55 with full retirement benefits. They will have an income of $3,000 a month for life. Live to age 83 and the state paid out over $1million in guarenteed income. I would love to have that kind of deal. I would have figured that the state would have realized that people are living longer. A better deal for we the people who are paying for this, would have been to let them have jobs untill they are 75 and then if they saved for retirement they could retire. Like everyone else in this state. I say that if you want to retire early, go for it. Just make sure that you have saved the money that you will need to retire and don't place this burden on the backs of the working class of the state.
By the way, their are over 240,000 state employees that will be eligible for this when they retire.
Rather than get into the middle of a back and forth on this, like often happens in the reader comments section of our major daily papers, I'd like to ask why you think this "problem" is unique to California?
To give you an assist, since you look forward to moving to Arizona, here are the pension benefits in your anticipated home:
As a defined benefit retirement plan, the ASRS pays retirement benefits determined by a set formula. A member’s benefit is equal to the average monthly compensation multiplied by the total credited service multiplied by a factor set by statute.
Retirement Benefit = Average Monthly Compensation X Total Service Credit X Multiplier
The average monthly compensation is equal to the average amount paid over the highest 36 or 60 consecutive months.
Credited service is determined from the period of employment during which the employee was a member making the required contributions to the Plan, plus any other service purchased.
A graded multiplier is determined by years of credited service: 2.1% for 0.1-19.99 years of service;
2.15% for 20-24.99 years; 2.2% for 25-29.99 years, and 2.3% for 30+ years of service.
Some people want to know why we are in a financial mess in California. Here is one thing that may have placed us there, and we can thank Grey Davis for this one.
A state employee can retire at age 55 with full retirement benefits. They will have an income of $3,000 a month for life. Live to age 83 and the state paid out over $1million in guarenteed income. I would love to have that kind of deal. I would have figured that the state would have realized that people are living longer. A better deal for we the people who are paying for this, would have been to let them have jobs untill they are 75 and then if they saved for retirement they could retire. Like everyone else in this state. I say that if you want to retire early, go for it. Just make sure that you have saved the money that you will need to retire and don't place this burden on the backs of the working class of the state.
By the way, their are over 240,000 state employees that will be eligible for this when they retire.
I wonder how different this is than any private corporate employee for a big company like Boeing or Lockheed. I think there is definition of full retirement (someone chime in with the right numbers if I got these wrong) of sum of years with company + age = 85. So, if you start you at 25 and work 30 years, 30 +55 = 85 you're set. That's full pension and some large companies do better matching in 401(k)s than public employees' 403(b)s or TSPs.
Also, all that money I think is going to be taxed at ordinary income so they'll be taxed on it.
Historically, state and federal workers, earn less than their privately employed counterparts.
Finally, any one of us had the chance at that type of deal and had the freedom to choose not to take it.
Some people want to know why we are in a financial mess in California. Here is one thing that may have placed us there, and we can thank Grey Davis for this one.
A state employee can retire at age 55 with full retirement benefits. They will have an income of $3,000 a month for life. Live to age 83 and the state paid out over $1million in guarenteed income.
First of all, this is not quite true. Feel free to play with this calculator:
You can easily see that benefits depend on retirement age, even after the age of 55.
It is true that a sufficiently well compensated state employee can retire on a $3,000/month pension at 55 after, say, 20 years of service. He'd have to earn around 80k/year at retirement, but it is possible.
Does this have anything to do with the financial mess we're in in California? Well, not quite. The reason is that the retirement plan for those employees is NOT funded out of the state budget. It is essentially a glorified 401k. Like any 401k, it is funded by member & employer contributions. California does have a generous contribution matching program. That is true. However, it pays less to state employees than they can generally make in the private sector (e.g. teachers with masters' degrees start below 45k/year in most districts) so it's basically a wash.
Here's a simple calculation. Suppose you get a job that pays 45k/year at the age of 35, you hold on to it for 20 years, you get 3% raises every year, you open a 401k, you contribute 10% of your gross income into the 401k plan, your employer matches your contribution dollar-by-dollar, and the plan manages to achieve a 6%/year average return on investment.
By the time you're 55, you'll have around $450,000 in the 401k, and that amount will keep growing, and you'll be able to draw $3,000/month on that fund continuously till 75 before it is exhausted. Without the need for any taxpayer money.
The key is to save early and to save a lot. If you blow all your money on toys and booze and you end up with no savings at 55, whereas gubmint employees were forced to contribute to their own pension plans ... gubmint is not the problem, you are.
Finally, your presumption seems to be that you actually _can_ retire on $3,000/month at 55 in this country. If you think you can, you never tried to shop for an individual health plan that covers, say, 60 year olds with all their assorted preexisting conditions. Most likely, state employees try to hold on to their jobs till 65, when Medicare kicks in. So that leaves them with 10-15 years of retirement benefits.
Last edited by esmith143; 08-29-2010 at 09:21 PM..
You can easily see that benefits depend on retirement age, even after the age of 55.
It is true that a sufficiently well compensated state employee can retire on a $3,000/month pension at 55 after, say, 20 years of service. He'd have to earn around 80k/year at retirement, but it is possible.
Does this have anything to do with the financial mess we're in in California? Well, not quite. The reason is that the retirement plan for those employees is NOT funded out of the state budget. It is essentially a glorified 401k. Like any 401k, it is funded by member & employer contributions. California does have a generous contribution matching program. That is true. However, it pays less to state employees than they can generally make in the private sector (e.g. teachers with masters' degrees start below 45k/year in most districts) so it's basically a wash.
Here's a simple calculation. Suppose you get a job that pays 45k/year at the age of 35, you hold on to it for 20 years, you get 3% raises every year, you open a 401k, you contribute 10% of your gross income into the 401k plan, your employer matches your contribution dollar-by-dollar, and the plan manages to achieve a 6%/year average return on investment.
By the time you're 55, you'll have around $450,000 in the 401k, and that amount will keep growing, and you'll be able to draw $3,000/month on that fund continuously till 75 before it is exhausted. Without the need for any taxpayer money.
The key is to save early and to save a lot. If you blow all your money on toys and booze and you end up with no savings at 55, whereas gubmint employees were forced to contribute to their own pension plans ... gubmint is not the problem, you are.
So the $1M is the retirement plan and not the pension? I'm glad I don't work for the state then. Big aerospace companies provide both.
So the $1M is the retirement plan and not the pension? I'm glad I don't work for the state then. Big aerospace companies provide both.
Correct. The employee pays a set percentage of his/her pay into retirement each month. The state provides matching funds, but not always. CalPERS has, in the past, said the fund was strong enough that the state didn't have to pay anything into it.
What the employee pays into the system is theirs regardless of whether they retire or leave early and cash-out.
I'd have to live to be over 100 to get $1 million in pension funds from the state. Since the average age at death of men in my family has been 71, the chances are I'll fall a bit short of that.
In all fairness I have to point out that we do receive medical benefits with no premium in retirement but we do have co-pays and deductibles if we live outside of the state or in isolated areas.
Stir! Stir! Stir! One similar thread starts to wind down a bit so naturally, someone has to start another one to keep the ill feelings, envy and hatred alive. How commendable.
Now that I think about it, I'm not even going to correct the fallacy of your rant because it would fall on deaf ears. But I will say that like just about everyone else in the state, you could have made the same choice.
And just what do you think are the odds that the people of Kahleefornia will remember or even care that Jerry Brown got them into the mess with government employees unions and collective bargaining in the first place? I'll give it the same odds that the same folk will never see any correlation between all the unfunded mandates and categorical spending initiatives they've passed and the dismal state of the state's finances.
Well, the joke is going to be on you and all those state pensioners who think they have it made when the state cannot cut the checks anymore. That day WILL come, and when it does, California will turn into another Greece.
You can sit there and mock all you want. Laws of economics, budgeting, and math will make your mockery the ignorant post that it so glaringly is.
Well, the joke is going to be on you and all those state pensioners who think they have it made when the state cannot cut the checks anymore. That day WILL come, and when it does, California will turn into another Greece.
You can sit there and mock all you want. Laws of economics, budgeting, and math will make your mockery the ignorant post that it so glaringly is.
Heard this all before in other threads and there's no mocking involved, just reality.
The state is only the purveyor of the retirement instruments through the State Controller. CalPERS provides the funds. By the way, regardless of the state of the exchequer, the state is obligated to make good on the pensions and benefits even if other things must go unfunded.
The true ignorance is in your doom-and-gloom scenario.
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