Tough time for California retirees (Berkeley: sale, rental, house)

[Curmudgeon]

No surprise here. It's a shame.

Capitol Alert: UC Berkeley report sees tough times for California retirees

[BeauCharles]

I have my house paid for and a 401(K) with a 100% company match for the first 3% and 50% for the next 2% (fully vested). Retirement is still several decades off, but its not all gloom and doom for everyone. I'm one of those weird Gen Xers who lives as frugally as my WWII era parents did.

[NewToCA]

Not uniquely a California problem, but to me this is actually one of the top issues we don't constructively address as a society.

All of the focus on excesses in public pensions misses the main point that most folks don't have adequate pensions themselves.

The United Kingdom recently attempted to addressed this issue with their "Nest" program:

Private pensions to become compulsory for workers | Money | guardian.co.uk

About a year ago, I read (and posted about) a similar proposal made by a think tank concerning US workers. I recall it being something like all employers and employees pay 3% into a fund, and the Government being responsible for assuring it grows at the rate of inflation plus a percent or two.

Even the rather conservative Kiplinger's advocates a similar program though. Their proposal was:

Workers would be required to make a pretax contribution to their account (say, 3% of their earnings), which would automatically rise with age and income toward 6% or more. Employers would be required to make a similar cash contribution. Companies and workers could both contribute more, with no limit.

http://www.kiplinger.com/columns/poi...#ixzz1Zp0n03Ug

By the way, Kiplinger provides a similar plan to all of their employees themselves.

[Curmudgeon]

Originally Posted by NewToCA

Not uniquely a California problem, but to me this is actually one of the top issues we don't constructively address as a society.

All of the focus on excesses in public pensions misses the main point that most folks don't have adequate pensions themselves.

The United Kingdom recently attempted to addressed this issue with their "Nest" program:

Private pensions to become compulsory for workers | Money | guardian.co.uk

About a year ago, I read (and posted about) a similar proposal made by a think tank concerning US workers. I recall it being something like all employers and employees pay 3% into a fund, and the Government being responsible for assuring it grows at the rate of inflation plus a percent or two.

I'll see if I can find that again later today, not stating I support the proposal but I thought the ideas had some merit.

Agreed. The idea has merit. Too bad the Congress doesn't. They'd likely raid it for pork as they've done with the Social Security trust.

[NewToCA]

Originally Posted by Curmudgeon

Agreed. The idea has merit. Too bad the Congress doesn't. They'd likely raid it for pork as they've done with the Social Security trust.

Unfortunately, you're probably right. Kiplinger's espouses placing the money in "lifecycle accounts" (stocks, bonds, money market) that adjust with age.

[MsIzzy]

Originally Posted by BeauCharles

I have my house paid for and a 401(K) with a 100% company match for the first 3% and 50% for the next 2% (fully vested). Retirement is still several decades off, but its not all gloom and doom for everyone. I'm one of those weird Gen Xers who lives as frugally as my WWII era parents did.

Wonderful!

You're not the only one. We are like that and so are our kids. They were taught from early on that squandering money would make others richer while they will be poorer. We travel quite a bit, and most of our friends wonder how that is possible. Duhh...we save for our trips. I don't replace every darn thing in the house as soon as the latest model comes out I do buy designer stuff though at outlet prices, and even so, it's gotta be on sale or marked down!

Originally Posted by NewToCA

Unfortunately, you're probably right. Kiplinger's espouses placing the money in "lifecycle accounts" (stocks, bonds, money market) that adjust with age.

One of the reasons we're thinking of taking a better paying job in California is because we need to save for retirement. I've never understood waiting on the government for anything to be honest.

[Fred314X]

Originally Posted by Curmudgeon

No surprise here. It's a shame.

Capitol Alert: UC Berkeley report sees tough times for California retirees

It's even tougher than that! California happens to be one of those states that doesn't exempt pensions from taxation. (Why anyone would retire to a state that taxes your pension is a mystery to me...but then, there's no accounting for peoples' behavior, is there?)

[alexxiz]

Originally Posted by BeauCharles

I have my house paid for and a 401(K) with a 100% company match for the first 3% and 50% for the next 2% (fully vested). Retirement is still several decades off, but its not all gloom and doom for everyone. I'm one of those weird Gen Xers who lives as frugally as my WWII era parents did.

It's not about living frugally, unfortunately, considering how unstable this economy is, rental and RE prices and taxes.... People who lived off disability income all their life, while working under the table, are doing better off that someone who worked all their life here, this is reality, I've seen this so many times. I'm a single-income engineer and don't see much future for myself in CA, yet have to stick with the state as jobs in my field are here, as unstable as they are. I was lucky to get small inheritance allowing to buy some RE, otherwise I'd seriously consider jumping off the tall building, as, after taxes, rent and other expenses in Bay area I'd have just enough to save for a nice cemetery lot and a coffin, in California.

[18Montclair]

Originally Posted by NewToCA

Not uniquely a California problem.

Precisely.

Retirees everywhere are having a tough time.

[Ultrarunner]

Originally Posted by Fred314X

It's even tougher than that! California happens to be one of those states that doesn't exempt pensions from taxation. (Why anyone would retire to a state that taxes your pension is a mystery to me...but then, there's no accounting for peoples' behavior, is there?)

Probably because many have no pension...

The only people I know are retired Utility and Goverment employees...

I had a pension through the Union at one time... needed 7 years to be vested... shop closed when I had 4 years in... all that money is not accessible to me...