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Old 09-19-2019, 03:49 AM
Location: R.I.
1,063 posts, read 649,121 times
Reputation: 4631


Originally Posted by reed303 View Post
And what about those of us who have no employer-based pension, public or private, so only have a 2 legged stool with SS and personal savings ? And due to the effect that IRA RMDs have on the taxation of SS benefits, have to "give back" some of that SS benefit ? IOW being penalized for having saved on our own ?

My SS benefit is about 39% of my last working salary. And the RMD driven give back is running about 4.5% a year of SS benefit.

I am a widow/single and at the time I retire I will have worked 1/2 of my 45 year nursing career in the private sector and the 2nd 1/2 for the Federal Government. My employment with the Feds began in 2000 which puts me in the 3 legged stool FERS retirement pension plan. With a little over 23 years of service at retirement the annuity part of my pension will be about 26% of my average high 3 salaries. Unlike the former CSRS retirement plan Social Security is part of the FERS plan along with the 5% match TSP/401K. If I were to take my Social Security at FRA which is when I am retiring that would equal another 26% of my average high 3 salaries, and what I could for the long haul withdraw from my TSP/401K annually would replace another 23% of my income = a total of 75% income replacement. That 25% loss of working to retirement income for me comes out to $28K. Even with a $28K lower income with having to file taxes as single along with 23% of my retire income coming from pre-tax TSP $$, not only will I be paying just about the same Federal and State taxes I do now, my retirement income will bump me up to the next Medicare Part B premium bracket.

You think you are being penalized by having to "give back" some of your SS benefit for having saved on your own, well for me, Uncle Sam gives me a pension but takes back 1/2 if it for taxes and a higher Medicare Part B premium.
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Old 09-19-2019, 05:41 AM
Location: Boston
8,765 posts, read 2,568,301 times
Reputation: 6189
Originally Posted by Burkmere View Post
So you were working for free for a few years because "there was nowhere else you'd rather have been!"
nope, had to be 55 to retire.....
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Old 09-20-2019, 11:22 AM
Location: Coastal New Jersey
57,694 posts, read 55,873,019 times
Reputation: 68754
Originally Posted by westender View Post
Exactly, and this summarizes the thread nicely.

As time goes on, the working classes are being required to pay heavy taxes to support government retirees pensions. It is not politically sustainable, and it is not financially sustainable.
I do think many systems recognize that. For example, newer employees in the NYS system cannot retire with full benefits at 55 even if they have 30 years, as we could, nor will they get their health insurance paid for in retirement. Now full benefits are only possible at 62, and they have to contribute if they opt to keep the health insurance. Plus they have optional deferred compensation plans in which to participate.
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Old Today, 02:31 PM
Location: Florida and New England
1,288 posts, read 1,455,861 times
Reputation: 1767
Some states are in much better shape than other states. Which points to a different problem. If a state sees a significant drop in its pension contributors (for example, a state which is losing population), should the pensions be adjusted accordingly? Otherwise, the remaining taxpayers must support a higher and higher tax burden.
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Old Today, 02:43 PM
346 posts, read 158,300 times
Reputation: 779
This point was brought up by Warren Buffett. Someone setting up a business in a state with a large pension burden would be a target for taxes.
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