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Unread 07-02-2011, 08:45 PM
 
632 posts, read 981,553 times
Reputation: 637
Quote:
Originally Posted by Zarathu View Post
But you have to start putting away 10 to 11% of your income after taxes to make this happen. Lots of people do it.
It makes my head hurt to try and follow your logic...why would an educator put after tax money away when they can put pre-tax money into a 403B and not pay taxes on it until withdrawn, and reduce their taxable income during their wage earning years??? Please explain in simple terms...
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Unread 07-02-2011, 09:04 PM
 
Location: Forests of Maine
20,929 posts, read 24,640,838 times
Reputation: 8088
Quote:
Originally Posted by kellysmith View Post
It makes my head hurt to try and follow your logic...why would an educator put after tax money away when they can put pre-tax money into a 403B and not pay taxes on it until withdrawn, and reduce their taxable income during their wage earning years??? Please explain in simple terms...
Or invest in tax-shelters so you are not paying income taxes to begin with.

Which will increase your take home pay, and allow you to invest 20% [or more] of your gross pay.
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Unread 07-02-2011, 09:59 PM
 
Location: South Portland, Maine
2,321 posts, read 3,128,715 times
Reputation: 1429
Quote:
Originally Posted by maine4.us View Post
Money magazine is obviously for the people with money, as the figures quoted from it must have come from on high. I will agree that the more education one attained, the greater the retirement, but that is not true in every case.

For those who worked in the much despised (as of late) public sector those figures do not apply at all. I am tired of all the public workers getting dumped on. I spent 38 years in the employ of government, and let me tell you what I don't get: 1) free health insurance, I get a measley $5 per year of service up to 30 years, math wizards do the math, that's $150 a month.

2) I got 1.6% per year of service for a maximum of 33 years based on my highest 5 years of salary - that's not even near 45K a year. By the way, my last 5 years of service did nothing to enhance my retirement.

3) the only reason I get as much retirement as I do is because I worked as additionally as needed for the government at a reduced salary for over 20 years. Yes, I double dipped, because I worked 2 separate jobs. By the way, there was no overtime, it was acutally about 2/3 or less of my regular salary.

I paid approximately 50% of my health insurance out of my own pocket, and to get decent health insurance, I paid 100% of the cost of "Premium" health care. Right now a catastrophic policy costs me $700+ a month minus the $150. By the way, that $150 isn't guaranteed, as the state legislature can take it away at will.

Even if I was able to add the $1300 a month SS benefits I am eligible for, I don't approach 45K. By the way, since I have another retirement, SS benefits will be reduced for me, even though I paid in at the same rate as everyone else.

I don't know where people are getting all this misinformation about public employees, but speaking personally, its a bunch of poop. Those figures must be based on the administrative types that serve the governor, you know the ones with 6 figure salaries?? By the way, LePages' daughter at 41K a year as an adviser is a real steal, most advisers make much more than that.

Now, back to Maine. Taxes in Maine are the way they are because we are such a rural state, outside of that famous imaginary Volvo line. As long as Maine's rural residents want the same services as the densely populated part of the state, taxes will be high, period. Do the math...its simple division, the more people you have, the less each one pays, the fewer the number of people, the greater each person's share becomes.

End of Rant
This is a great post! Other than being very top heavy and in some cases too many employees... I see little benifit from working for the government for 30 or 40 years vs the private sector...

I think the reason Maine government workers get such a bad rap is in part because of the government workers from other states that people here about.. I "think" assumptions are made about Maine government workers..

Maine has one of the worst public retirement plans I am aware of... I know they offer more than one but case in point..... the teachers retirement was lack luster before lepage decided to make it worse...

There are so many entry level workers in Maine who are paid medicore wages.... the fact that some small town in northern Maine which has no real industry and has an average private sector income of only $8 an hour does little in the way to sway me into thinking the state worker who is making $11 is somehow getting away with something...

I like 90% of what lepage has accomplished so far but really... attacking the retirement system for which the state has benifited from because of NOT having to pay into the social scurity system... was wring IMHO..

did the governor make any changes to the "governors" special retirement which states that ANY former governor or SPOUSE of a former governor recieves 3/8 the salary of the current governor at age 60??
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Unread 07-03-2011, 06:36 AM
 
Location: North Carolina
356 posts, read 264,804 times
Reputation: 309
The way I read it was that if you had a PhD your employer provided a 60k per year retirement, I was not aware we were talking investments. It was a feeble attempt at humor.
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Unread 07-03-2011, 07:13 AM
 
Location: Bar Harbor, ME
1,922 posts, read 1,972,811 times
Reputation: 1227
PEOPLE read into posts what they want to read. A simple post that stated that Money Magazine said that the higher the education level the higher your retirement tends to be on average, produces all kinds of read between the lines agenda-ized statements.

A simple statement that says that if you take 10-11% of your income and save/invest it or 40 years will generally give you, along with your social security payments, somewhere between 50-60,000 for 25 years after retirement, is turned into all kinds of other agenda-ized statements.

It is what it is.
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Unread 07-03-2011, 02:44 PM
 
Location: North Carolina
356 posts, read 264,804 times
Reputation: 309
Thanks for the clarification. I see you are a very knowledgeable person who knows quite a bit about what others should be reading, and investing their money into. I should have run into you a long time ago, then I wouldn't be the looser I have become without your keen insight. I am awed by you superior intellect and stand corrected and humbled by your vast knowledge base.

PS don't worry about me, I'll get by on cat food!
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Unread 07-03-2011, 04:21 PM
 
4,777 posts, read 2,091,440 times
Reputation: 9679
Quote:
Originally Posted by Zarathu View Post
PEOPLE read into posts what they want to read. A simple post that stated that Money Magazine said that the higher the education level the higher your retirement tends to be on average, produces all kinds of read between the lines agenda-ized statements.

A simple statement that says that if you take 10-11% of your income and save/invest it or 40 years will generally give you, along with your social security payments, somewhere between 50-60,000 for 25 years after retirement, is turned into all kinds of other agenda-ized statements.

It is what it is.


sounds good in theory but for a 65 yr old to have saved for 40 yrs, they would have started at 25. With college loans, kids, maybe some aged parents or other expenses thrown in. Possible? Maybe.
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Unread 07-03-2011, 05:35 PM
 
Location: Eastport, Maine
1,128 posts, read 1,333,218 times
Reputation: 1015
Well, I guess I was in the wrong job, I didn't bust 10K a year until 1982.....hum...at the rate of interest paid, and 10% of after tax for savings, .....ran it through a spreadsheet, and nope, sorry Z, those number just don't work....didn't bust 45K until 1995....and with the loss of the market tech boom bust......pie in the sky data. Most investers were just getting over the 1999 tech boom bust in 2007 , and then, kablooey again....If I live another 20 years, I would have to have 600K in the bank (today at 1.8%) to make 60K a year retirement. I would have to be drawing $2800 a month on investments.

BTW, it ain't what it ain't.....

Sorry to be so far off topic, but my Maine baloney meter is pegged.
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Unread 07-04-2011, 06:52 AM
 
Location: Eastport, Maine
1,128 posts, read 1,333,218 times
Reputation: 1015
Another interesting note. For those of you who pre-tax your 4XX-B or K accounts, if you are eligible for SSI benefits, you lower your benefit by doing this. Your last years of employment you need to so the maximum amount of income. All the pre-tax cafeteria deductions to lower your income become a moot point after a few years of retirement. Maine opting out of SS for its employees did not do them a service. I have retired friends in Maine and they wish they had been able to participate in the SS program. There really isn't a way to "beat" the tax game. You can pay them now or you will pay them later.
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Unread 07-04-2011, 09:01 AM
 
Location: Bar Harbor, ME
1,922 posts, read 1,972,811 times
Reputation: 1227
Quote:
Originally Posted by PAhippo View Post
sounds good in theory but for a 65 yr old to have saved for 40 yrs, they would have started at 25. With college loans, kids, maybe some aged parents or other expenses thrown in. Possible? Maybe.
11% after taxes was taken out of my paycheck for 33 years. I had two kids, and college expenses, and I bought a house in between and paid a mortgage. Some of the early time, we ate kraft mac and chesse every night for dinner.
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