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My sister has a $60,000 a year pension. With medical that she pays $300 for a ultra Cadillac plan. She has a masters and she worked special ed most of her career. She took an early buy out at 58. Retired but working a $10 a hour job now as an adjunct professor for an online college course. This is what she tells me.
She thinks she doesn't have enough money to live on. Has no children no husband.
In debt $100,000.
Go figure.
The biggest question is why she has 100K debt. To me the golden rule is to never retire unless you are debt free.
The biggest question is why she has 100K debt. To me the golden rule is to never retire unless you are debt free.
No not at all. Not a golden rule but a guideline for some. In fact retired public pensioners are often a better credit risk than other retirees and quite possibly are in the best credit status of their life. I am not being specific to the sister being discussed because there are to many unknowns.
A combined pension and SS is a much more stable source of income than a job is. Millions lose their job and are unable to pay their debts but how many folks in comparison have lost their pension and SS?
Depending on sources of income and availablle portfolio funds a six figure debt amount could be minimal if in a mortgage especially at the lower fixed interest rates of late. For retirees, like working folks debt/income ratio is all important as is credit score. If the lady in this case has a 60K income and SS coming in soon and a portfolio of 500K that debt level is not the same as it might be for someone with more or less resources.
Retirement financial life can be the same for working retirement life if not better. No kids, no college to pay for etc etc etc.
Did you mean $60,000 gross or $60,000 net is a gigantic sum to live on?
ER, I suspect you will understand what could be the scenario in this case. Imagine youself with a pension from a Social Security contributory state. You get your pension statements and your SS benefit statements. You are 58 and planning to retire at say 62. You know what your combined income at that age will be and all is good. Along comes your school district wanting to cut salaries and save money. They hire one of the consulting firms that manage this and they advise they can offer a early retirement buyout payable either in a lump sum or over five years. You are now four years from SS with just a pension and your savings and the buy out. So you figure it out and decide you can do it and get a partime job to supplement your pension and buyout until SS kicks in.
So you tell your family including your sister and mention the 60K pension as not being adequate and you are going to work and your sister hears 60k and goes my gosh that is a lot why aren't you happy?
Who cares if "it's below the average household income"? $60,000 per year is a gigantic sum of money to be living on in retirement. Especially with paid medical, but even without paid medical.
(no need for people living in New York City and San Francisco to pipe up)
And also in retirement, one should not automatically expect to have an amount similar to what their job salary was.
It's not a "gigantic" sum lol. (NJ). But it should be enough to live comfortably, even here. If you don't have massive debt, of course.
Last edited by Mightyqueen801; 03-27-2017 at 01:14 PM..
The biggest question is why she has 100K debt. To me the golden rule is to never retire unless you are debt free.
It's a good rule, in general. Didn't work for me, though.
I retired a little over a year ago with a significant amount of debt. I now work part-time and no longer have to pay the $400+ a month for commuting or the $400+ a month for health insurance. In the end, I calculated that my take home in retirement would only be $10-$15k less a year. Give up 4 hours a day commuting for that? Yup. I figured I'd find a job to hit the debt. I had 9 years before I could collect full SS.
Then I got a job offer out of the blue. 25 hours a week, 2 days at the office, 2 days at home. Half the debt is gone. The rest should be by the end of the year. And I have much more TIME.
There are so many different public pension plans with so many different formulas, contribution rates and whether health care is included or not that most of these posts started to complain are based on ignorance.
IMHO if you are going to complain at least know the basic formula of the plan you are complaining about.
It's impossible to have a fair conversation concerning state and local government pensions, on a forum that encompasses the entire nation.
It's impossible to have a fair conversation concerning state and local government pensions, on a forum that encompasses the entire nation.
You may well be right, but some people could try a little harder for that "fair conversation", and I believe we could come somewhat closer to it.
Cost of living and prevailing wages differ so much across this country, which makes it important to define our terms on the one hand, and to stick to the standard meaning of words on the other hand. For example, I am still shaking my head about that "gigantic" $60,000 pension.
Here are some adjectives which I would apply to a pension of that amount: comfortable, ample, adequate, decent. Not all four adjectives mean exactly the same thing, but they reside within a reasonable range to describe that amount of money in the United States of 2017.
"Gigantic" does not reside within that reasonable range. Gignatic implies luxurious, well-to-do, rolling in money. The use of language in that way just sidetracks us into the sort of semantic discussions which I admit I am engaging in right now.
LOL @ ER! My adjectives and thoughts exactly. Without details, worthless. $60k and no/little SS IS decent. With SS, (which would be ample, in order to warrant a $60k pension) more than adequate.
Have a relative (retired teacher) with numbers lower but similar in magnitude. Little savings, if debt was paid off. (Another thing I dont get. Who has thousands and thousands in CC debt, but similar magnitudes saved in retirement ? Loved to "brag" about the savings, but ignores the debt fact. Crazy.). She says the same thing. Stays married to a man she tells everyone she can't stand, but says she could never live on just her income.
The OP seems to have an agenda, and is using an anecdote from a single web article to support it. Haven't we dumped on teachers enough? They are entrusted with the care of children in schools so poorly funded that teachers have to draw from their own diminished wages for basic teaching supplies. They make - what? - $50,000? If we want to rant about their pensions, let's up their salaries to reflect the central role they play in equippping future generations with the skills needed to operate in the world the will one day inherit.
I am not a teacher, nor am I a child or spouse of one. I am, however, the product of public schools, where I received an education so valuable that it prepared me to comfortably retire from the private sector with a pension at the tender age of 55.
The OP seems to have an agenda, and is using an anecdote from a single web article to support it. Haven't we dumped on teachers enough? They are entrusted with the care of children in schools so poorly funded that teachers have to draw from their own diminished wages for basic teaching supplies. They make - what? - $50,000? If we want to rant about their pensions, let's up their salaries to reflect the central role they play in equippping future generations with the skills needed to operate in the world the will one day inherit.
I am not a teacher, nor am I a child or spouse of one. I am, however, the product of public schools, where I received an education so valuable that it prepared me to comfortably retire from the private sector with a pension at the tender age of 55.
Your last paragraph says it all. You had access to a quality education and used your personal character traits to take advantage of it and the employment opportunities that followed. You were a winner and unfortunately as any educator can tell you not all have elected to follow your path. Those who hated teachers in high school probably still hate them when it is time for those teachers to retire.
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