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For multiple reasons I have studied and looked at public pensions in dozens of states and calculated benefits in them. They are all over the board and comparing is near impossible. You can compare contribution rates and you can compare the forumula used to calculate benefits and that is a really incomplete picture because salary scales vary from state to state and from local government to local government if local employees ( especially) teachers receive their benefits from the state. Some states have higher pensions and no health care. It is all so specific and so individual. Remember the formula whatever it is varies from state to state and the salary it is applied to varies.
This is definitely the conventional wisdom, but I don't believe it completely. SOME higher-level public-sector jobs pay much less than similar private-sector jobs, e.g. being a public defender or an ADA vs. working as a corporate lawyer, but MANY public-sector jobs pay at least as much as similar jobs with private companies. My sister, who just turned 50 this past summer, just retired from being a probation officer in California and will make at least 2/3 of her salary (as a pension) for the rest of her life (it might be 3/4 -- can't remember exactly, except that it's a lot, and it's adjusted for inflation!). She worked for the same public employer for 27 years. If she had gotten a similar job with a private company, e.g. being an officer in a privately-run prison, her pay would have been similar but her benefits would have been significantly worse (e.g., no pension -- just the 401(k) or similar options).
My mom also worked for the State of California for about 10 years before she retired; before that, she had worked something like 25 or 30 years for various private-sector jobs. Her social security for those 25-30 years of work is LESS THAN the monthly retirement she gets from her state job.
My point is that it seems that lower-level and mid-level public jobs have similar pay/benefits to private-sector jobs, plus WAY better pensions and benefits. (Again, at higher levels, this isn't true.)
I don't begrudge my sister or my mom (or anyone else in the same situation) anything, but I wonder sometimes if state treasuries can continue to fund benefits that are so out of proportion to what people in the private sector make.
What you say has validity. The reality is that the private sector has the benefit to value employees differently and to differentiate benefits without public out cry. Woe the state or school district that tried to give Principals one set of benefits and custodians another.
Fairness doesn't play into this. It's what each of you agreed to. And yes, you DID agree to it - if you were ignorant of your retirement it is no excuse.
You are old enough to know that there is very little in this world that is 'fair' so I suggest you make the best of the situation you are in and put comparisons aside.
Another way to look at this: Maybe Ed was simply lucky rather than more skillful or meritorious. But luck is never "fair," is it? almost by definition. Perhaps he was lucky, and you weren't. Oh, well, such is real life. No?
Ed spent all his money over the years. He knew he would have a pension and healthcare. Now I hear complaining from him that it's not enough. I, on the other hand can afford to retire because I am either very smart and invested wisely; or stupid and lucky .
I am hearing about social security being means tested. All things being equal IMO social security and public pensions are
both being funded by taxpayers. So shouldn't pensions be means tested, too?
This doesn't make sense. How would you means test a pension that provides most of your income? That would be like, because you qualify for a $2,000 pension we're cutting it to a $1,500 pension.
From the standpoint of SS, it is currently means tested in a way. He will get only 40% of his SS benefit because of the Windfall Elimination Provision (WEP). This is because he is had a job with a pension while not paying into SS.
there are so many favoriables its almost a silly comparison. its no different then the city worker who retires with a 40k pension and not a dime to his name and you have 1 million bucks saved and income wise your both pretty much on even keel.
in fact the guy with the pension may be better off as his is just about guaranteed and has cola adjustments too.
It's a fallacy that corporations discovered in the 80's that they "couldn't afford" generous pensions. The truth is that in the 80's most corporate pension plans were over-funded. What happened with all the corporate take-overs was that the raiders looted the pension plans, then set up 401K plans and sold off the dismembered corpses. It was the pension plans that fueled all the executive bonuses and excesses.
I think the bottom line here is that you can make comparisons to others until you are blue in the face but at the end of the day you have what you have and he has what he has. Unless you both had the exact same jobs at the exact same salaries with the exact same savings plans etc, why would you even be making comparisons in the first place?
... So now an employee of a private company should save his own money, build up savings in his 401k and then that combined with his SS should give him an OK retirement. BUT, if the private sector employee is dumb, then he didn't save and now he or she is stuck with just SS. Bad strategy. But that's how it works today....
I lost a significant portion of my 401K at least twice--with the tech crash and the most recent bust. Okay, a financial genius I am not. To the OP: it's not productive to look for "fairness" in life.
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