Got a pension? What is it in comparison to your last paycheck? (smart, teach)
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Tell us the pension plan because if you are contributing 15% and the employer 5 times as much I want to verify that formula.
I can try to find it but one of the California pensions did a study a few years ago and about 67% of pension payouts were from employee contributions and ROI from all contributions. Direct government contributions were about 1/3. The study stated this was typical. However in states where there was no employee contribution that is obviously different.
In CA teacher pensions can go as high as 85% of the average of the last 3 years you taught. I know teachers who retire with $90k a year pensions for life. You can look at list at transparentcalifornia.com .
Are you having a problem with the percentage or dollar amount?
At the same percentage a pension in a higher cost of living area and resulting salary will yield a higher pension.
Is the person also receiving a shared tax paid SS benefit or is this without being eligible for SS? Did they work 40 years in the job?
What percentage of final income do you think a teacher who works 40 years or more will get in their pension?
What percentage of final income do you think a person who waits until age 70 to collect their SS will get?
What percentage of final income do you think a person who waits until works 40 or more years will get when combined with waiting until 70 to collect SS will get?
How hard is it if you start teaching at 23 and stay in that district to put in 40 years?
How hard is it to retire in your early 60's after 40 years and combine that pension with your 403B to be able to defer SS to age 70?
How much do you think a teacher working in a area with a six figure family income and houses in excess of 500k etc is going to make. Along with a well educated population that values education and wants the best for their kids and understands the relationship between housing value and school system reputation?
We get in trouble when we try to project our world on the world of others. In many communities well educated parents making six figure salaries want teachers as highly competent in their field as the parent is in theirs. They know what the salaries are and don't object to paying them. The additional cost in property taxes are more than off set by the rising home value and they are savvy enough to realize that.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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pension = 25% of gross paycheck. 23 years with co. RIFd @64yo, 2010. Rustbelt company.
Thankyou
Pressure to retire from management was huge. Management made work conditions and morale bad.
stock also tanked. I sold deferred stock for other investments that is now 3x of rollover amount.
File under "Yet another straw (or bale of hay) of the tax burden/deficit being piled on the back of the working public".
That's ridiculous.
Back in the day when pensions were the norm, that common plan was to replace a person's earned income when he/she retires. That was done by planning for benefits of 2/3 of "final salary" when a person works 30 years and assumed the balance would be provided by Social Security.
So no, 60% after 30 years is not ridiculous. It was done here and continues to be done in other countries. The "working public" should all be covered by such a plan. We were at one time.
There is one seriously big advantage to having a pension in addition to your investments. If you are 70 with your income based on SS and investments your investment style will probably be very conservative. If you are 70 with a pension providing a large portion of your income you can afford to be more aggressive with your investment style. That over the last five years has been a very big advantage for us as we are able to stay about 70/30 with equities as the major part of our portfolio. Every day as we hit new market highs I smile and am thankful.
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