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Old 10-29-2016, 05:28 AM
 
29,764 posts, read 34,848,700 times
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Quote:
Originally Posted by mathjak107 View Post
counting on the cpi inflation to match your own cost of living index will not work out well at all . that is why cola adjusted ss ,annuity's or anything else may not agree with your own life and you will always need additional sources of income to adjust with .

Hmmmm let me guess you are a frequent user of FireCalc and other planners. A simple drill anyone can do is to take their beginning income and start increasing it at 2 percent per year for 15 years doing it one year at a time. Then do it for five percent for 15 years one year at a time. When done subtract the smaller amount from the larger. That difference is inflation erosion. What is comfortable at first can be no Panacea as I noted. Try no COLA and ouch in only 10 years. Compounding can be your friend or enemy

The interesting thing is that we have both been studying/reading over the decades and remember the horror stories from periods of high inflation and fixed income and were told to prepare
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Old 10-29-2016, 10:27 AM
 
26,589 posts, read 52,247,863 times
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My city's retirement plan covered it all and has been closed to new employees for some time.

An example is a police officers pension is forever tied to what the rank held pays today... there was even a lawsuit to factor in overtime because all police in my city have at least some overtime.

There are current retired officers that are making nearly 3x in retirement than the most they ever earned working... plus lifetime medical and generous surviving spousal benefits.

Last I checked there were still a handful of workers grandfathered under the old plan...

Amazing except for the taxpayers point of view.

Plenty of Public safety with pension totals in the 150k... often a Police of Fire would retire out and then go to a nearby department and get a second pension... some also had military... not all the agencies were under the same pension system making this possible.

Now if you have a spouse with a plan... the high numbers really make sense... I personally know retired husband and wife couples in their 50's with over 200k income in the SF Bay Area plus lifetime medical...

Since this about Teachers... Dad's Retired University Professor friends from the UC system are doing very well... plus they have opportunities to sit on Board of Directors for Start Up, some still have Housing Allowances and a Professor Couple with over 200k retirements is not uncommon.
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Old 10-29-2016, 11:18 AM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
Quote:
Originally Posted by Ultrarunner View Post
My city's retirement plan covered it all and has been closed to new employees for some time.

An example is a police officers pension is forever tied to what the rank held pays today... there was even a lawsuit to factor in overtime because all police in my city have at least some overtime.

There are current retired officers that are making nearly 3x in retirement than the most they ever earned working... plus lifetime medical and generous surviving spousal benefits.

Last I checked there were still a handful of workers grandfathered under the old plan...

Amazing except for the taxpayers point of view.

Plenty of Public safety with pension totals in the 150k... often a Police of Fire would retire out and then go to a nearby department and get a second pension... some also had military... not all the agencies were under the same pension system making this possible.

Now if you have a spouse with a plan... the high numbers really make sense... I personally know retired husband and wife couples in their 50's with over 200k income in the SF Bay Area plus lifetime medical...

Since this about Teachers... Dad's Retired University Professor friends from the UC system are doing very well... plus they have opportunities to sit on Board of Directors for Start Up, some still have Housing Allowances and a Professor Couple with over 200k retirements is not uncommon.
Not about teacher only. That was a thread/article title the intent is 401k v 403b plans. As usual it has morphed .
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Old 10-29-2016, 11:28 AM
 
71,463 posts, read 71,629,249 times
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Quote:
Originally Posted by TuborgP View Post
Hmmmm let me guess you are a frequent user of FireCalc and other planners. A simple drill anyone can do is to take their beginning income and start increasing it at 2 percent per year for 15 years doing it one year at a time. Then do it for five percent for 15 years one year at a time. When done subtract the smaller amount from the larger. That difference is inflation erosion. What is comfortable at first can be no Panacea as I noted. Try no COLA and ouch in only 10 years. Compounding can be your friend or enemy

The interesting thing is that we have both been studying/reading over the decades and remember the horror stories from periods of high inflation and fixed income and were told to prepare
the reality is different things see different inflation at different times . firecalc uses a set inflation rate .

fidelity uses a variable one based on a few indicators , however they treat healthcare and long term care costs differently .

healthcare in fidelity was inflated by 7.50 % and long term care by 5.50% . healthcare costs started trending down so fidelity adjusted them to 5.50% too .

everything else sees about 2% right now .

we all see different personal inflation rates and cola's will never match them .
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Old 10-29-2016, 11:29 AM
 
Location: Living rent free in your head
30,988 posts, read 13,558,751 times
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Quote:
Originally Posted by Ultrarunner View Post
An example is a police officers pension is forever tied to what the rank held pays today... there was even a lawsuit to factor in overtime because all police in my city have at least some overtime.
I'm not aware of the lawsuit, but the Pension Reform act did not eliminate acting pay and overtime from the list of pensionable income items. http://reason.org/files/pepra_pension_reform.pdf
Quote:
Originally Posted by Ultrarunner View Post
Last I checked there were still a handful of workers grandfathered under the old plan...
Actually most public employees are still under the old system, only those hired after 2013 are subject to PEPRA.
Quote:
Originally Posted by Ultrarunner View Post
There are current retired officers that are making nearly 3x in retirement than the most they ever earned working... plus lifetime medical and generous surviving spousal benefits.
If that happens it certainly isn't common. A public safety employee earning $100,000 in base salary would have to earn over $200,000 a year in overtime to even get close, if they earned that, then their pension would be $270,000. For those hired after 2013, employees contributing to Social Security are subject to a $113,700 pensionable compensation cap. For public safety who don't participate in Social Security, there is a $136,440 pensionable compensation cap.
Quote:
Originally Posted by Ultrarunner View Post
Since this about Teachers... Dad's Retired University Professor friends from the UC system are doing very well... plus they have opportunities to sit on Board of Directors for Start Up, some still have Housing Allowances and a Professor Couple with over 200k retirements is not uncommon.
But how many tenured professors are there any more? Seems to me like they have been largely replaced by non-union adjunct professors.

Don't get me wrong, California public safety pensions got completely out of control, changing the formula to 3% @50 and then making it retroactive AND then giving it to 33,000 prison guards was just bat shi$ crazy!
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Old 10-29-2016, 11:50 AM
 
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^^^^^^^ California has two bullet trains on a collision course, one called pensions and the other Covered California. It might just take one good recession or the repeal/collapse of the Affordable Care Act and they could collide and blow up the budget!
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Old 10-29-2016, 11:51 AM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
Quote:
Originally Posted by mathjak107 View Post
the reality is different things see different inflation at different times . firecalc uses a set inflation rate .

fidelity uses a variable one based on a few indicators , however they treat healthcare and long term care costs differently .

healthcare in fidelity was inflated by 7.50 % and long term care by 5.50% . healthcare costs started trending down so fidelity adjusted them to 5.50% too .

everything else sees about 2% right now .

we all see different personal inflation rates and cola's will never match them .
Similar or different they still see inflation and I am not sure everyone does.
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Old 10-29-2016, 12:22 PM
 
26,589 posts, read 52,247,863 times
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The generous Pension System was closed to NEW hires in 1976... it is a cost that continues to drag down the city... with special property tax assessments to prop up the system and it covers over 1000 employees.

Average total compensation for an employee is $162,000. In 2012, 179 Oakland police officers took home over $200,000 in total compensation

Oakland pushes cuts to pension payments - SFGate

The real gist is more and more taxpayers have nothing similar with most I know... including myself having zero employer contribution to the 401K or 403B plans.

Just food for thought... especially since 44% of my city's budget is consumed by one department.

A very good friend is City Manager of a Bay Area city and has said many times it is not the salaries causing sleepless nights... it is the unfunded liabilities that will consume the entire city budget and this is why 401K and 403B will continue to replace pensions.

We have Police Captains that retired 35 years ago with 110k annual pensions... that is not a misprint... retired 35 years ago and this does not count lifetime medical.

Some have said it is nothing more than pension envy... it is a little more than that when the homeowners average $500 in added taxes just to prop up a pension that closed in 1976 or five separate special assessments to prop up teachers...

Last edited by Ultrarunner; 10-29-2016 at 12:44 PM..
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Old 10-29-2016, 12:37 PM
 
Location: Living rent free in your head
30,988 posts, read 13,558,751 times
Reputation: 22077
Quote:
Originally Posted by TuborgP View Post
^^^^^^^ California has two bullet trains on a collision course, one called pensions and the other Covered California. It might just take one good recession or the repeal/collapse of the Affordable Care Act and they could collide and blow up the budget!
About half the states have pensions funded at the same percent or higher than California, the rest are underfunded by a larger amount, and there are 17 states with a higher pension liability than California per person, so if pensions are going to cause a catastrophe collapse of the economy it certainly won't be unique to California.

Repealing the ACA would be more devastating to states that never factored the cost of expanded medicaid into their budgets than it would for California which has had expanded medicaid for years. Those states would either have to terminate benefits for those recipients or find a way to pay for it
Which is why repealing the ACA is just talk, the house will probably vote on repealing it another 30 or 40 times, but the Senate will never let it happen, they know how disastrous the outcome would be.
State pension funds are awash in red ink: Here's your share
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Old 10-29-2016, 12:52 PM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
^^^^^^^ it is not the pension alone that presents the greatest threat is that in combination with Covered California and skyrocketing cost because of expansion. Neither the President or Congress needs to do anything for the ACA to fold. In fact doing nothing might bring it down sooner. It isn't just premium increases but the number of insurers pulling out with many counties being down to one next year.
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