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Old 01-07-2017, 12:44 PM
 
911 posts, read 530,954 times
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Quote:
Originally Posted by TuborgP View Post
Remember California teachers don't kick into SS so their pensions tend to be on the higher side compared to other states. We are talking about a couple here so that 165k pension income comes out to about $82,500 per person. Since they retired years ago that is well before any recent reforms and may be a pension plan that no longer is available to newer workers and hasn't been for awhile. Comparing the pension plan of a 80 year old retiree with a new hire can be apples and bacon comparisons. I suspect you do know teachers in California making 83k each. So if they marry each other. Bada Bing $166k annual income.
Yes, they both worked for 30+ years so they were under the old rules. New hires are under new rules with less benefits along the road.

My point was more along the lines that we need to realize how the younger generations will NEVER have the same retirement opportunities as these previous generations. In my example let's say you have a young couple, both teachers, who would go on the same life path right now. First, unless mom and dad paid for it they probably have at least $75k in student loan debt (between the two of them). Then, if they wanted to own a home (like that of my aunt and uncle) they'd somehow have to save about $100k for a down payment and then qualify for a big loan. Add to that increased medical costs (even with "good" employer health insurance) and educational costs for kids and you can see how impossible this becomes. I believe there isn't much alarm for this topic since there those who are older view the future through their own financially-successful filters.
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Old 01-07-2017, 12:52 PM
 
911 posts, read 530,954 times
Reputation: 3717
Quote:
Originally Posted by reneeh63 View Post
Very low interest rates? That's a double-edged sword - it's bad if you're invested mostly in bonds (like OLDER people tend to be) - but if you're mostly in stocks/equities then....what? The markets have bounded back since 2008 with pretty good returns for all...unless you are heavy into bonds...like older people!

Low interest rates are great for people buying a house - instead of paying 10% on a loan you can pay 3%...that benefits younger people who are paying mostly interest in the early years and lets them pay down more principle if they have extra dollars.

Real estate goes up along with everything else due to inflation...salaries have lagged a bit...but you have to try living outside high COLA areas if you don't want to pay $750k for a 2 bedroom house.

Yes, the times have something to do with investment returns...however you do have to have something in the market to benefit - so even if it is $100 a month, put that out there.
Yes, this is all true. My point was to show that there isn't much alarm for this topic since many profited through high market gains and generous (now extinct) pension plans plus they benefited from low interest rates when their home equity skyrocketed. That perfect storm of success isn't seen anymore.
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Old 01-07-2017, 12:54 PM
 
13,914 posts, read 7,411,228 times
Reputation: 25408
Quote:
Originally Posted by TuborgP View Post
Not really true. Try for yourself

https://dqydj.com/income-percentile-by-age-calculator/

At age 70 that 40k income is only about the 47th percentile and it takes about 90k to hit the 80th percentile at age 70

This is total nonsense. It's only 70-year-olds who are working. It's not all 70 year olds.

From the calculator:
Quote:
A 70 year old worker making $40,000.00 annually was in income centile 47% in 2016. This centile ranged from $39,552.00 to $40,068.00 a year.
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Old 01-07-2017, 01:25 PM
 
Location: Tennessee
23,581 posts, read 17,574,904 times
Reputation: 27672
Quote:
Originally Posted by Coloradomom22 View Post
Yes, they both worked for 30+ years so they were under the old rules. New hires are under new rules with less benefits along the road.

My point was more along the lines that we need to realize how the younger generations will NEVER have the same retirement opportunities as these previous generations. In my example let's say you have a young couple, both teachers, who would go on the same life path right now. First, unless mom and dad paid for it they probably have at least $75k in student loan debt (between the two of them). Then, if they wanted to own a home (like that of my aunt and uncle) they'd somehow have to save about $100k for a down payment and then qualify for a big loan. Add to that increased medical costs (even with "good" employer health insurance) and educational costs for kids and you can see how impossible this becomes. I believe there isn't much alarm for this topic since there those who are older view the future through their own financially-successful filters.
Definitely the case. Even current new public sector hires, while generally having better benefits than private sector workers, do not have anywhere near legacy benefits.
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Old 01-07-2017, 02:20 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by Serious Conversation View Post
Definitely the case. Even current new public sector hires, while generally having better benefits than private sector workers, do not have anywhere near legacy benefits.
That is very true when folks compared the benefits of a retired public employee with a young private sector employee. The valid comparisons are retired public v retired private. Even over my time I have seen several pension plan changes for new hires.
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Old 01-07-2017, 02:46 PM
 
419 posts, read 257,205 times
Reputation: 1329
Every generation faces a different set of circumstances and challenges. The key is figuring out how best to maneuver your particular challenge and not to compare yourself to other generations. Although some current retirees have it made financially and seemingly had an easy time of it, you might not know what they went through. Because the standard of living for the younger generations is so high today, it is easy to assume that older people grew up the same way. Many did not have a nice home with a nice car and money to go out and eat good food. Many struggled to survive but figured out how to make it.

My grandfather was of the generation that started with little money and eating ketchup sandwiches. He learned construction and made the wise choice to give up some of his salary to go to a lower paying State road job with a pension. They were big savers because that is what they learned growing up. Their ability to save was a great advantage to them in the 1970's - 90's when interest rates at banks were over 10%, and that allowed them to accumulate a great deal of secure money on a smaller salary. They found the best way to maneuver around their particular set of circumstances.

My father, on the other hand, was a farmer. At a relatively young age, he purchased one farm then a second. He and my mother lived in an old farm house on the second farm throwing every dollar into the mortgages. We didn't have a bathroom in this house until I was six, were lucky enough to get hand-me-downs to wear, but made out. I wonder how many young people today would make that kind of sacrifice to gain financial freedom. My parents were savers who paid their own health insurance and were responsible for their retirement savings. They sacrificed but did very well without a pension. Again, they found the best way to maneuver around their particular set of circumstances.

Things are reversed now. In the olden days, people started off poor and learned to grow whatever money they could lay their hands on. There was nowhere to go but up. Today, people are coming from a richer environment and struggling to maintain what they consider normal. Do some need to reconsider what is normal? Are they willing to truly sacrifice for financial independence?

We have to readjust our thinking. Things have changed, and pensions are becoming a thing of the past in the private sector. Interest rates are historically low, which has punished many savers or pushed them into less secure investments, but has made it possible for young people to own homes.

My advice to the younger people is to make the sacrifices you need to in order to be become well off financially. You can sit around depressed because you won't have the same type of retirement as your parents or you can take it on yourself to make your own retirement. Get together $1,000 and open something like a Vanguard Target Retirement account with automatic investments every pay day. Watch your money grow and move it as necessary. Take charge of your future.
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Old 01-07-2017, 02:54 PM
 
Location: A safe distance from San Francisco
8,559 posts, read 6,148,322 times
Reputation: 8521
Quote:
Originally Posted by Coloradomom22 View Post
Yes, they both worked for 30+ years so they were under the old rules. New hires are under new rules with less benefits along the road.

My point was more along the lines that we need to realize how the younger generations will NEVER have the same retirement opportunities as these previous generations. In my example let's say you have a young couple, both teachers, who would go on the same life path right now. First, unless mom and dad paid for it they probably have at least $75k in student loan debt (between the two of them). Then, if they wanted to own a home (like that of my aunt and uncle) they'd somehow have to save about $100k for a down payment and then qualify for a big loan. Add to that increased medical costs (even with "good" employer health insurance) and educational costs for kids and you can see how impossible this becomes. I believe there isn't much alarm for this topic since there those who are older view the future through their own financially-successful filters.
Many do....perhaps even most, but not all of us. Believe me, I understand what has happened in and to this country over the last several decades and what you face. And I feel your pain. But please understand also that these profound changes have impacted lots of us boomers in much the same way. Ten years ago I expected to be fully retired by now. But retirement has been pushed way back into a who-knows-if-or-when status for me and lots of others.

The big difference, of course, is that you have your whole lives ahead of you and we weren't blindsided by these profound changes until much later in life.

The good news is that finally there are signs that we have the attention of political leaders who are listening to and addressing the plight of average Americans for the first time in decades.

Hang in there....we can turn this around with a collective perseverance.
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Old 01-07-2017, 03:19 PM
 
Location: Loudon, TN
5,783 posts, read 4,838,667 times
Reputation: 19458
Quote:
Originally Posted by TuborgP View Post
Remember California teachers don't kick into SS so their pensions tend to be on the higher side compared to other states. We are talking about a couple here so that 165k pension income comes out to about $82,500 per person. Since they retired years ago that is well before any recent reforms and may be a pension plan that no longer is available to newer workers and hasn't been for awhile. Comparing the pension plan of a 80 year old retiree with a new hire can be apples and bacon comparisons. I suspect you do know teachers in California making 83k each. So if they marry each other. Bada Bing $166k annual income.
Yeah....I'm talking about an 89 year old retiree. She retired from Sacramento Unified SD over 25 years ago! No "recent reforms" involved. I don't know ANY teachers in CA now. But ....

According to the Sacramento Bee, the average teacher salary in 2011 was $67,871. Districts with the highest average teacher salaries in California are located near Santa Barbara, San Francisco and Los Angeles.
( https://rossieronline.usc.edu/teachi...ary-california )

and....

Teacher salary is determined by a number of factors, including an areaís cost of living, district funding and the number of experienced teachers working in the district. An individual teacherís salary is generally based on college units completed and years of teaching experience. Across the state, starting teacher salaries are considerably lower than district average salaries. According to*EdSource, starting teachers earn $45,637 in Los Angeles and $38,347 in San Diego.

So your couple of teachers who retired years ago are making more on a pension than most CA teachers make today WHILE WORKING. So I'm wondering how that can be.
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Old 01-07-2017, 03:36 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by TheShadow View Post
Yeah....I'm talking about an 89 year old retiree. She retired from Sacramento Unified SD over 25 years ago! No "recent reforms" involved. I don't know ANY teachers in CA now. But ....

According to the Sacramento Bee, the average teacher salary in 2011 was $67,871. Districts with the highest average teacher salaries in California are located near Santa Barbara, San Francisco and Los Angeles.
( https://rossieronline.usc.edu/teachi...ary-california )

and....

Teacher salary is determined by a number of factors, including an areaís cost of living, district funding and the number of experienced teachers working in the district. An individual teacherís salary is generally based on college units completed and years of teaching experience. Across the state, starting teacher salaries are considerably lower than district average salaries. According to*EdSource, starting teachers earn $45,637 in Los Angeles and $38,347 in San Diego.

So your couple of teachers who retired years ago are making more on a pension than most CA teachers make today WHILE WORKING. So I'm wondering how that can be.
Because they have a different retirement plan with a life time of fixed benefits built in like COLA. So during the Carter years of double digit inflation they got a double digit COLA if already retired and their plan didn't have a COLA cap. That COLA if like ours is built from that point on. Current employees got what ever COLA their district gave them. Also as you said you are comparing the pension for what might be employees from one of the highest paying districts with a state wide average. You would need to compare it to that of a working teacher in their district.

Also average is based on the entire experience/pay range so obviously a pension based on the highest three years is going to be higher than those early on the pay scale.
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Old 01-07-2017, 03:52 PM
 
Location: Central IL
15,238 posts, read 8,532,850 times
Reputation: 35672
Quote:
Originally Posted by StillRoaming View Post
Every generation faces a different set of circumstances and challenges. The key is figuring out how best to maneuver your particular challenge and not to compare yourself to other generations. Although some current retirees have it made financially and seemingly had an easy time of it, you might not know what they went through. Because the standard of living for the younger generations is so high today, it is easy to assume that older people grew up the same way. Many did not have a nice home with a nice car and money to go out and eat good food. Many struggled to survive but figured out how to make it.

My grandfather was of the generation that started with little money and eating ketchup sandwiches. He learned construction and made the wise choice to give up some of his salary to go to a lower paying State road job with a pension. They were big savers because that is what they learned growing up. Their ability to save was a great advantage to them in the 1970's - 90's when interest rates at banks were over 10%, and that allowed them to accumulate a great deal of secure money on a smaller salary. They found the best way to maneuver around their particular set of circumstances.
I Like this story...my father went to dental college because he'd had polio as a child and couldn't work on the family farm but still wanted to work with his hands. He frequently ran out of money and had to pawn and buy back his watch to buy his books. He said he ate goose liver sandwiches most every day because that was the absolute cheapest thing to eat then. I mean, he became a professional with his own practice but he went through a lot to get there. And because he really had no insights into investing and obviously worked for himself had a tough time with investing for retirement - no 401k's, mutual funds, or index funds back then. And he went through the tough recessions of the 70's and early 80's...and had major medical issues himself as did my sister. Of course he paid for all his own insurance and it was expensive with his pre-existing conditions.

So he came through at a bad time economically and probably could have done much better 20 years later. But really, what can you do? I don't mind so much that others have done well for themselves - I do wish they would acknowledge that it wasn't quite 100% on their own and that they DID benefit from outside sources such as the economy or an inheritance, or whatever. And I really don't like them crowing about having a couple mill and if times were bad they'd "just start another business" blah blah. Yeah...right. So I do get that...in the end we all have to play the hand we were dealt - and hope others have a grain of decency and understanding.
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