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Old 08-03-2017, 10:51 AM
Location: San Diego
35,178 posts, read 32,145,638 times
Reputation: 19724


I wouldn't call it free. I accepted a lower salary in exchange for the benefits. I would have gladly taken the cash instead because then, I'd be in control.

Now I have to pray they never get bought out.
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Old 08-03-2017, 12:00 PM
Location: Hudson Valley, NY
895 posts, read 765,504 times
Reputation: 1761
I took a job with my current company way back when specifically for the pension plan and the matched 401k they offered. My company eliminated the pension a few years back but I was grandfathered in and they did increase the match on the 401k (it's about 8%). So the frozen pension won't be what it could have been, however it's significantly better than what many others have so no complaints. I intend to take the lump sum and use it to finance the 8 years to delay SS from 62 to 70.

As others have said there is - or was, a cost to the pension and even the 401k match. I used to ride the LIRR and chat with a few other regular commuters that were in very similar IT and network fields and they all made more than I did in salary. The difference was I had the retirement package that they did not. Their major companies all had unmatched 401k's and that was it.

Last edited by Q44; 08-03-2017 at 12:08 PM..
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Old 08-03-2017, 12:20 PM
Location: Venus
4,760 posts, read 3,191,137 times
Reputation: 7937
I was medically retired from the Air Force with a pension. Nope, didn't pay anything into it. Medical bennies through the V.A. As for Social Security, I didn't work long enough to really get anything when I turn 65. You have to work at least 10 years and I worked short of 8. I can receive it off of my husband's SS.

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Old 08-03-2017, 12:26 PM
Location: The sleepy part of New York City
1,947 posts, read 1,205,192 times
Reputation: 4322
It wasn't free. Hubby worked for the city so he paid into his pension plan and SS.. His pension deduction started at 3% of his salary and went up to 5% but he only had to pay into it for 10 yrs. Now that he's retired we both get full free medical, hospital, dental with a $2,000 per year cap, free eyeglasses, and free prescriptions without a co pay if we use their approved doctors and they're good so no complaints there. . Prescriptions are filled at any drugstore though. Even though his city job covers all the above, his union covers some of them too so we kind of have double coverage on some things.. like eyeglasses but there's a small co pay.. but at the rate he loses his eyeglasses it's a small price to pay.
God forbid something happens to him though because wives don't get medical in the event of the loss of the spouse. I'll still get part of his pension though and SS.

His pension is a decent amount and the city has some decent savings plans for the future that we've invested in. His pension along with SS hasn't affected the life we led before retirement. We would like to sell and get rid of the mortgage though eventually.
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Old 08-03-2017, 12:45 PM
45 posts, read 36,614 times
Reputation: 108
Two pensions

First one is Military Retirement pension. Although I did not contribute monetarily, the low pay and 17 of a 21 year Naval career spent at sea was my contribution.

Second pension will be with the Florida Retirement System (FRS) after I retire soon from 20 years in public education. It requires 30 years -or- age 62. Initially did not require any buy-in, however since 2008 it requires a 3% contribution.

I am very grateful for both.
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Old 08-03-2017, 12:49 PM
Location: Atlanta
3,203 posts, read 3,197,255 times
Reputation: 2031
Originally Posted by jim9251 View Post
My POS rental? No.

I am sorry

I don't know what else to say...at least you have $5 left over? And at least you have 'some' sort of a pension...?

Some people are negative every month and getting deeper into the hole as each week passes.

I know this doesn't help...just trying to find a silver lining.
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Old 08-03-2017, 12:50 PM
Location: Upstate, NY
607 posts, read 260,726 times
Reputation: 753
My wife and I paid 3% for ten years. There is a 403b that has no match. We have to work either 30 years (eligible to retire at 55) or 20 years and be age 65 for what they call "no pension factor penalty." I will have 25 years when I reach 62 and will receive 2% for each year of service, at final average salary (highest three consecutive earning years)- I.e., 50%. New employees have to pay in their entire career, pay more, and will get less.

We do not have any extra benefits other than insurance equal to active employees. Folks who get free insurance are incredibly fortunate.

On my street I am by far the lowest paid person with six years of college. But I'm not complaining because my pension should total around a million bucks by the time I die. I feel fortunate. My wife's pension will be even better. In my experience most folks don't have the self discipline to save that much.

Last edited by dcfas; 08-03-2017 at 12:55 PM.. Reason: Clarity
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Old 08-03-2017, 12:56 PM
2,036 posts, read 860,697 times
Reputation: 5032
I purposely stayed at my job because of the pension. They also offered a matched fund (up to 3% of gross salary) 401K plan that I took advantage of. About 10 years before I retired, the company stopped offering pensions to new employees. Although the pension was "free" I accepted lower wages in return. Several people left the company for higher paying jobs on Wall St. I don't know if they fared better or worse. I have been retired about 10 years and financially I am on easy street, but I am not extravagant. We don't go on vacations or eat out regularly at restaurants.
I always had to pay for my medical/dental/prescription insurance when I was working, retired and now on Medicare. The company did subsidize it on my employee and my retiree plans. But annual premiums for myself and my wife have been just about the same (about $6K per year), for the employee plan, the pre-Medicare retirement plan, and the Medicare supplementary plan plus Medicare.
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Old 08-03-2017, 01:08 PM
130 posts, read 88,460 times
Reputation: 282
II currently pay around 13% of gross pay into my pension and my employer pays about the same. The benefits are 2% of salary per year of service reduced by 2% per year that you retire under the age of 62. It used to be a reduction of 2% per year under 90 years of combined age and years of service, but that changed recently. Indexed to cost of living.

Example: work 30 years and retire at 58. 30*0.02 = 60% of salary but reduce by 4*0.02 = 8% results in 60% * 0.92 = 55.2% of gross salary paid in pension per year. The fund is self sustaining and adjustments are made as needed to keep it functioning properly. I'll probably retire fairly young as we have a fair number of other investments that should help us and my wife will get a small pension as well.
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Old 08-03-2017, 01:18 PM
Location: Albuquerque NM
1,658 posts, read 1,522,722 times
Reputation: 3632
My retirement contribution as a long time federal employee is less than 1% (0.08%) but the multiplier is only 1% per year of service times high three salary. For new employees the contribution rate has been significantly increased. Many public sector pensions have multipliers of 1.5-2.5%. I would definitely have been willing to contribute a higher percentage for a larger multiplier.

Also they don't call federal government retirement benefits the "golden handcuffs" for nothing. To collect a full pension at age 56 requires 30 years of service or age 60 with 20 years service. You are also eligible to retire at age 56 with at least 10 years of service but there is a large penalty on your pension unless you wait to age 62 to collect (but inflation can take its toll). Basically the OP would not have been able to collect any pension at my workplace given her 6 years of service.

We get "full health insurance" in retirement but pay about 30% of the premium. Dental and vision cost extra and are not subsidized. It is a great deal for those who retire before age 65. At 65, the insurance becomes secondary to Medicare and costs about the same as Medicare Part B and Part F. However you have to meet the age and time requirements above to qualify for medical in retirement. Again the OP would not have met those requirements.

I'm simplifying all of this as the rules are more complicated. But my point is that while public sector pensions can be a wonderful benefit, they may require many years of service and may not be favorable for those who want to terminate employment in their 50's with few years of service.
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