Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A lot of people do not realize the changes they want for government pensions and health care have already taken place. There are just people who qualified under the old rules still in the system.
In NJ I believe anyone hired after 1986 no longer qualified for free medical.
403b plans are generally garbage. There is no match and much of the time they have high fees.
Young couple with 2 kids and a house making regular salaries in very secure jobs with pensions. I don't see a need for them to be saving in a 401k.
The value of the 403b is the tax advantage. Once my daughter was grown and the house paid off, I needed the 403b to reduce my taxable income. But, yes, the options within the 403b's are often not the best.
403b plans are generally garbage. There is no match and much of the time they have high fees.
Young couple with 2 kids and a house making regular salaries in very secure jobs with pensions. I don't see a need for them to be saving in a 401k.
Having been in that situation and still having us each contribute to a 403B, I see great value in those contributions. We are now getting close to 70, retired just about a full ten years. Yes we have good pensions and SS with a great combined monthly income. However that large nest egg is the security blanket that brings it all together. Medical emergency, large purchase and perhaps most importantly the ability to buy in to a nice CCRC down the road. It is important for those with pensions to have not just a good size 403b/401k portfolio but also a relatively large after tax portfolio so sizable chunks of money can be accessed with out triggering significant tax events as taking from a workplace plan would do.
Not all can do that for sure but if a couple can and doesn't they may at a later age wish they had. I know folks who do.
All of my family and friends that work in the private sector have better retirement benefits. When IBM ended their pension the 401K plan and match was fantastic. The person I knw their was contributing 6% of his pay and they gave him a 10% match. I have other examples where the benefits are way better than my pension.
Mine aren't even close to what government workers get.
I’m a federal pensioner. Aside from the defined pension, I contributed the max (up to $22k/year) to the TSP (fed 401k) and the govt matched 5%. Now I’m drawing from both and doing very nicely. At 66, I’ll collect social security and then my wife and I will be doing some serious travel.
Does not pay out and pays out less are two very different things. If a person is building a 3-legged stool, 20 percent of the salary you earned for 10 years, guaranteed for life, would be a valuable component to supplement other retirement income. Plenty of people hang on just to get the 10 year vesting in before moving to jobs in the private sector where they can earn more money and, presumably, work on building a 401K account.
In my system, you have to be 60 or have 30 years to retire. I will retire at 61 having 20 years in, for a 40% pension, plus medical at the employee rate until I reach Medicare age. I would not be retiring at 61 if the pension was all I had and I would not be retiring at 61 if I didn't have a pension.
BTW, new employees are on a sliding scale for how much subsidy they get for medical insurance, based on years worked. That was implemented about 5 years ago and has made the medical benefit much less valuable. Previously, you only had to be vested and retire as an active employee to get a 75% subsidy.
I think that's what I said. Pretty much our whole posts, especially your last paragraph and my last paragraph are saying the exact same thing.
I completely agree that a pension of any size should be a part of a comprehensive retirement plan that could include SS, investments in tax advantaged or regular accounts, rental properties, annuities, insurance products, etc. Our pensions form the base of our plan, but other income streams are structured to start and stop at various points to provide a stable income with a gradually increasing amount to account for inflation, planned lifestyle changes, and the inevitable surprises, of both the good and bad variety.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
