City-Data Forum What advice would you offer 38-year-old me? (husband, benefits, trouble)
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01-08-2018, 08:43 AM
 Location: Atlanta 3,203 posts, read 3,196,256 times Reputation: 2031

I'm back to post information about my current company's pension plan in case anyone was interested.

The benefit goes as follows:

1.1% of your final (monthly) average pay* times the number of years you've worked at the company

As an example:
If your average salary was 75,000 then your average monthly pay would be 6250
Multiply the 6250 average monthly pay times .011 (1.1%) and you get 68.75
If you worked there 5 years, your monthly pension amount would be 68.75x5=343.75
If you worked there 10 years, your monthly pension amount would be 68.75x10=687.50
...and so on

*average pay refers to the average of your last 3 years of employment at the company

I'll be 39 next month and have 4 years in. Vest at 5 years. Ran some numbers on our internal pension plan calculator. Just to give a few random examples:

Example 1:
Retiring from employer at age 50/starting collection of benefits at age 62:
Benefit amount: \$1,036/month

Example 2:
Retiring from employer at age 55/starting collection of benefits at age 65:
Benefit amount: \$1,786/month

Example 3:
Retiring from employer at age 48/starting collection of benefits at age 58:
Benefit amount: \$642/month

For a private pension, on a scale of 1-10, how would you 'rate' this pension? Where 1=horrible and 10=excellent

I posted this because I believe a few posters have mentioned to consider leaving and working a civil service job for a better pension. I currently pull in the high 90s and have no clue what type of CS job I'd get considering the industry I work in now. But I am interested in hearing people's additional opinions about doing this. If I were say, an attorney working for a private firm, I'd definitely consider leaving and working as a staff attorney down at the country courthouse. I see plenty of positions for RNs on USAjobs.gov for roles that would offer pensions but I'm not a nurse. Am just curious about people's rationale for doing what would be a fairly drastic career change and I'm assuming big drop in salary in exchange for a pension. I'm not closed to this idea but because I've never considered, it would be helpful to hear more about this (especially if you are someone who has done this). And especially considering I do currently have a chance at an (albeit small) pension with my current employer.

01-08-2018, 08:53 AM
 Location: Atlanta 3,203 posts, read 3,196,256 times Reputation: 2031
Quote:

Lifestyle creep is definitely a real thing. For instance, I see these used BMWs priced at \$6000-\$8000 I could pay cash for that I realllllly really want right now! However, since I have a budget, the only "fun" thing I allow myself to continue to spend on right now is travel. So I remain car-less because of that and because I have a line item in my budget to help pay for my mom's bills as well.

On top of all of that, 5 years ago when my salary was lower, I would have never thought of buying a used BMW. I said my next car would be an Accord because the repair costs are much much lower. Now that I make more, I do experience a stronger desire to purchase more expensive alternatives to things. I have been good so far at avoiding such bad decisions (for example, currently I'm remaining car-less until the emergency fund is done and I have enough saved to buy my next car cash).

I am grateful to have learned this is the best way to handle my financial life, however, sometimes it just kinda sucks when you know you "could" buy something in particular but probably never will because you need to prioritize being responsible.

01-08-2018, 09:13 AM
 Location: Tennessee 23,572 posts, read 17,544,804 times Reputation: 27627
The thing about not having the car is that it limits options for things that may save you money too. It's also going to limit your employment options because you are dependent on working where you can get to.

I drive an older Ford Escape. I do most of my grocery shopping, and a lot of other shopping, at Sam's Club or Costco in bulk. Depending on what you buy, this can save a lot of money over buying items in small amounts.

If you need to leave the area, a car is going to be required in most areas. I don't know how much it would cost to park it where you are, but I cannot imagine being confined to areas that are serviced by public transit or having to rent a car every time I want to leave town.

01-08-2018, 09:38 AM
 Location: Atlanta 3,203 posts, read 3,196,256 times Reputation: 2031
Quote:
 Originally Posted by Serious Conversation The thing about not having the car is that it limits options for things that may save you money too. It's also going to limit your employment options because you are dependent on working where you can get to. I drive an older Ford Escape. I do most of my grocery shopping, and a lot of other shopping, at Sam's Club or Costco in bulk. Depending on what you buy, this can save a lot of money over buying items in small amounts. If you need to leave the area, a car is going to be required in most areas. I don't know how much it would cost to park it where you are, but I cannot imagine being confined to areas that are serviced by public transit or having to rent a car every time I want to leave town.
Up until last spring I'd been living in Chicago for the past 5 years. I had a car there and after 2 months of not driving it a single time I sold it. There's no need for a car in some cities and Chicago is one of them.

Now, Atlanta is a different story. However, I currently work from home. I was going to buy a car immediately after returning to Atlanta but decided to wait and see how things played out. I picked my current apartment based on location because it is:

-In the center of the city, so when friends want to meet up it is usually somewhere very close to me
-5-10 minutes drive to the highway
-15 minute walk to the most popular mall in the city
-5 minute walk to 2 major grocery chains
-5 minute walk to bus stops
-10 minute walk to the train
-Anywhere from a 5-20 minute Lyft or Uber ride to 90%+ of the places I frequent or would end up going in the city

Currently I'm spending just above \$200 a month all in on ridesharing expenses (Lyft). So right now it fits my lifestyle, however, I just continue to save to the emergency fund as one day I know this will no longer be reasonable. I did spend a bit going home to South Carolina over Thanksgiving and Mothers' Day last year, however, the costs are still less than owning. I travel a moderate amount, but the road trips are minimal (more flying than needing to rent a car).

Basically, I could actually buy a car right now but that would take a big chunk out of my savings account. So I will just continue to add to it until the cost of going without a car becomes higher than the cost of owning one.

01-08-2018, 03:21 PM
 Location: the Old Dominion 294 posts, read 149,075 times Reputation: 1382
Quote:
I would add get to know yourself. 'sounds simple, but a lot of people miss this one. And I am talking smart people. Get this one and the right decisions will fall into place. Find out what you like.
Laugh with me on this but it took me over forty years to realize I love chocolate cake.

Last edited by JohnnyLackland; 01-08-2018 at 03:21 PM.. Reason: ...kind of slow...

01-10-2018, 02:21 PM
 Location: Eastern Washington 14,221 posts, read 44,887,015 times Reputation: 12798
Quote:

It's a rather small pension, but, you started this job relatively late in life, so, I guess it's an OK deal.

I would give it a "5" as being middle of the road. One percent and change of your "average" salary near the time you require, multiplied by the # of years you worked, is what I have generally seen as a pension, in private employers who offer one (few do, anymore).

01-10-2018, 02:47 PM
 Location: Las Vegas 13,886 posts, read 25,311,688 times Reputation: 26362
All the advice about saving money is great. Just don't get so cheap you forget to live the life you have right now.

I could have more money if I had done nothing but save. However I believe the key is to find a balance that works for you. I have no regrets about traveling and seeing the world while I was young and in great health. I would do it exactly that way again. Planning is great but then life happens and today I would feel badly if my H had never seen the world and died young. At least he got to do some of the things he wanted to do.

Be realistic about how you want and expect to live in retirement. Do you plan to live quietly or live large? Large takes a lot more money. Where do you want to live? If it's NYC you probably can't save that much in your lifetime. And if you live long enough, you will have limitations. Eventually one of you will die and the other one will have to get along alone.

Do your wills and end of life stuff now. My H kept putting it off and after he died, I lost a lot of what I saved to people I barely knew. Protect yourself and your SO.

01-10-2018, 03:25 PM
 Location: PNW 2,474 posts, read 904,009 times Reputation: 8312
Look forward to the future as an opportunity for play and relaxation; however, ALSO play while you are young, because none of us knows what will happen down the road. I hate to hear of people delaying travel and play plans for retirement and I've actually known a few that got hit with unfortunate events that prevented them from doing so.

The older you get the more important it becomes to cultivate interests that you can carry through retirement. You do not sound like a workaholic which is GOOD! I think the live to work ethic is sad.

Use common sense with debt and do not live beyond your means. This gets harder to do with time because the over-all cost of living in the US is so criminally out of balance. But if you can barely make a car payment then you have no business buying a boat. If you squeeze your budget to pay the bills then you have no business owning an expensive fancy smart phone. Save \$ for a desired vacation first beforehand (this is what I do, as I hate to pay for vacations after it's done and over). Buy some food staples in bulk.

Your 401K is great but try to set aside a little money separate as a tangible account (meaning, that you can use as needed). Save a coffee can for loose change and empty your change into it every day along with some loose bills (I like to throw in \$5 bills when I can). With coins and bills it can add up faster than you think.

I know there's nothing original in this and you've been given a lot of helpful suggestions. It works in your favor that you are conscious of your future; most young adults don't like to think about it.

01-10-2018, 05:03 PM
 Location: The Outer Limits 1,461 posts, read 1,812,751 times Reputation: 2391
At your age, do it while you can, whatever that may be....age creeps up very fast, and before you know it, you’ll say, if only.

01-11-2018, 11:26 AM
 Location: Atlanta 3,203 posts, read 3,196,256 times Reputation: 2031
Quote:
 Originally Posted by M3 Mitch It's a rather small pension, but, you started this job relatively late in life, so, I guess it's an OK deal. I would give it a "5" as being middle of the road. One percent and change of your "average" salary near the time you require, multiplied by the # of years you worked, is what I have generally seen as a pension, in private employers who offer one (few do, anymore).
Thanks for commenting on my post that laid out my pension benefit details/estimates.

I was kinda thinking the same thing...that it's rather low.

However, if I can max out or get close to maxing out my 401k for the next decade (hopefully longer), get half of my SS estimated payout benefit and pay off an inexpensive place to live in by retirement age, then those things along with the small pension would hopefully make for a decent life in retirement....

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