Too many have a poor understanding of pension amounts (financial advisor, divorced, spouses)
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My wife will retire from her job with the County on November 1st. It was a tough decision for us, but we made the decision that she would retire after twenty-five years and we would buy out the remaining five years of her service for a full thirty year pension. One major factor in her case has been that she has suffered from insulin dependent diabetes for approximately 55 years. Her health is remarkably good, but she has had some subtle changes in her vision. That coupled with a bad supervisor at work made the decision for us. Her pension will amount to about $45,000 a year. In addition to that, we can derive a pretty healthy income from money in her 401K and mutual funds. I imagine we'll have just about what she had working.
I'll continue practicing law with my plan being to retire in about eleven years when I hopefully will reach age 70.
I would attribute our current good financial situation to a combination of planning, saving, and good luck. My wife happened to select the government agency in the state which may be the most generous in terms of employee compensation and benefits. Education made all the difference in the world to us. People can talk all they want too about "how you don't need to go to college". Avoiding college would have been a poor decision for both of us and we make education a priority for our children. This country still works for a large segment of people. My greatest worry is not for us but for our children and the upcoming generations.
For now, I will stop though. Life is good.
Last edited by markg91359; 09-22-2018 at 02:29 PM..
that applies to social security too,there is just a big lack of understanding on what is likely one of the biggest financial decisions we make in life
When it comes to financial literacy, K-12 schools don’t teach enough of it. Taking Spanish class, art class, history class, public speaking, etc. is fine but the most important knowledge one must have is how to manage money and how retirement works. Not only will it affect your life, but also the life of your immediate family.
I accepted an early retirement package from a large nuclear utility 17 years ago at 48 and will in a few years start to collect a pension at 65. What surprised me was the amount 17 years ago is exactly the same amount I will receive at 65- meaning no COLA- is it common not to have a COLA on a pension as they do have with SS?
Very few private company pensions have COLAs. Lots of government pensions do, which is one reason they are in trouble.
I think it is a combination of not wanting to know and a reaction to all those articles that say you need x million dollars to retire. Some people just live for today at any age. Anyone who wants to know can get an accurate estimate of their retirement income several years before they retire. Logically they wouldn't retire until the amount of their income is sufficient to do so. But if not, the vast majority will work part time, or come up with some way to have adequate food and shelter. Not a lot of people starve to death or are homeless in retirement. The number of homeless over 50 years old is something less than 1 in 10,000 of the population over 50.
DW has 2 small teachers pensions, one is COLA, and the other is not, but has a medical supplement. Mine from an electric utility will be maybe 5 times larger than hers, was non contributory, but has no COLA. However, I have a good 401k with matching in addition, and we both have SS, mine maxed out. Plus our IRAs. Flexibilty is key.
Last edited by Perryinva; 09-22-2018 at 05:24 PM..
Was pretty simple to figure out my pension. 65% of my last years salary.
Many are clueless though and really don't have any idea how much their actual pension will be. Is why I tell everyone that'll listen to prioritize your savings and invest for your future.
Was pretty simple to figure out my pension. 65% of my last years salary.
Many are clueless though and really don't have any idea how much their actual pension will be. Is why I tell everyone that'll listen to prioritize your savings and invest for your future.
65%? How did you pull that stunt?
Very fortunate, worked for a huge company that had a cash balance pension plan. After 20 years, could transfer my balance to an IRA or get an annuity of 5% of my last years salary. Rollover is up 14% in 2 years. Should be better, but ahead of locking into the fixed amount.
Government employees do not get fun stuff like stock purchase plans and k match so they rely on the pensions. I get that, but the math does not add up. State pension funding ranges from 99% to 31%.
I dunno, DH got 62% of his high three, and our's has an annual 2% COLA increase.
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I dunno, DH got 62% of his high three, and our's has an annual 2% COLA increase.
Mikila43, my rant is that with a k plan, when I leave I am off the books of my former employer.
Pensions require maintenance. Waste of time and money.
k plan everyone. No more pension management overhead.
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