U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old Yesterday, 08:05 AM
 
29,992 posts, read 35,077,747 times
Reputation: 11874

Advertisements

Quote:
Originally Posted by Mae Maes Garden View Post
Just curious...tho pensions are “old school”, are people more financially comfortable mentally if they have a pension vs a 401K? It seems that pensioners puff up declaring having one but they have zero clue about 401Ks and how one can be expected to be responsible for their retirement income. Always an interesting convo. I mention that I could never be held hostage to the promise of a pension if it means I have to stay at one employer for 30 years to earn the pension. This is usually a convo with a government worker.
In what living universe did you conclude pensioners have no clue about 401Ks. Is it perhaps because public sector employees have the 403B equivalent?
Reply With Quote Quick reply to this message

 
Old Yesterday, 08:23 AM
 
Location: Loudon, TN
5,946 posts, read 4,937,281 times
Reputation: 20117
Quote:
Originally Posted by Hemlock140 View Post
I agree the more sources of income the better. I’ll have a pension, 401k, 457, and SS. My wife has a pension and SS. With all of that we will still only have about 60% of our current income, but with less expenses should be comfortable. Pensions are not what they used to be, with the plans changing for the worse over the years. I know people that retired in the 80s on older plans that with SS took home more than when they were working.
My DH is one of those who makes more on his pension + SS than when working, but when I receive SS, my SS +pension will only be half my working salary...so we cancel each other out! That's okay, I was the big earner when working, and now he can pull the weight!
Reply With Quote Quick reply to this message
 
Old Yesterday, 10:37 AM
 
Location: Western Washington
9,159 posts, read 8,546,357 times
Reputation: 15862
Quote:
Originally Posted by VikingFan View Post
My wife and I work public sector in the state of Minnesota. So we will get what I consider to be the last of the really good pensions within our state (law change in 1989 made early retirement before age 66 punitive) so we will be able to retire at 55 & 57 in a couple years with basically half of our average salary based on our highest 5 consecutive years, which are usually a persons last 5 years of work. I’ve spent my career in regulatory and enforcement divisions and have enjoyed my job. My wife has been in Information/Technology and though she has been relatively highly paid for a public employee has turned down numerous more lucrative and interesting options due to the pension handcuff. I think newer employees who work entire career with my state would be better served in a 401k type system with a match provided they invested it at same percent as the existing pension system and achieved a market return. Where a public pension is a great deal is foe someone who comes from the private sector in their mid 40’s (with a healthy 401k account they let grow) and then works for state 20 years retire at 66 with a pension of 34% (1.7 x 20 years)of their high 5 salary with no huge penalty for retirement before age 66. Best of both worlds.
On another tack I find it interesting that many people are envious of pensions and the guarantee of not running out of money and having to manage portfolio distribution but few people actually consider purchasing one via a single premium income annuity. Pros and cons.
Yes. More through luck than with planning this is the course that I am on. When I retire, the combination of state pension, 403b, 401k, and SS will give me about 80% of my current salary. That is a pretty rough, but conservative calculation. I have not decided whether I will purchase an income annuity or not, that decision is a few years off.

This, plus non-retirement savings and assets, should see me through with a comparable standard of living in retirement.

The pension alone would not cover my retirement needs, any more than SS would. I could lose either and be ok, but I would have to do some belt-tightening at that point.
Reply With Quote Quick reply to this message
 
Old Yesterday, 10:51 AM
 
2,360 posts, read 827,549 times
Reputation: 6048
Quote:
Originally Posted by TuborgP View Post
In what living universe did you conclude pensioners have no clue about 401Ks. Is it perhaps because public sector employees have the 403B equivalent?
A former HS classmate told me that her savings plan as a teacher was "just like a 401(k)" because she had to contribute to it. I asked her if it provided a lifetime income she couldn't outlive. Yes, it did.

That ain't no 401(k), honey.
Reply With Quote Quick reply to this message
 
Old Yesterday, 10:52 AM
 
Location: SW Florida
9,834 posts, read 7,135,110 times
Reputation: 14447
Quote:
Originally Posted by Mae Maes Garden View Post
Just curious...tho pensions are “old school”, are people more financially comfortable mentally if they have a pension vs a 401K? It seems that pensioners puff up declaring having one but they have zero clue about 401Ks and how one can be expected to be responsible for their retirement income. Always an interesting convo. I mention that I could never be held hostage to the promise of a pension if it means I have to stay at one employer for 30 years to earn the pension. This is usually a convo with a government worker.
Different strokes and all that....

I'm happy to say that my husband and I both have defined pensions (these form the majority of our retirement income) and healthy 401K , 403b savings. We also made plans long ago to be as debt free as possible in our retirement, and overall are reaping the benefits of that planning.

We've always been entirely aware that we're responsible for ourselves in retirement, despite your apparent disparaging comments about "pensioners". I suspect we aren't alone in that regard.
Reply With Quote Quick reply to this message
 
Old Yesterday, 11:17 AM
 
Location: Western Washington
9,159 posts, read 8,546,357 times
Reputation: 15862
Quote:
Originally Posted by athena53 View Post
A former HS classmate told me that her savings plan as a teacher was "just like a 401(k)" because she had to contribute to it. I asked her if it provided a lifetime income she couldn't outlive. Yes, it did.

That ain't no 401(k), honey.
No, but there are similarities.

I put 7% of my salary into my pension plan, which is matched by my employer. If I leave employment, I get my contribution, plus any appreciation in value, to take with me. In that sense it is very much like a 401k, in that it is somewhat portable. It isn’t as good as a 401k because I cannot take the employer match with me, and it is better than a 401k if I retire from the system, because of the defined benefit portion.

In another sense it lags behind a 401k, because If I die early, children would not receive any remaining assets. As I have no children this is not a concern for me, but for others it may be a factor to consider.

Different retirement plans have different strengths and weaknesses. You cannot categorically say one is better than the other.
Reply With Quote Quick reply to this message
 
Old Yesterday, 12:22 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
30,172 posts, read 55,041,366 times
Reputation: 31662
Quote:
Originally Posted by Mae Maes Garden View Post
Just curious...tho pensions are “old school”, are people more financially comfortable mentally if they have a pension vs a 401K? It seems that pensioners puff up declaring having one but they have zero clue about 401Ks and how one can be expected to be responsible for their retirement income. Always an interesting convo. I mention that I could never be held hostage to the promise of a pension if it means I have to stay at one employer for 30 years to earn the pension. This is usually a convo with a government worker.
Where I work (public agency) you are vested at 5 years, though obviously you wouldn't get much with such a short tenure. One good thing, though, is that there are many other public agencies in the same retirement system through the state (PERS). People can and do change jobs and move up the ladder by working at other agencies while continuing to add to the same pension system. One o my employees, for example, worked for the City of Seattle in two different departments for 10 years before coming here, so after only 8 years working for me has over 20 years in the retirement system.
Reply With Quote Quick reply to this message
 
Old Yesterday, 12:40 PM
 
11,062 posts, read 9,459,182 times
Reputation: 6762
Saying you're confident in your pension is saying you're confident in the ability of the organization paying the pension to keep doing so. If it's a private pension, what happens if the company declares bankruptcy? This has burned a lot of people. There are also a lot of government pensions are grossly underfunded. There well be a huge amount of political sturm und drang when these hit the financial wall.

With a 401K, at least it's your money under your control. You just have to save enough and invest correctly.
Reply With Quote Quick reply to this message
 
Old Yesterday, 12:41 PM
 
3,087 posts, read 1,081,082 times
Reputation: 3441
Quote:
Originally Posted by athena53 View Post
A former HS classmate told me that her savings plan as a teacher was "just like a 401(k)" because she had to contribute to it. I asked her if it provided a lifetime income she couldn't outlive. Yes, it did.

That ain't no 401(k), honey.
Well it depends. Right now in Florida teachers give 3% of income towards their retirement fund. That was a pension at one time but slowly it has evolved into a 401k plan under the Florida Retirement system.

So if that’s what your friend is under then yes it’s a 401k plan in which he/ she and her employer are putting in money and he/she chooses the investments in it. But in that case it wouldn’t guarantee her payments as long as she lived unless she is putting her money into an annuity which is also a choice
Reply With Quote Quick reply to this message
 
Old Yesterday, 01:56 PM
 
29,992 posts, read 35,077,747 times
Reputation: 11874
Quote:
Originally Posted by athena53 View Post
A former HS classmate told me that her savings plan as a teacher was "just like a 401(k)" because she had to contribute to it. I asked her if it provided a lifetime income she couldn't outlive. Yes, it did.

That ain't no 401(k), honey.
Sure that was a pension. There are some with pensions who are not familiar with 401/403 structures and how they differ. If it is a large employer there are plenty of 403B vendors hanging around after hours. Often selling offering annuities as one of the options.
Reply With Quote Quick reply to this message
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.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top