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Old Yesterday, 07:35 PM
 
Location: Tennessee
24,068 posts, read 17,905,479 times
Reputation: 28236

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A government pension is essentially an all-but-guaranteed monthly check. You don't have to monitor or tune like your own retirement plan. Sure, a state with financial issues may be endanger of not meeting its obligations more than a better credit risk state, but it's still much better than many of the hoops of employer-sponsored contribution plans.
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Old Yesterday, 08:09 PM
 
16 posts, read 7,539 times
Reputation: 58
I've been retired for a year, I have a pension, and I rolled my 401k into a self directed IRA. I love having a pension, when the market drops I do not lose any sleep because I know my bills are covered by the pension.( and yes, I am aware of inflation ). I could have taken a buyout instead of a pension, almost all of the retirees from my employer take the buyout instead of the pension, but I am perfectly content having that money deposited into my account on the 1st of every month. I also thinks it makes me a better investor, because I am not a weak hand getting shook out every time the market drops hard, like last December. To each their own though, if you want to have 100% of your retirement assets in the market, good luck to you.
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Old Yesterday, 08:22 PM
 
Location: San Diego
35,773 posts, read 32,511,702 times
Reputation: 20177
Quote:
Originally Posted by TheShadow View Post
Many people that have pensions also have 401k, 403b, 457, etc. The difference really is that the numbered accounts are somewhat within your control as far as which funds they are in, within those permitted, and you can control your contributions. With a pension the contribution is mandatory and sometimes partially paid by the employer (similar to a 401k match). A pension is a defined benefit plan, so it will continue for life at a set rate for life (ignoring COLAs for the moment), while a numbered account can certainly run dry if not managed throughout retirement, or if the market goes through an extended down period. My DH had a pension and a small 457, and we managed his 457 to pay out between the time of his retirement (55) retirement and SS eligibility (62) to cover that $$ gap.

I'm not sure what OP means by people with pensions "puff up" when "declaring having one". ??? I have one, and I don't go around "declaring" it. It's nobody's business where my retirement income comes from, and I don't really talk about money issues unless I am answering a very specific question. I definitely don't discuss the numbers! Pension envy is real and it actually makes me even less inclined to discuss it. (I discuss it here anonymously, but IRL I would be very uncomfortable revealing all that I do on C-D.)

I never thought of my job as "being held hostage" for a pension. Most government pensions are portable within the government system. What I mean by that is they can shift from working at one state or city/county agency to another, say from the DMV to Tax Board, or Dept of Forestry, County Planning Commision, or any other agency within the same pension system, even from one end of the state to the other. It's hardly being a hostage, it's more like an advantage, as many of those jobs are only available through promotion from other government positions.
I have both and right now wish I could switch to Companies new 401k. They match to 15%. I ain't complaining though as I know I have a pretty good deal. IT for over 20 years. Medical for wife and I for life too.
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Old Today, 09:29 AM
 
1,550 posts, read 988,249 times
Reputation: 2965
Quote:
Originally Posted by beach43ofus View Post
If most are woefully underfunded now, on the back end of the longest Bull market in history at 3641 days, what will they look like at the back end of the next Bear market? Retirees are going to be adversely impacted, putting it softly.

Most projections I see say w/in 15 years, most of the poorly funded pensions will have failed. Some will fail sooner (Illinois, Kentucky, New Jersey, Connecticut, Colorado), and it will start out slow, but then gain momentum. The back stop will fail when Illinois, or New Jersey fails.

The good news is that most Cities, County's, and State now have "closed pension plans" which means new hires no longer get the pension benefits. Local governments finaly figured out that they are unsustainable.

I live in Sarasota, and ours is closed, however, the pension plan today is paying out more to retirees than is being paid out in wages to current active employees! Plus, its <76% funded. We'll be selling our home in 8 years so we don't caught in the New Jersey trap. The New Jersey trap will ensue in most places ~10 years from now when property taxes start getting jacked up to the max year after year to try to bail out the failing pensions, and then homeowners won't be able to sell homes due to the ulta high property taxes. Instead, they'll buy homes in later blooming County's that learned from the mistakes of older established County's.

Underfunded Pensions are the biggest financial problem looming in our economy, but they get very little press. The press likes to focus upon student loan debt, and China trade tarriff's instead.
And the Pension Benefit Guaranty Corporation (PBGC) - which backs private pension plans - is facing difficulties as well:

https://www.forbes.com/sites/ebauer/.../#1a5c810a2b4c

Employers - public and private - have failed to plan and live up to their obligations.
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Old Today, 09:44 AM
 
Location: Illinois
35 posts, read 9,248 times
Reputation: 46
I will have a federal employee pension, a 401K (TSP) and a Roth IRA in retirement--as well as SS. I will have 33 years in service at retirement and I have never felt I was being "held hostage" (I could very easily jump to another federal agency if I chose and bring everything with me). The peace of mind of a pension as I inch closer to retirement is meaningful to me.


There is a difference generationally though, my niece, for instance, in her early 30's has had more jobs in her young life than I have had--she is always looking for the bigger, better opportunity with mixed results...even had those employers offered pensions I doubt she would have been at any employer long enough to be vested. Lots of looking at the immediate pay out.
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Old Today, 11:28 AM
 
Location: Tennessee
24,068 posts, read 17,905,479 times
Reputation: 28236
Quote:
Originally Posted by Dreamingisfree View Post
I will have a federal employee pension, a 401K (TSP) and a Roth IRA in retirement--as well as SS. I will have 33 years in service at retirement and I have never felt I was being "held hostage" (I could very easily jump to another federal agency if I chose and bring everything with me). The peace of mind of a pension as I inch closer to retirement is meaningful to me.


There is a difference generationally though, my niece, for instance, in her early 30's has had more jobs in her young life than I have had--she is always looking for the bigger, better opportunity with mixed results...even had those employers offered pensions I doubt she would have been at any employer long enough to be vested. Lots of looking at the immediate pay out.
Raises and promotions are often so slow today that the only way to get any significant bump in salary or title is to switch jobs.

I have a "job hopping" resume. Sure, if I wanted to, I could have stayed at my first job out of college. I'd be making substantially less money as there was no really room to grow within that department.
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Old Today, 11:39 AM
 
1,504 posts, read 294,334 times
Reputation: 1781
Quote:
Originally Posted by Dreamingisfree View Post
I will have a federal employee pension, a 401K (TSP) and a Roth IRA in retirement--as well as SS. I will have 33 years in service at retirement and I have never felt I was being "held hostage" (I could very easily jump to another federal agency if I chose and bring everything with me). The peace of mind of a pension as I inch closer to retirement is meaningful to me.


There is a difference generationally though, my niece, for instance, in her early 30's has had more jobs in her young life than I have had--she is always looking for the bigger, better opportunity with mixed results...even had those employers offered pensions I doubt she would have been at any employer long enough to be vested. Lots of looking at the immediate pay out.
Yes, I also agree about the generation difference. My son at 29 has had more jobs then I ever did in my whole working career.
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Old Today, 11:42 AM
 
1,504 posts, read 294,334 times
Reputation: 1781
Quote:
Originally Posted by Serious Conversation View Post
Raises and promotions are often so slow today that the only way to get any significant bump in salary or title is to switch jobs.

I have a "job hopping" resume. Sure, if I wanted to, I could have stayed at my first job out of college. I'd be making substantially less money as there was no really room to grow within that department.
I would think everyone's definition of "too slow" regarding promotions/raises is different.
Many of the young folks that started at my company weren't happy with the additional benefits as that affects your salary. They preferred higher pay than tuition refund, employee stock plan, etc.
They seemed more "today" focused then looking at the long game of 30 years out.
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Old Today, 04:39 PM
 
Location: Kountze, Texas
271 posts, read 40,098 times
Reputation: 236
I am a Federal employee - 35 years so far - I intend to work until 62 and then will have just over 42 years - I did a calculator on OPM.gov today - and with my current pay and what my SS will be at 62 - the numbers give me over $1700 more a month than I take home right now - with all my deductions that won't be there at retirement. DH in retirement carries our family in FEHB Health Insurance - my TSP won't have to be touched with that much the I will be getting each month. I'm not worried at this point.
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Old Today, 05:23 PM
 
Location: Grove City, Ohio
10,170 posts, read 12,474,979 times
Reputation: 14126
I prefer the pension.

My wife has a small state pension that's only $282.65/month after they deduct the dental insurance for both of us.

How many times I have been thankful for the dental insurance I can not begin to count.

n top of this they reimburse her $181.86 for her Plan G and D supplements for a total of $464.51. But the best part is her medical savings account that can be used for dental, eye exams, glasses, our portion of prescriptions etc and as far as I can tell they fund it around $200/month so it isn't unusual to have a couple thousand set aside for anything not medical not covered by insurance.

As far as I can tell the lady in my life has zero in the way of any medical expenses... she has cataract surgery coming up soon (poor thing is going blind) and there is the $800 pair of glasses she'll have to get that won't cost.

Being a state pension she does get WEP'd by about $300/month but we're still money ahead.

We have money in a 401K but we're not planing to live on any of it so we'll just take the very minimum and leave the rest for emergencies in the future. Not a huge sum but if we had an emergency where we had to replace the car, the air conditioning, the furnace, freezer, washer, dryer and water heater we could replace all those one time if we had to.
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