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Old 11-06-2009, 08:08 AM
 
1,662 posts, read 4,011,409 times
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Quote:
Originally Posted by Susan815 View Post
Having no pension when I was laid off, I didn't realize all the games that are played by employers to avoid paying them. You have really given me an education on pensions!
Oh boy

The vast majority of employers who offer pensions or did at one time, did so with the best of intentions. Most employers do not try to screw their employees out of their pensions.

A few do and those are the ones that make the news and make people think that pension=bad and that pension plans are worthless.

What does happen QUITE often is that people don't understand their pension benefits. They don't understand how the plan works and what they are really getting or giving up when they leave. Some of that blame falls on employers for not explaining it well enough. But most of the shift away from pensions anyway is due to the reasons noted in my post above.

For example, many plans offer monthly benefits prior to normal retirement age. If you are 55 and have earned a benefit of $1000 per month, payable at age 65, the Plan might allow you to retire early and begin receiving payments immediately.

Now, the benefit is likely to be reduced. Maybe you only get $850 or so. Maybe you only get half at age 55! People refer to this as an "early retirement penalty" or "getting screwed out of my pension." They forget that the benefit is a benefit for life and that they are going to receive 120 additional payments! It's actually a subsidy, but people don't see it that way.

Another example: Pension benefits by nature and design grow slowly in the early years of employment. They are typically a function of pay and years of service. So if you leave employment after just a few years or if you have only a few years worked when the plan terminates, your benefit will be pretty small. The longer you earn benefits in a pension plan, the faster they grow.

Again, people don't realize this and so if they leave after only about 10 years or so, the pension to them is a joke. They don't realize what they lost because the benefit had barely started to grow.

Then you have the many pension plans that are terminating. In this case, a younger, shorter service employee may have a very small monthly benefit. However, with interest rates at historical lows, there is a great opportunity there to take the lump sum that is offered (which is higher than it would be if rates were higher) and INVEST it to make more of what's been given. ROLL IT OVER. SAVE IT.

But people don't. It doesn't seem like enough to bother with. So they lose a chunk of it to taxes, they spend the rest. And then they sit around and complain about how the company screwed them! When you do that - you HURT YOURSELF!

A "measly" monthly benefit that results in a $5,000 lump sum, saved for 30 years to retirement age, can become $29,000 or more. No, you can't live on that alone. But for a few years of work, it's not exactly a kick in the pants by the employer.

Yes, I know there are many stories out there of people who have been screwed. Everybody knows someone or has been that someone. But it's very important - especially in this economic environment that we are not so quick to jump on the bandwagon and assume that every employer is out to screw us.

Stop and try to put things in perspective. Stop to wonder if maybe there is a missing piece of information in that story. Because quite often, there is!

Last edited by Samantha S; 11-06-2009 at 08:17 AM..
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Old 11-06-2009, 08:34 AM
 
Location: Westchester County, NY
144 posts, read 478,715 times
Reputation: 197
Didn't mean to imply ALL employers try to avoid pensions. I feel like I have been put in a position of defending my comment. I definitely am not anti-pension and I am aware of how reduced pensions work based on years of service. My dad drew a reduced pension when he became disabled years ago from his union job. Just didn't realize the post would draw all the "pension" stories. Probably will sit on the sidelines and not start a thread until I am more familiar with the site.
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Old 11-06-2009, 08:51 AM
 
1,662 posts, read 4,011,409 times
Reputation: 537
Quote:
Originally Posted by Susan815 View Post
Didn't mean to imply ALL employers try to avoid pensions. I feel like I have been put in a position of defending my comment.
Not at all, Susan. My post was not targeted at you specifically. Your thread did generate a few sidetracks and discussions, so I was speaking to whatever group might be following this thread.

Generating discussion is a good thing! Your input is valuable! I hope you don't conclude otherwise.
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Old 11-07-2009, 08:01 AM
 
Location: SW Florida
201 posts, read 189,281 times
Reputation: 340
Quote:
Originally Posted by LauraC View Post
Just know that there are places where you can live comfortably on less money for the basics (housing, utilities, taxes) plus also offer a lot of free events/activities so you don't have to sit home and veg due to little money.

For the latter, look for places that have a lot of state and/or national parks where you don't have to pay to park or enter. These parks typically offer free nature-related activities (guided wildflower walks, birding walks, bug and reptile presentations, living history events, etc.) plus the exercise of biking/walking and in some cases, a beach. Look for a festival/fair-happy place where anything is a reason to celebrate. I swear that in my state they celebrate everything from tomatoes to cornbread to holidays to historical events to trees to antiques to opera and the festivals almost always are free and offer free things like music, tours and re-enactments in addition to booths and food that you pay for. There are also towns with their own bands and orchestras that offer free concerts outdoors. You just have to bring a chair. Plus, there is always some group or individual willing to demonstrate a skill/talent at these events. Look for parades (they're free). Look for places where you don't have to pay everytime you hit a highway or a bridge when you leave the town or pay to park when you get where you are going.

I never knew all of this free stuff existed when I was in the workforce but you'd be surprised at what's out there and nearby.
Hi,
It sounds like you have much to do where you live. Would you mind telling me where you live? (What state or area?) I am not yet retired, but the place I work for is in trouble with many layoffs. I too may face early unemployment if they continue this way. I have been looking for alternative places to live, maybe warmer, less expensive, parks, beaches, etc. Thank you.
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Old 11-07-2009, 08:08 AM
 
Location: SW Florida
201 posts, read 189,281 times
Reputation: 340
Hi, It sounds like you have alot to do in your area. Would you mind telling me where you live? I too have been looking for an alternative area, possibly warmer and with activities which are not so expensive. I am in the Northeast but am thinking about moving in the future. I am still employed but the place I work for is in trouble, having many layoffs. Thank you very much
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Old 11-07-2009, 03:37 PM
 
11,273 posts, read 11,296,076 times
Reputation: 3475
Quote:
while they relaxed in the South Pacific.
Where, exactly, in the South Pacific are they relaxing? I'd like to daydream a little about living that kind of retirement.
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Old 11-07-2009, 05:33 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,693 posts, read 40,062,283 times
Reputation: 23839
Quote:
Originally Posted by thrillobyte View Post
Where, exactly, in the South Pacific are they relaxing? I'd like to daydream a little about living that kind of retirement.
Cook Islands IIRC, South Pacific Travel - Fiji, Tahiti, Tonga, Samoa, Cook Islands

I am currently looking at logistics of moving to the Northern Marianas. Marianas Visitors Authority - Visitor Information on the islands of Saipan, Tinian and Rota - CNMI (a bit north of South Pacific)

I met a person for American Samoa the other day, and they can hardly wait to return for retirement. Very low cost of living for nationals. Supposedly beach houses for $30k (a small 'local' version, not an 'American' version)

Having lived on the equator (and an island, Singapore) it does have some disadvantages, but also would be good for awhile.
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Old 11-08-2009, 08:48 AM
 
11,273 posts, read 11,296,076 times
Reputation: 3475
Well, there's not much to go back to in the American Samoans since the tsunami wiped out most of the island. In the Marianas I think Guam would be your best bet as it is the most Americanized of the islands and you don't need a passport to enter. The Marianas suffer excruciating humidity and both are prone to tsunamis and typhoons. Consider carefully.
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