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Old 01-06-2010, 08:43 AM
 
29,782 posts, read 34,871,258 times
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Quote:
Originally Posted by capt chill View Post
It would be very different. I was told I had to be in the pension system as a teacher in NJ. so for about 30 years I gave 5% a year of my salary to the system. along with the rest of the teachers. I get a pension now. That was the agreement that i signed every year. If pensions were not there, HOPEFULLY I would have been smart enough to have saved 20% of my takehome all the time. That would be the only way to make it work in retirement. Americans have been cheated . Pensions should be standard.
The problem with pensions and the New Jersey Pension problem is classic. How do you spread the risk of up and down markets? In the private sector the question becomes should the risk be carried by the pensioners or the company. If the economy takes a downturn the company might not be able to stay afloat and pay out pension costs. In the public sector is it fair for that burden to be on the shoulders of tax payers. You are right you began your career over 30 years ago and their was a commitment on your part and their part. However they did not always make the contributions to the fund that they were suppose to. In a number years the state legislature used that money for other purposes. However it is this population today and tomorrow that is being asked to burden the tax expense for decisions made years ago. That is the problem we face. On the other hand most state pension funds have billions in reserve and can pay out benefits for a large number of years. Most states have problems that are actuarial and may need modification for payout in the outlying years. Much of the debate about state pension reserves began in March at the bottom of the market. Just as our personal portfolio's have rebounded so have theirs.
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Old 01-06-2010, 01:13 PM
 
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I wouldn't call a federal "FERS" retirement a defined benefit, particularly when compared to the layman's perception of a pension, which is the "CSRS" retirement. 1% per creditable year is a joke as far as pensions go. Is it better than nothing? Sure. But that still is congruent with my assertion that ours will be a pensionless generation. Heck, by the time I reach my 60s that 1/3 FERS annuity might be crossed out and gone. And if people think the gov is not aware of the poor man's swiss account of the 21st century (the Roth ) I got a bridge to sell you.

As for TSP/401K, I've made my thoughts on those vehicles already.

As to SS (the third " component" of FERS), I find it insulting for people well versed on retirement finances to bring that up with a straight face.

For CSRS people, tinkering with TSP was " play money". For FERS people, it's survival money like the rest of the 401K crowd. Big difference. CSRS folk got no spoon to stir on that pot.
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Old 01-06-2010, 01:37 PM
 
4,574 posts, read 7,060,700 times
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I work with lots of young people right out of college...I see them spending lots of money on recreation, vacations, clothes, phones, etc. It's hard for young people to project that far into the future to imagine what their lives will be like...just the same as it was for us. I do think they have some clue that they will need to take care of themselves financially but they also believe that the boom times will be back and all will be well. Maybe by the time they reach middle age, it will be!
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Old 01-06-2010, 01:48 PM
 
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As they say youth is wasted on the young.........
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Old 01-06-2010, 03:39 PM
 
8,201 posts, read 11,915,499 times
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Quote:
Originally Posted by hindsight2020 View Post
I wouldn't call a federal "FERS" retirement a defined benefit, particularly when compared to the layman's perception of a pension, which is the "CSRS" retirement. 1% per creditable year is a joke as far as pensions go. Is it better than nothing? Sure. But that still is congruent with my assertion that ours will be a pensionless generation. Heck, by the time I reach my 60s that 1/3 FERS annuity might be crossed out and gone. And if people think the gov is not aware of the poor man's swiss account of the 21st century (the Roth ) I got a bridge to sell you.

As for TSP/401K, I've made my thoughts on those vehicles already.

As to SS (the third " component" of FERS), I find it insulting for people well versed on retirement finances to bring that up with a straight face.

For CSRS people, tinkering with TSP was " play money". For FERS people, it's survival money like the rest of the 401K crowd. Big difference. CSRS folk got no spoon to stir on that pot.
Oh, please.

While it's true that FERS employees absolutely must contribute at least enough to TSP to maximize the government's matching contributions (5%), an employee who does so will have more in retirement (between TSP, SS & the defined benefit annuity) than a CSRS employee who contributes nothing to TSP, has no SS, and just plans to rely on the CSRS pension. So, you can either do something to maximize your retirement nest egg, or you can continue to whine about your lot in life.

Oh, and btw, even though I will have a CSRS annuity, my wife retired under FERS with no problems whatsoever. Of course, she was contributing the maximum amount each year to her TSP.
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Old 01-07-2010, 07:30 AM
 
1,749 posts, read 3,987,774 times
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Quote:
Originally Posted by loveautumn View Post
I work with lots of young people right out of college...I see them spending lots of money on recreation, vacations, clothes, phones, etc. It's hard for young people to project that far into the future to imagine what their lives will be like...just the same as it was for us. I do think they have some clue that they will need to take care of themselves financially but they also believe that the boom times will be back and all will be well. Maybe by the time they reach middle age, it will be!
I'm 6 years removed from college and 4 removed from grad school, but I make right about median individual income, so I can somewhat qualify the behavior of the relative "new hires".

Basically it's a question of purpose. If the purpose of working is so that I can bring home just enough money to afford the the roof, food, clothing, medicine and transportation that will keep me healthy and able enough to allow me to make it to work tomorrow, that's not a life worth living in the first place. Working a job just so that I can afford to work at that job, we call that an infinite loop construct, an oxymoron of a life.

Retirement contentions in the new economic paradigm have inched our aggregate financial pictures closer to touching on that infinite loop scenario. That's a moral hazard. I'm not going to live a life where I work a job solely so that I can afford the ability of showing up to said job tomorrow.

Likewise, any residual income is supposed to erode away in some "retirement" vehicle whose balance sheet will not allow me to self-actualize either, as a function of "deferred gratification" (the proverbial 80 year old skydiver, a fallacy btw), but merely allow me to survive long enough to witness the indignity of not being able to control my body functions before God finally allows me to pull the plug? hell naw. That's not the point of living. Not at 75, and certainly not at 30.

I can't speak for my generation, and I do consider myself among the minority of my generation when it comes to financial thinking and socio-political awareness in general, but I'll give them ipods and the occasional mexico vaca'; what the hell, you ain't making enough to retire to the standard that will allow you to self-actualize anyways. I say self-actualize today and screw surviving tomorrow. Now, that's a hyperbolic extension of the point, but you catch my drift.

I do think more Gen X/Y have done the math on this and behave the way they behave not because of lack of knowledge but because of that very financial knowledge most current retirees do not give them the credit of having. I know I've done the math, and in the absence of a pension I'll require at least 4x median income to be able to save "out of sight out mind" enough funds to be able to live a nominal standard of life congruent with 75% of my productive income for life, and that's with retarded (as in 'you smelled too much glue' retarded) assumptions of market gains. I'm not confident at all I'll make that kind of income in time to make it count. As such I'm not gonna fuss about the 5-10K a year that's not gonna help me self-actualize in retirement the way it can help me self-actualize today. I'm not discounting there could be a retirement vehicle available to us in the future that could bridge that gap, I'm just not gambling my singular lifetime to find out.

P.S. I don't think the "boomer" bubbles will be back. I look at modern day Spain and Brazil as case studies of what the US will look like both politically and socio-economically in 30 years. These are not fatal indictments on the US, but it certainly is not what any of us signed up nor "accepted" (though I didn't personally) a 60-hour workweek and a hyper-productivity culture for.
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Old 01-07-2010, 10:37 AM
 
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"that's not a life worth living in the first place"...I'm sorry to hear you feel that way. Live is precious and worth living even if you just break even every day. Lots of people wish they could just break even and would be happy to have those jobs. You might be very surprised what you will become willing to do once you hit middle age, have children, etc.

I do agree with you that the boomer bubbles are over, at least for quite awhile. Although we as a society have very short memories...
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Old 01-07-2010, 12:08 PM
 
6,256 posts, read 4,734,369 times
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""that's not a life worth living in the first place"...I'm sorry to hear you feel that way. Live is precious and worth living even if you just break even every day. Lots of people wish they could just break even and would be happy to have those jobs. You might be very surprised what you will become willing to do once you hit middle age, have children, etc"

That is one of the most defeatist, depressing statements I have seen in quite a while. I would agree with the previous poster - just getting by is insufficient. Being trapped in a bad job because of family obligations happens all too frequently. Life is too short just to settle for getting by. That is the sort of thing that happens in 3rd world subsistence communities. We should all hope for something more.
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Old 01-07-2010, 09:37 PM
 
Location: Baltimore, MD
3,745 posts, read 4,218,356 times
Reputation: 6866
Geez, hindsight2020,

You really butchered the concept of self-actualization. Maslow must be rolling over in his grave.
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Old 01-07-2010, 09:43 PM
 
Location: zippidy doo dah
895 posts, read 1,331,660 times
Reputation: 1928
Default a life worth living...........

Don't mean to be a "hindsight" cheerleader here, but I appreciate his/her take on the issue. I think the point was quality of life -squirreling away every dime for when you are eighty-five years old. I get discouraged this far down the road when I read how much people say you have to save for retirement/the constant pounding on how much health insurance supplemental policies will cost/the out of pocket costs/the long-term care/etc and so on. The seemingly impossible odds of achieving sufficient savings etc under the most austere of budgets, all to likely end up gone anyway when one succumbs to the independent living/assisted living/memory unit state of life. How incredibly depressing has it got to be if you are at the point of starting your adult life????? The game has become crazy and it does seem that the take home message is sacrifice everything for the first 60 plus years or so so that you can survive your infirmities???? I'll accept that maybe Gen x and gen y spend money in a way that older generations might sigh about , but didn't we all? And didn't money go further? And didn't we as the parents of the kids model for them a pretty sleek life style so that they assumed that was what life was? I'm sorry - I feel bad for these guys. I feel bad for most all of us in every generation who are being freaked out by the doom and gloom of outliving one's pension. My mother asked one day what would happen if I didn't have health care and I got sick and I pretty much adapted the Irish prayer stance that if I'm sick, I will either get well or I'll die. If I die, then the only issue is will I go to heaven or hell" and so on. I can't prepare for every disaster that could befall me later in life - i don't expect my kids or anyone's kids to be able to do likewise. And I'm not a socialist - I just find all of this fairly horrid. Ok, back to enjoying my life, being responsible but not allowing this to get me but so down..... And Hindsight, you're right - there is more to this than working every day for the privilage of showing up to work again the next.

Quote:
Originally Posted by hindsight2020 View Post
I'm 6 years removed from college and 4 removed from grad school, but I make right about median individual income, so I can somewhat qualify the behavior of the relative "new hires".

Basically it's a question of purpose. If the purpose of working is so that I can bring home just enough money to afford the the roof, food, clothing, medicine and transportation that will keep me healthy and able enough to allow me to make it to work tomorrow, that's not a life worth living in the first place. Working a job just so that I can afford to work at that job, we call that an infinite loop construct, an oxymoron of a life.

Retirement contentions in the new economic paradigm have inched our aggregate financial pictures closer to touching on that infinite loop scenario. That's a moral hazard. I'm not going to live a life where I work a job solely so that I can afford the ability of showing up to said job tomorrow.

Likewise, any residual income is supposed to erode away in some "retirement" vehicle whose balance sheet will not allow me to self-actualize either, as a function of "deferred gratification" (the proverbial 80 year old skydiver, a fallacy btw), but merely allow me to survive long enough to witness the indignity of not being able to control my body functions before God finally allows me to pull the plug? hell naw. That's not the point of living. Not at 75, and certainly not at 30.

I can't speak for my generation, and I do consider myself among the minority of my generation when it comes to financial thinking and socio-political awareness in general, but I'll give them ipods and the occasional mexico vaca'; what the hell, you ain't making enough to retire to the standard that will allow you to self-actualize anyways. I say self-actualize today and screw surviving tomorrow. Now, that's a hyperbolic extension of the point, but you catch my drift.

I do think more Gen X/Y have done the math on this and behave the way they behave not because of lack of knowledge but because of that very financial knowledge most current retirees do not give them the credit of having. I know I've done the math, and in the absence of a pension I'll require at least 4x median income to be able to save "out of sight out mind" enough funds to be able to live a nominal standard of life congruent with 75% of my productive income for life, and that's with retarded (as in 'you smelled too much glue' retarded) assumptions of market gains. I'm not confident at all I'll make that kind of income in time to make it count. As such I'm not gonna fuss about the 5-10K a year that's not gonna help me self-actualize in retirement the way it can help me self-actualize today. I'm not discounting there could be a retirement vehicle available to us in the future that could bridge that gap, I'm just not gambling my singular lifetime to find out.

P.S. I don't think the "boomer" bubbles will be back. I look at modern day Spain and Brazil as case studies of what the US will look like both politically and socio-economically in 30 years. These are not fatal indictments on the US, but it certainly is not what any of us signed up nor "accepted" (though I didn't personally) a 60-hour workweek and a hyper-productivity culture for.
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