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The more I see how difficult it is for California and many states to keep paying public workers' retirement for the rest of their retirements, the more I am beginning to see that maybe the states and feds should get out of the retirement business altogether.
Pay the workers a higher salary and stop offering retirement packages, and still make it mandatory that workers save into a tax shelter annuity or some type of insured retirement account, and perhaps that would alleviate the high cost of states and the feds funding retirement accounts that they can no longer afford to do at the tax payer's expense.
What do you think about this, crazy or not realistic?
The more I see how difficult it is for California and many states to keep paying public workers' retirement for the rest of their retirements, the more I am beginning to see that maybe the states and feds should get out of the retirement business altogether.
Pay the workers a higher salary and stop offering retirement packages, and still make it mandatory that workers save into a tax shelter annuity or some type of insured retirement account, and perhaps that would alleviate the high cost of states and the feds funding retirement accounts that they can no longer afford to do at the tax payer's expense.
What do you think about this, crazy or not realistic?
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maybe it is time to set up individual self directed IRA.s for ALL pensions. Who has more incentive in investing your money? You or some wall street firm? Are these people any smarter or more capable than you could be with some study? Probably not. The real question is WHO DO YOU TRUST?
Since most of us in the private sector have either never had pensions, or seen our vested pensions be legally dissolved (my family), I think it is only fair to spread the pain over all of society. We are all forced to pay taxes all our lives so we can ensure that everyone in society has a safety net, no matter how unlucky or irresponsible they may be.
I'd say the public sector workers--who are now paid more than private sector workers, have much better benefits packages, and work much less hours overall--should be equalized with the lot of every other worker. Let's not forget, our economic woes have largely been caused by fiscally irresponsible government (constant wars with no purpose, overspending, borrowing past the point of insanity) in collusion with Big Business.
Frankly, if the government wanted to improve the future of all Americans, it would allow us all to put ANY amount into our retirement accounts, before taxes. We could pay their taxes when we take the money out to live on it. Why doesn't it allow this? Pure government greed.
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maybe it is time to set up individual self directed IRA.s for ALL pensions. Who has more incentive in investing your money? You or some wall street firm? Are these people any smarter or more capable than you could be with some study? Probably not. The real question is WHO DO YOU TRUST?
GL2
I agree. I don't even trust myself. All I can do is just pray to make the right financial decision.
Frankly, if the government wanted to improve the future of all Americans, it would allow us all to put ANY amount into our retirement accounts, before taxes. We could pay their taxes when we take the money out to live on it. Why doesn't it allow this? Pure government greed.
I agree with you. It's the same with home ownership. Why is it that it the average mortgage takes 30 years to repay? Yes, I know that they are 15 year options. But, again our government's greed is forcing people to pay off a mortgage for almost their entire lives. The banks have to charge the interest rates to make a profit before they can pay the government back for allowing them to lend us the money in the first place. I hadn't thought about that until I I spoke to a broker who was complaining how he had to reduce his mortgages by modifying them down in some cases as low as 3% while the government wasn't reducing its rates to these same banks, lenders or brokerages.
I agree with you. It's the same with home ownership. Why is it that it the average mortgage takes 30 years to repay? Yes, I know that they are 15 year options. But, again our government's greed is forcing people to pay off a mortgage for almost their entire lives. The banks have to charge the interest rates to make a profit before they can pay the government back for allowing them to lend us the money in the first place. I hadn't thought about that until I I spoke to a broker who was complaining how he had to reduce his mortgages by modifying them down in some cases as low as 3% while the government wasn't reducing its rates to these same banks, lenders or brokerages.
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How can the government reduce Bank interest rates when the FED is lending them money at less than one per cent? I have a difficult time feeling sympathy for a Bank getting money for less than one percent then charging up to 33% on a credit card. ***** em!.
The more I see how difficult it is for California and many states to keep paying public workers' retirement for the rest of their retirements, the more I am beginning to see that maybe the states and feds should get out of the retirement business altogether.
Pay the workers a higher salary and stop offering retirement packages, and still make it mandatory that workers save into a tax shelter annuity or some type of insured retirement account, and perhaps that would alleviate the high cost of states and the feds funding retirement accounts that they can no longer afford to do at the tax payer's expense.
What do you think about this, crazy or not realistic?
Unfortunately, they're stuck with what they've already promised.
I agree though. They never should have been in the retirement business. They took out a loan to deal with the budget. Instead of giving raises so people could manage their own retirement, they promised a pay out in the future. Now they have to pay the piper.
If an entity, company, government or whatever, offers retirement it should be a defined contribution plan. A plan they pay a set amount into and the worker owns it to be used as they see fit when they retire.
The fellow teachers I know don't rely on their pensions as the sole source of their retirement money, as it wouldn't be enough. We've got 403bs and IRAs too. Unfortunately, we lost any social security benefits we earned through work prior to our teaching careers when we chose to become teachers.
No one forces you to pay off a mortgage for 30 years either. You've got some options. 1) Don't get a mortgage - buy with cash (or rent). 2) Get a 30 year mortgage that has no prepayment penalty and pay it off as soon as you want to.
I think it depends on the state/locality. MD has redone the pension system for teachers (part of the MD State Retirement System) two or three times in the last 30 years. New hires (the last 10 years) have a totally different retirement plan than I do (27 years) and mine is totally different, with much lower benefits, than those with a few years more than I do. Between Social Security and pension contribution I contribute just under 17% of my salary to the two funds. It is a defined benefit plan while newer hires have a combination between defined benefit and defined contribution. People more senior than me that stayed with their original plan have a much higher defined benefit with a lower contribution.
My contribution is also from after tax income, but that doesn't stop my paying state income tax on both pension and Social Security when I retire, which is why many retirees leave the state.
I worked for a municipality for a few years. They took a good chunk of my paycheck, relatively speaking, for "retirement". It seemed inconvenient.
My husband worked for a state university, and again they took a great chunk of his paycheck for retirement, money we needed then not later. I got a statement from the Board of Retirement that the $49,000 they had taken from him had earned $200 in interest. I called them up to find out what the hell they were doing with all that money to earn so little interest and voila! found out all about the state retirement system.
For husband, if he stayed working only TEN years, at retirement age he would collect 65% of his highest years salary till DEATH.
I could not believe that when I heard it. So basically, had he stayed with them for 10 years, he might have put in a couple hundred thousand, and if he retired and collected for 20 years it could have amounted to over a couple million dollars. I knew right then something was definitely wrong with the state retirement system.
I can't remember the details for mine, but it was pretty lucrative, generally speaking.
I don't know what the solution is here, but no one should get a pension of 65% of their highest salary for the rest of their life.
Oh, wait, I forgot, we would also be eligible for HEALTH INSURANCe for life, both of us. Talk about a high value, high cost benefit.
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