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Pensions for public servants are fine, I've got no problem with it being a benefit for those who work government nor do I mind how much they are. The problems are:
1. Too early, many are structured so people can retire in their 50s. Federal is late 50s + 30 years service, my wife's is even worse 80 points (combination age + service) so people can retire in early to mid 50s. We laugh at people protesting in France about age moving up from 60 to 62, yet here we with our own government workers retiring in their 50s.
2. Loopholes that allow for spiking because the timeframe to measure average salary is too short, sometimes one year sometimes last three years of work. Many plans allow people to cash in unused sick time and vacation that greatly increase salary over the last year to misrepresent earnings, another is piling on overtime.
3. Double dipping. Here in Phoenix the police chief retired then was hired back as a civilian running the police with a six figure salary. Many local school officials and teachers do the same, retire then come back under contract.
Phew
Agreed on all points. Police/Firefirghters here in the Bay Area can retire as early as age 50, with 90% of pay after 30 years of service. Other civil service workers, it's more like 75% after 30 years, and 55 the minimum age. As much as I want to retire at 55, I think even that is a little too generous.
The opportunities for double dipping are limited in my area, I think.
Pension spking is alive & well for cops/firefighers where I live. They also retire on "disability" so they don't have to pay income tax on their pensions. This does not happen as a normal thing for other civil service workers. The disability retirement thing is a particular problem in San Jose, where I work.
Where I work, they have gotten rid of or reduced the sick time payouts for some management bargaining units and will be sure to do the same for the rest of us before long. On the one hand, I think it s*cks...but I do understand the need.
As I said, my biggest gripe is that cops/firefighters in my area have gotten the biggest raises & benefit increases in the last decade but will (most likely) take the smallet hits...even though their salaries make up a much larger portion of the general fund compared with other civil service workers.
Agreed on all points. Police/Firefirghters here in the Bay Area can retire as early as age 50, with 90% of pay after 30 years of service. Other civil service workers, it's more like 75% after 30 years, and 55 the minimum age. As much as I want to retire at 55, I think even that is a little too generous.
The opportunities for double dipping are limited in my area, I think.
Pension spking is alive & well for cops/firefighers where I live. They also retire on "disability" so they don't have to pay income tax on their pensions. This does not happen as a normal thing for other civil service workers. The disability retirement thing is a particular problem in San Jose, where I work.
Where I work, they have gotten rid of or reduced the sick time payouts for some management bargaining units and will be sure to do the same for the rest of us before long. On the one hand, I think it s*cks...but I do understand the need.
As I said, my biggest gripe is that cops/firefighters in my area have gotten the biggest raises & benefit increases in the last decade but will (most likely) take the smallet hits...even though their salaries make up a much larger portion of the general fund compared with other civil service workers.
Yup,
Then the stupid tax payer gets mad. After they slam all the other departments other than Public Safety, services get cut yet they still have to raise taxes to support the salaries and pensions of Public Safety. So the public will again demand goverment make cuts, which will fall on all the other departments EXCEPT where the biggest expenses occur, in Public Safety. Then the cycle begins again. The general public have to realize, most of these cops and firefighters are going to make the big bucks and, there is a good chance, will go out on disability(around 50ish) with a very very generous pension with medical.
I am a 25 year old single guy who earns about 70K a year. Looking at household income in that US, looks like put me at top 30% or so household income in the US. Yet it seems like everyone I come across is outspending me. It sometimes does make feel a bit poor since I don't the money to buy all these things.
For example, at malls I visit people seem to buys tons of items while I usually window shop or get 1-2 items. At Wal-mart, people checkout with carts full of goods, and spend like $25 usually. Not mention, I know a lot of people my age working at retail store yet they can buy latest smart phones, LCD TV, brand name clothes, and not mention nice loaded cars.
I don't consider myself very frugal, I spend most of my take home income due to various expenses. Most of my expenses goes to things like car, housing, basic utilities, and paying off debt. And yes, I sometimes even have negative budget (spend more than income) in a month. Now I don't have any credit card debt, and always spend money if I have cash to pay for it. Wonder if that is the difference? I really do wonder where people managed to find so much of money to spend? Or maybe I am just around people who have more money than me?
Ah, the magic of credit. Being in debt (obviously) reduces your purchasing power down the road.
But you sound like me. It really is a matter of perspective and in our general age bracket (late 20's and 30's), we are overly concerned with our status compared to those around us. We have some deep rooted psychological need to prove to the world that we don't suck, and to do that in America, you must be able spend copious amounts of money conspicuously.
But stop comparing yourself; 70K is a good salary for a 25 year old and you're totally 'da bomb...almost as good as me.
I think the real question should be WHY people who make 70K and above still struggle a bit. That's good money and I'm sure you work hard for it. It's a shame what this country is about nowadays. 70K and above should be more then enough to live comfortably. I guess it also depends on what part of the country your in.
What's ironice considering we live in an economy made up by 70% consumption is that most of you in this thread who are savers would have never made any of your money if the other people didn't spend beyond their means. That's the ****ed up thing about the American economy. My father in law is as frugal and as wealthy as they come. But without everyone else spending around him he'd have never accumulated the wealth from stocks and bonds etc. that he has. So yes it's great to save. But just remember if everyone saved no one would make any money. That's capitalism for ya!
I think the real question should be WHY people who make 70K and above still struggle a bit. That's good money and I'm sure you work hard for it. It's a shame what this country is about nowadays. 70K and above should be more then enough to live comfortably. I guess it also depends on what part of the country your in.
Don't overlook the multiple levels of taxation wage earners are subject to.
There is a recent study that said a family of 5 eligible and receiving all forms of assistance... Section 8 housing, School Lunch, discounted utilities, Medical Care, Tuition Assistance, etc... would need the equivalent of 70k in wages just to bread even.
A single wage earner making 70k typically pays a disproportionate amount in income when deductions and tax credits are not available.
$71,550 is the income cutoff to receive subsidized housing for a family of 5
I am a 25 year old single guy who earns about 70K a year. Looking at household income in that US, looks like put me at top 30% or so household income in the US. Yet it seems like everyone I come across is outspending me. It sometimes does make feel a bit poor since I don't the money to buy all these things.
For example, at malls I visit people seem to buys tons of items while I usually window shop or get 1-2 items. At Wal-mart, people checkout with carts full of goods, and spend like $25 usually. Not mention, I know a lot of people my age working at retail store yet they can buy latest smart phones, LCD TV, brand name clothes, and not mention nice loaded cars.
I don't consider myself very frugal, I spend most of my take home income due to various expenses. Most of my expenses goes to things like car, housing, basic utilities, and paying off debt. And yes, I sometimes even have negative budget (spend more than income) in a month. Now I don't have any credit card debt, and always spend money if I have cash to pay for it. Wonder if that is the difference? I really do wonder where people managed to find so much of money to spend? Or maybe I am just around people who have more money than me?
$25 Wal-Mart purchases are trivial expenses compared to cars and housing. For example, a modern one-bedroom apartment suite in my area can cost about $1,500 per month. An average suite (the apartment is 30-40 years old, close to noisy areas) can cost around $800 per month.
That's a $700 difference per month. That's about $8,400 per year. That's about a $12,000 pre-tax difference in income (obviously depends on tax and other differences).
Also, some of the items that you've mentioned aren't even that expensive. Most things are around 30% cheaper than the MSRP if you buy them on sale (even more for clothing and electronics). A new phone is around $200. Brand name clothing (if you are talking about AE, rather than Armani) are probably only $10 more expensive than the regular ones. Suppose their housing costs $100 less than your housing. That's $1,200 per year saved. That the equivalent of a PS3, new phone, a few $100 clothing, a half of a LCD TV.
$25 Wal-Mart purchases are trivial expenses compared to cars and housing. For example, a modern one-bedroom apartment suite in my area can cost about $1,500 per month. An average suite (the apartment is 30-40 years old, close to noisy areas) can cost around $800 per month.
That's a $700 difference per month. That's about $8,400 per year. That's about a $12,000 pre-tax difference in income (obviously depends on tax and other differences).
Also, some of the items that you've mentioned aren't even that expensive. Most things are around 30% cheaper than the MSRP if you buy them on sale (even more for clothing and electronics). A new phone is around $200. Brand name clothing (if you are talking about AE, rather than Armani) are probably only $10 more expensive than the regular ones. Suppose their housing costs $100 less than your housing. That's $1,200 per year saved. That the equivalent of a PS3, new phone, a few $100 clothing, a half of a LCD TV.
Not like there is lack of expensive housing / apartments even here in DFW. Some young professional apartments have rates up to $2,000 a month! There many people buying up expensive home in suburbs (including young unmarried people) with mortgage payments over $2K.
Of course, it just come some people are living in cheap apartment and are spending the money on other things. But I somehow do doubt that.
Ah, the magic of credit. Being in debt (obviously) reduces your purchasing power down the road.
But you sound like me. It really is a matter of perspective and in our general age bracket (late 20's and 30's), we are overly concerned with our status compared to those around us. We have some deep rooted psychological need to prove to the world that we don't suck, and to do that in America, you must be able spend copious amounts of money conspicuously.
But stop comparing yourself; 70K is a good salary for a 25 year old and you're totally 'da bomb...almost as good as me.
Yes, it really is the culture. I do hang around with most middle class and upper middle class people. They are used a lifestyle of buying things and showing off the shiny new BMW or even new house. It has rubbed on me a lot (aka why bought my house).
Now, I could have lived a super frugal life and save a TONS of money. But I am already see all my family, friends, coworkers, and even bosses thinking I am cheap! Of course, I swear other people will think you are poor guys who just doesn't make enough.
BTW, I am striving for saving money path. Hopefully, starting next year I will save $1K take home income each month if my budget plan works.
I remember 10 years ago seeing all these huge McMansions being built all over the place and selling for millions... My SO and I had lucrative careers and no kids and I just kept thinking - How can so many people afford such extravagant houses? I was really perplexed that people in lower paying careers could afford such grand houses. Well, I guess we now all know the answer to that.
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The general public have to realize, most of these cops and firefighters are going to make the big bucks and, there is a good chance, will go out on disability(around 50ish) with a very very generous pension with medical.
There many people buying up expensive home in suburbs (including young unmarried people) with mortgage payments over $2K.
