Got a pension? What is it in comparison to your last paycheck? (best, wife)
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Very wrong my friend very wrong. Much of our pensions are the result of ROI from employer/employee contributions over the years. State and local governments do not save and invest a portion of tax payer dollars each year. Were it not for pensions that investment would not be occuring and it is NOT the property of tax payers but the trust fund that invested the money.
Do some research on the investment habits of various public pensions and compare that to the typical 401K portfolio. Are they investing the same amount of money in investments that serve the public good? If not what would be the impact on the public good without those investments?
In some states the pension funds are part of the general fund and can be taken. In my state they are separate and cannot be taken without breaking the constitution of the state. I know this because the attorney general of my state who later become Governor(a college classmate who I knew) tried to take the funds. And while the state government can scream all they want, the reality is that in my state, they have to by the constitution, cut all other payments to pay the pension to existing pensioners. Not those who haven't taken the pension---they are always at risk.
But for a teacher required to place 11% of their pay into the pension accumulating an additional significant sum in additional retirement accounts would be difficult. Not impossible but difficult. It would clearly impact other investments.
In NJ, perhaps at first if at all. If you start out with the investment plan and accept a lower net income as your 403B is pre tax you have build a floor for future spending. If you try to convert over later not as easy but their are many who do it. For many especially those who are professionals their beginning salary minus pension and 403B contributions are still more than many make. Perhaps not living well but living frugal out of the gate and then adding and building on their spendable income as they get salary schedule pay increases and perhaps promotions. Just look around Jersey at the many older public employees who have nice houses. They didn't start out with them but worked their way up to them over the years. The same with investing.
OF COURSE, when you have a big pension fund, you also have the best managers in the world, diversifying so that they are getting 8% on their money. You'd have to work pretty hard to do that.
But there are managed groups that get that, you just have to look at the track records of the managers. If you are doing it yourself, you have to pay attention.
And when you get close to retirement you need to start taking fund out of the market so that you don't get creamed in a stock collapse. This is something many of my friends who had big nest eggs didn't do in 2005-2008 when Greenspan was complaining about "irrational exuberance" in the market. My friends bought the hype that the market never collapses, but every 20 years or so it does exactly that. And they are not now retired, they are still working.
Don't be so sure pension funds have had the best money managers in the world. Hedge funds have been losing money of late and yet they still get their fees. Also don't assume that contracts to manage funds are given out based on competency and not relationships.
Gov. Chris Christie's administration openly acknowledged that more New Jersey taxpayer dollars were going to land in the coffers of major financial institutions. It was 2010, and Christie had just installed a longtime private equity executive, Robert Grady, to manage the state's pension money. Grady promoted a plan to put more of those funds into riskier investments managed by Wall Street firms. Though this would entail higher fees, Grady said the strategy would "maximize returns while appropriately managing risk."
Four years later, New Jersey has secured only half the promised results. The state has sent more pension money to big-name Wall Street firms like Blackstone, Third Point, Omega Advisors, Elliott Associates and Grady's old firm, The Carlyle Group. Additionally, the amount of fees the state pays financial managers has more than tripled since Christie assumed office. New Jersey is now one of America’s largest investors in hedge funds.
I get that the pensions aren't as lavish as some people imagine. But living on, say, 30K a year in New Mexico is pretty doable. And practically no one in the private sector making 30k to 40k is getting a pension at all...Heck, a lot of those folks don't even have 401ks.
That is the real problem with our retirement system. The better paid half of the work force gets some kind of retirement benefit/savings plan at work and the lower half paid doesn't. 401ks haven't fixed that core problem.
The private sector has been whining all along that people do not deserve benefits - health insurance, matching on 401Ks, pension benefits - and even Social Security and Medicare for that matter - for decades.
I am a firm believer that the only reason my government pension stays intact - is because the legislators who rule on it are benefactors of it as well. If it goes down - so do they. Funny how that works.
Higher pay and benefits - including but not limited to the minimum wage - raises all of us to livelihoods we can actually afford. And in many instances - it's shown NOT to affect the bottomline of those private sector companies. Look at the wage disparity between CEOs and the average worker. It's clear there's an imbalance.
While the private sector was axing pensions - pension envy was boiling..... setting up the divide.
The private sector needs to understand that people will not work for nothing.
The poster I was responding to made the claim that civil service workers get paid less than their private sector counterparts. You didn't ask HIM for a link? Double standard much?
Not a double standard at all I was familiar with and had read studies supporting his claim but not yours. What you are saying is that if a poster claims that the earth is flat and another claims it's not then in order for me to be 'fair' I have to ask both of them to prove their case even though I have been aware that the earth is not flat since I was 4 years old and fully understand the science supporting that position.
The private sector has been whining all along that people do not deserve benefits - health insurance, matching on 401Ks, pension benefits - and even Social Security and Medicare for that matter - for decades. I am a firm believer that the only reason my government pension stays intact - is because the legislators who rule on it are benefactors of it as well. If it goes down - so do they. Funny how that works.Higher pay and benefits - including but not limited to the minimum wage - raises all of us to livelihoods we can actually afford. And in many instances - it's shown NOT to affect the bottomline of those private sector companies. Look at the wage disparity between CEOs and the average worker. It's clear there's an imbalance. While the private sector was axing pensions - pension envy was boiling..... setting up the divide. The private sector needs to understand that people will not work for nothing.
You are absolutely right and I'm hoping that Winco, an employee owned grocery chain that regularly beats Walmart prices is going to shake up other employers and force them to look at their greed.
You are absolutely right and I'm hoping that Winco, an employee owned grocery chain that regularly beats Walmart prices is going to shake up other employers and force them to look at their greed.
Exactly - that's how you get good employees with low turnover. If they can afford to do it then that says a lot about how much greater profits companies like Walmart are getting, at the cost of their employees. Pensions can serve a very valuable purpose but the funds have to be handled responsibly.
I'm currently battling to find out - from Social Security - how much my benefit will be. I work for a government entity that "opted out" in the 1980s. Thankfully, I had my 40 credits and have been able to save over the years.
This decision - to opt out - was made by people making high five and six figures. Who most likely would never need Social Security.
I have many coworkers who have NEVER worked for a place that paid into Social Security. Their paychecks are so low - they may never retire because they cannot save.
When asking Social Security how much my actual benefit will be - I get "it's just a guess" you'll get 50%
It should not be a guessing game.
If I can figure out what my portfolio will give me - I should be able to do the same with my Social Security.
Good for Winco.
I'm currently battling to find out - from Social Security - how much my benefit will be. I work for a government entity that "opted out" in the 1980s. Thankfully, I had my 40 credits and have been able to save over the years.
This decision - to opt out - was made by people making high five and six figures. Who most likely would never need Social Security.
I have many coworkers who have NEVER worked for a place that paid into Social Security. Their paychecks are so low - they may never retire because they cannot save.
When asking Social Security how much my actual benefit will be - I get "it's just a guess" you'll get 50%
It should not be a guessing game.
If I can figure out what my portfolio will give me - I should be able to do the same with my Social Security.
Before I retired I got a statement from SS every year giving my outlook for pension benefits at various retirement age. I'm guessing that they don't still send those out? Even so, you can get it online: https://www.ssa.gov/retire/estimator.html
The less you made in wages, the larger percentage in SS benefits you will receive, here's a chart: https://www.nasi.org/learn/socialsec...mpare-earnings
The role of pensions and benefits in the public sector are a mixed bag. When it comes to skilled workers especially those in demand the benefits of public service are financially at a disadvantge. When it comes to lower skill workers the public sector may have the advantage. I was listening to a discussion the other day on CNBC and the question was why are banks and other financial institutions more successful at cyber security than government and many companies? Because they pay their tech people better and have little restraint. They can hire a former high skilled hacker and pay them a million a year with someone looking over their shoulder. Government can't and many companies won't. Private sector techies with security clearance can make more working with the big companies as contractors than they can with the federal or state government. They also have greater job mobility and can move up a career ladder more freely. That is something that often gets missed in these discussions the often lack of mobility in the public sector.
Thus for skilled quality workers public sector benefits become a major recruitment and retention tool.
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