Got a pension? What is it in comparison to your last paycheck? (55, pension plan)
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My wife teaches at a private school. She has been there for 30 years. When she retires next year her pension will be $800 a month. This is about 30% of her last salary amount. Is this common? Typical?
If you are getting a pension, how much is it in comparison to your previous earnings?
My wife teaches at a private school. She has been there for 30 years. When she retires next year her pension will be $800 a month. This is about 30% of her last salary amount. Is this common? Typical?
If you are getting a pension, how much is it in comparison to your previous earnings?
Depends on the pension plan. Typical for some and not for others. The real comparison is not gross amount but net amounts which might be a heck of a lot closer.
Most companies have a pension plan that has set pensions at a percentage of your final salary based on a prescribed formula. It can be different for each employer. Many government employers use a formula like "2%@60", meaning that, at age 60 you would get 2% of your final salary at retirement, times the number of years you worked there. If you retire before that age, you would get a reduced percentage, say 1.75 %@ age 59 times the number of years. So it's dependent upon 3 variables 1) your age at retirement, 2) your final salary, 3) number of years you had there.
For example, say our formula was 2%@ 55. So if I retired at age 55 and I was making $100k per year then we multiply 2% times my salary and arrive at $2k. Then we multiply that number times the number of years I worked there, 24 years, so that would be $48k annually.
Was your wife unaware of the retirement formula of her school? You sound surprised at the amount.
I worked less than seven years at a public sector job and my monthly pension, after taxes, is more than 50 percent of my final year take home pay. And it's way more than $800 a month. Between that and my National Guard pension, I take home more in retirement than I did while I was still working.
I worked less than seven years at a public sector job and my monthly pension, after taxes, is more than 50 percent of my final year take home pay. And it's way more than $800 a month. Between that and my National Guard pension, I take home more in retirement than I did while I was still working.
This is highly unusual for a public sector job to be that high of a percentage for so few years unless you had a safety job like firefighter or police. Or unless you were allowed to buy extra years through a program giving you credit for your years in the NG. Or both.
OP, I realize that I didn't actually answer your question. I worked for my employer for 24 years and I retired at 51 with 38% of my salary.
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With my pension and my wife's, along with social security when we retire in 4-5 years, our total income is expected to be a little more than our current take home. That's because we currently have two car payments that will be paid off, and substantial amounts going into 401k and a health savings account to save on taxes and build a retirement buffer. All of this is coming out of my check automatically as payroll deductions, so we live on the remainder plus my wife's (school) pay. Looking only at my pension as a percentage of current pay, it's very little, maybe 1/5th due to only being here 7 years.
I worked less than seven years at a public sector job and my monthly pension, after taxes, is more than 50 percent of my final year take home pay. And it's way more than $800 a month. Between that and my National Guard pension, I take home more in retirement than I did while I was still working.
What is the "rest" of your story. I worked in public sector administration and there is no formula anywhere in the United States that where you can earn more than 50% of your final salary regardless of the age at which you retired. You are saying your is "over" 50% for seven years of service. That's a formula that would be a minimum of "over" 7% for each year of service. There is more to your story than you are telling us or it just isn't accurate.
My wife teaches at a private school. She has been there for 30 years. When she retires next year her pension will be $800 a month. This is about 30% of her last salary amount. Is this common? Typical?
If you are getting a pension, how much is it in comparison to your previous earnings?
Private pensions are generally much less than he more lucrative public pension plans. Applying your formula to he public agency I retired from, I would receive 78% of the average monthly salary of my final two years. Of course, I contributed a variable percentage of my paycheck each month also...roughly 7% on average.
Public servant here.
At 58 with 22 years of service 44% of base salary.
If I stayed the full 30 years it would be 60%.
File under "Yet another straw (or bale of hay) of the tax burden/deficit being piled on the back of the working public".
That's ridiculous.
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