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That's why I just had to eyeroll the past 10 years when the internet was laughing at and lecturing the old fogies how stupid it was to stay at one company.
Look who's laughing now.
My sister and brother both retired from SBC - what a sweet deal that was. Think it is different now.
I remember my sister complaining about the 11 dollars she had to pay for her health insurance. Heck I pay 22 for my military health insurance. They also reimburse her Medicare that gets taken out of her SS.
I paid into my own retirement fund. An average of about 24% of my income for 30 years. My neighbor who is a retired firefighter and only paid in 3% is receiving more monthly than I pay myself and will continue to receive it as long as he lives. My retirement plan will run out of money after only 10 years. I made a good return on my investments over the 30 years and earned about double what my neighbor earned. My neighbors father is also a retired firefighter. he has been retired for 30 years now and still is receiving a pension. He told me one day that he has made more being retired then he ever earned working.
And that's why state governments are broke. There's something seriously wrong when a tax supported worker gets more in retirement than when working. (And I love fireman and police everyone so no bashing.)
I'm a boomer like many of you here. It seems to me if your career was non corporate--education, government worker , utility company, jobs with trade union--you are likely getting a nice pension. Many of those jobs you didn't even need a degree. Those who were in the corporate world, many with advanced degrees, were given traditional 401K plan and no pension. None of my companies offered a Roth 401K either, not that I would have qualified. In retrospect, many who did not get degrees still came out of it quite successfully. We are probably the last generation where you could get by without a degree.
Maybe you are like me and had a corp job for a time in the 80s or 90s that paid a pension, and now that you are at or near retirement you will get a small pension amount for the 5-10 years you had this job. In my case I will get $465/month at age 65. I can't help but wonder now if I should have had stayed longer with this company. It paid excellent wages plus the pension was free...it may have been considered part of the benefit package but there was no decrease in salary to compensate.
Each person has to do their own calculus, but I've noticed over the years that in smaller towns, rural areas, during recessions, etc. - places and times where the economy is likely to be weak, desirability of government employment goes up.
I live in a metro with a bad economy. With a bad economy, private sector employers can keep paying lower and lower until the market finds some new bottom. Oftentimes, government has a minimum pay level that the pay cannot go below, and that minimum pay level is often hiring than the private sector bottom and the local minimum wage. Below is what a local analyst had to say about our market recently.
Spoiler
At the same time, Kingsport-Bristol is experiencing a steep decline. The primary drivers are wage stagnation, underemployment and a rapidly aging labor force adding to an already waning lower labor participation force.
Government employment serves as a way for those workers in rural areas and with bad economies to remain in those areas (when they otherwise wouldn't find a fit) at some semblance of a middle class wage.
In healthier economies and in higher paying fields, that equation may change. When I lived in Iowa, teacher pay was not much more than here, but with a much healthier private sector, people felt more willing to take risks instead of trying to hunker down in government employment.
And that's why state governments are broke. There's something seriously wrong when a tax supported worker gets more in retirement than when working. (And I love fireman and police everyone so no bashing.)
Quite often that tax supported worker was paid less over their career and is getting an average or slightly better pension which was an incentive to stay in public service jobs. Being a probation officer, prison guard, mental health worker or a welfare caseworker is not a barrel of laughs or an easy ticket to wealth as some claim. When I started in a state job, that required a college degree, I was paid $448 a month and recall when I got a major raise to $512. Pension and taxes and medical came out of that. They finally reworked the pension system so we didn't have to contribute out of our check for our pension but it was a 'benefit' deal...still accompanied by low wages with miniscule COL raises or no raises, depending on the legislature. I recall getting a promotion, long after I had already been in a supervisory and management position, to a more senior position and had to practically arm wrestle the administration to get $20k per year. If states are going broke they aren't paying attention to what their obligations are and planning to pay what they owe. My guess it's more related to increased medical/health insurance costs...which impacts public and private sectors and private individuals.
FYI, my husband's "pension" will not be enough to live on. And yes, he contributed to it out of his earnings. He has not contributed a significant amount to Social Security and won't get much there.
FYI, my husband's "pension" will not be enough to live on. And yes, he contributed to it out of his earnings. He has not contributed a significant amount to Social Security and won't get much there.
Easy street, indeed.
I am sure everything you said is accurate, but what is unsaid is how many years your husband worked for the employer to get that pension. One possible reason for low pension amounts is that the employee may have had another career before starting the job with the pension.
Current employer has no pension but a very nice 401(k) plan.
Previous employer had both a pension and a 401(k) plan. Pension had both an Employer Funded part (called Part A) and an optional Employee Funded part (called naturally enough Part B). When I left after 30 years of contributing to the optional Part B, I learned it also had a small Employer Match to the Employee contributions. Although in truth, when I left they had eliminated the Pension Plan as a true pension (with all the governmental protections) and replaced it with an Annuity Plan which was individually funded from each employees' personal Part A and Part B balances. This was the third radical change to the Pension Plan and Pension Benefits in about 4 years time.
I took the new Lump Sum option when I left, feeling I had already endured enough forced changes and had no remaining confidence in their concerns with my financial security as a retiree.
No free or low cost Health Insurance in Retirement. I can buy into the active employee plan by paying twice as much out of pocket as active employees pay, but for less coverage.
No free or low cost life insurance after retirement. They saved $75/year taking that away from me! I can buy into the active employees optional life insurance coverage but my out of pocket premium will be significantly greater than the company's $75 savings.
The Health Insurance deletion was part of the recent changes right before I left, and also impacted those who had already entered retirement - regardless of how many years they had been a retiree. The Life Insurance deletion happened after I was a retiree. The company send my my Insurance Invoice in the same letter that informed me they would no longer pay for coverage.
And they are making over 10 Billion Dollars each year in profits so the changes were not due to their financial hardship; only their greed.
Having been part of Tier 4 of the NYS system, I contributed for the first 10 years of my 25 year career. Not sure what the percentage was, as I was a care-free 21 year old when I started, that didn't pay attention to financial details. Not sure about Tier 5, but as of Tier 6, they are definitely contributing for their entire careers.
Having been part of Tier 4 of the NYS system, I contributed for the first 10 years of my 25 year career. Not sure what the percentage was, as I was a care-free 21 year old when I started, that didn't pay attention to financial details. Not sure about Tier 5, but as of Tier 6, they are definitely contributing for their entire careers.
I am Tier 3 in NYS. Also paid in for 10 years. Worked 37.
NY's pension through most of the tiers is substantially better than NJ's and because most years they made the contribution the funding is much better.
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