does the government pay %50 of your salary when u retire? (pension, move)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The military is changing over to a new method of calcuating it. Under their new system no body will get a dime before they are 50.
I retired after 20 years in the Navy, and I am getting 50% of my base-pay [as averaged from my last 3 years on Active duty]. Base-pay is about a third of my Active Duty take home pay. So my pension is closer to 1/6 of what my Active Duty take home pay was.
I know they were talking about this but has it been passed? Anyt links you have about this?
I'm beginning to think that, for most people, gov't pensions can't be beat, vs. working in the private sector. For example if you're getting a $40K annual pension, that's equivalent to having a 2% CD on $2 million in savings, guaranteed by law for life. I would think if someone making $100K annually in the private sector saved every penny above what the gov't would pay (for a teacher, say), they may still fall short of the gov't deal, assuming CD rates stay low.
Anyone with a pension have thoughts on that? Are pensions taxed?
Anyone with a pension have thoughts on that? Are pensions taxed?
The short answer is, it depends.
Federal tax - yes, as far as I know, any pension (fed, state, or local gov't as well as private industry) is subject to federal taxation. But there are all kinds of special situations. For example, when a federal employee retires, and gets a certain amount of money each year, there is a tax-free portion of this amount.
Retirement information from the Office of Personnel Management
State tax - very complicated. In most states, most pensions of any kind are subject to some level of state taxation. BUT, there are many, many exceptions .... states that don't have a state income tax for anyone, states that do not tax federal (and/or state, and/or local government) pensions, states that tax only part of a pension, and so on. It really depends on the state and the specific type of pension.
My wife and I both retired from the federal government under the Civil Service Retirement System (CSRS). I retired at age 55 with 35 years of federal service ... my pension is 66% of my "high-three" - the highest salary I received over three consecutive years (usually the last three years of employment).
My wife retired at age 55 with 30 years of federal service ... her pension is 56% of her "high-three."
I'm beginning to think that, for most people, gov't pensions can't be beat, vs. working in the private sector. For example if you're getting a $40K annual pension, that's equivalent to having a 2% CD on $2 million in savings, guaranteed by law for life. I would think if someone making $100K annually in the private sector saved every penny above what the gov't would pay (for a teacher, say), they may still fall short of the gov't deal, assuming CD rates stay low.
Anyone with a pension have thoughts on that? Are pensions taxed?
Hi
I have a Fed pension. It is 'taxed' though I pay no taxes. My pension is below the minimum cut-off for paying income taxes; both Federal and state [at least for the state where I retired to].
During my career we invested a great deal, with tax-planning and forethought; so that most of our portfolio is also tax-sheltered.
Today I have my pension [tax-free]; our investments income [tax-free], we retired onto a farm where our road side stand's revenue and most of my Dw's part-time job income remains tax-free.
She wanted her own career after I retired. As she climbs the corporate ladder however her income increases. So her income and our farm income combined is putting us into the position of being taxable.
I'm beginning to think that, for most people, gov't pensions can't be beat, vs. working in the private sector. For example if you're getting a $40K annual pension, that's equivalent to having a 2% CD on $2 million in savings, guaranteed by law for life. I would think if someone making $100K annually in the private sector saved every penny above what the gov't would pay (for a teacher, say), they may still fall short of the gov't deal, assuming CD rates stay low.
Anyone with a pension have thoughts on that? Are pensions taxed?
Pensions are taxed here in Minnesota. SS is taxed which I think is ridiculous.
Thanks y'all for the info above. So, the gov't pensions are taxed by the feds, but like any income you can be in a low (or no) tax bracket, and you can live in a state with no income tax.
Seems like the typical gov't job ($60K say) pays the equivalent of about $120K (with no pension), if CD rates are 2% or so. I don't see how that can last (it should break the gov't eventually), but for now it seems like a very good deal.
Most of these in munciplal and country retirement systems are state wide. They have no direct connection to the government but are regualted by state law. Once a person is retired the money is in their account with maybe the local government paying COL additions.There is no other money that the local government has to pay; it all comes from the retirement plan and is fully funded . Most retirements are based on a very conservative return over a long period and any extra is paid out at the end of the year in extra checks.That is basically how the Texas Municipal retirement system is setup.It is a very conservative retirement system.So if you are retired your account is set at a guaranteed annuity for the option you choose and fully funded for that amount.In contrast to many private accounts that are run by teh company and rearely ever fuly funded. If GM had this for example they would not be paying for past retirees out of earnings;the fund would have been already funded for the gauranteed amount when the person retired consisting of waht teh employeee has been paying and what the governamtn matches at retirement. Governamnt escrows their portion which pays for alot of the cost while the person works.This use to be quite common in private business and often the retiremnt escrow accounts became worth more than the business.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
