With fewer retirees having pensions, it begs the question: how much of a difference does a pension make in retirement?
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The Pension Gamble – FRONTLINE
Timestamps
0:00 – Do pensions make a difference in retirement?
1:03 – Pension data for the U.S.
1:44 – Our assumptions
3:01 – Current retirement savings
3:28 – Total savings needed for retirement
5:00 – How much do they need to save?
6:51 – Having a pension can make a difference
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I must be a tightwad I enjoy myself with my wife for less than 1700 a month all in health insurance and all.
thank ful i have a pension
I started my 401K at 23 in 1985 and retired early @55 in 2016 with a full pension and $650,000. in my rollover IRA and with DJT in office it turned into 1.2M and then Bone head took over and it closed this past week at $970K. I did start distributions @59.6. and will take SSI at 62 in 2023. My pension is $55K a year with Medical and dental and I am taking $3K a month distribution. I worked 32 years for SWX and heard the company has changed the pension plan for new hires.
Government pensions have a cost of living advantage at least mine do. Mine is a federal pension not state.
here, I'll help you out — I can tell you're reading — now stop that
From across the pond I look on in wonder as to how generous social security is in the US for retirees – I would have thought many people would be able to retire on that alone ?
It's my third month being retired now. And life hasn't been so difficult as I thought basically because I put my head down and made ways for other source of Income. I'm a huge fan of earning more money, and I think everyone should have a side hustle. Side hustling can allow you to earn that little bit of extra money that can help you achieve your financial goals faster – whether it's paying off student loans or saving for retirement.
Actually the only solution is to move to California-Police officer Pete with 30 years retired from CALPERS will make anywhere annual 100k to 130kfor life-(unless there is an earthquake-the movie industry shuts down-Disneyland closes)-get a CALSTRS or CALPERS in any job or encourage your kids now-other states are good as well however California is #5 GNP so it is much safer
Retired active duty military for 23 years. $32,604.00 a year before taxes in retirement pay.
From that I have allotments that pay for my Medical Insurance, Delta Dental, Vision, an annuity for my wife called "Survivor Benefit Plan" where she would get 55% on my retirement if I die, life insurance "Veteran's Group Life Insurance", and I get COLA increases for inflation. I make $2034.00 a month after all that.
I get all this because I joined in 1981 and retired in 2005. People joining now days don't get the same deal.
It is "Retirement Pay" as far as the government is concerned. NOT a "pension".
If you have a pension you do not receive all of your Social Security benefits in full
you only get a fraction of the benefits
Wife and I are 61 and 59 years old. Still working for another 9 months. Already collecting a $2K pension plus I will start SS in 2 months which will be another $2K. $750K in 401K's / IRA's. Mortgage and 3 cars paid off. I'm blue collar, wife is white collar. No college degrees. In fact, we'd probably be in far worse shape if we had college debt hanging over our heads.
USAF (28 years AD/Reserve), been paying into an IRA for 40+ years/401 K account.. Pay off the house/car/any other big expense before retirement (any other suggestions regarding "big" expenses?) As much as you can, make all accounts "Roth" (Note: I retired before TSA took off for the military, can you make them "Roth"?) Spend "AFTER" you pay yourselves (IRAs, 401-Ks, investments). I afraid that, as with the college debt payment problem, there will be, in 20-30 years, two Americas. One which saved/invested/sacrificed and one which didn't. And, this will be a problem that will be played with some sort of "government solution".
A person with no more than a high school education can easily retire comfortably at age 62 with three reliable sources of income by doing the following:
Graduate high school and join the military. Serve 20 years in the military and retire with a lifetime pension.
As soon as possible after retiring from the military, find employment at a city, town, county, or state, and retire at age 62 with another lifetime pension.
Start receiving Social Security benefits at age 62.
The rest of this person’s life he/she will have three sources of income – military pension, government pension, and Social Security.
If this person serves in the military as an officer, all three of these sources of income are likely to be significantly greater.
It may be too late for you to benefit from this strategy, but perhaps you know a young person who could benefit from it. If so, please share this idea with him/her.
Thx for sharing. I’m fortunate enough to have a pension in the private sector. I’m 22 yrs into a 32 yr pension program at 44 yrs old. Everyday I’m thankful for this. If there are any young people reading this, please try to pay attention to retirement benefits at work. It may not matter to you now, but one day you’ll wake up and realize you’re half way there. Good luck to everyone in retirement
Your assumption of receiving $1000 per month in pension funds is not realistic. Most government employees work for 30+ years and receive
60% – 80% of their working salaries depending on when they retire. I know some that make 100% of their salaries. They are also offered 401(k)s as well.
Now run the figures with average Andy having average retirement savings portfolio of $250k by retirement age instead of $800k then you see that Average Andy has to cut his outgoings quite considerably at retirement age. Everyone knows that don’t they?
Except pension Pete made more, because his pension income wasn’t incorporated into his whole compensation package.
Andy’s income should have compensated for that.
The fact is that pension plans require to stay at a single company, have the potential for being taken away. People who move companies typically make more.
So I’d much rather work for a company that offers a 401k.
Andy and Pete will probably also have a mortgage free house or condo. The value of these assets should be added to their retirement account.
I consider my self blessed did 20 years in the Military and getting ready to wrap up my GS career. Despite having a solid pension plan. I lived frugally and maxed out my contributions into my IRA and TSP. Just cashed out some to payoff the mortgage. Will retire in 5 months debt free. I do not regret one bit, not buying the fancy car or newest and greatest gadget. Sacrifice up front will help set you up a more secure future. I hope these young people realize you do not need an $1800 phone that only last a few years or gulp down $7 Lattes.
I stopped working 15 years ago and became a full-time trader and never regretted it. I make a 6 figures profit each year and will always live a good life as long as I can trade.
I’ll be leaving the US once my working years come to an end. I won’t have a pension and life is just way too expensive now and I can’t imagine how hard it will be in 20 years when it’s time to retire.
What about my military pension.
Retried with a 7 figure portfolio and receiving about $243k in dividends. I have been in the stock market about 20 years. Am I worried? Am I selling? Absolutely not. I have purchase growth stocks too a little at a time over the past few weeks. I am going to sit back and observe how this all plays out, adding more at a time. my investment strategy with my FA actually calms me down. Eye on the prize, stay the course!
That pension assumption is crazy low in pension size and high age at retirement. You have him in a police uniform .. most cops work in large/urban departments with pensions greater than 50% of their salary. Mine personally will pay out 70% for a total of $60k/yr starting at 56 .. the principle needed to pay that annuity is well over $1million. Also, many pensions also get COLA increases. And I’m grateful to have a small, private and overfunded plan.
This reminds me of the buy/rent debate. If you invest all the gross savings from renting, it’s a good option. But no one does. And the private sector people aren’t holding $1.5 million for their retirement either. So, yeah, I’ll take my pension, thank you very much.
Retirement is wonderful if you have two essentials — much to live on and much to live for. Invest wisely and get good returns.
Well when you reach full retirement the less money you will have to spend. That is house should be payed off credit card debt payed off and car payed off that’s my way of thinking
In three letters…YES!
Even the DoD has switched to a 401k-style retirement plan. Glad I have my pension and didn't get roped into that option!
55 yrs old with two pensions- 9k after taxes each month.
I have a Civil Service retirement pension and a Union pension for a total of $4,000 a month for life with cola's. How much would a person need in a 401K to get that same amount? Anybody know?
KIDS KILL YOUR RETIREMENT GOALS. Someone needs to do a YT about retirement plans when your raising KIDS. My "risk" tolerance in much lower AND Im investing for them too. Plus the budget is WAY off, toys-cloths-foods-usless kids stuff-diapers etc etc etc etc. I love reading comments about how much wealth the married couple with NO Kids have. Believe me its WAY easier. Show me how to do it with Kids, now thats a real challenge.
Building trade union pensions are usually close to 100% of annual work income. Add social security and Roth/IRA investments and retirement looks pretty good.
So, what you are saying is that because Andy has to pay for Pete's pension he cannot fund his own in an adequate manner.
I’m a nurse and have never been offered a pension at any place I’ve worked.
When someone participates in a pension plan they have pension contributions deducted from their monthly pay. The opening comparison shows Andy and Pete having the same spending available each month. The missing element in the comparison is the deduction of the pension contributions from Pete's pay.