I am truly very fortunate and blessed. I have a military pension, a federal civil service pension, veterans disability, Social Security, a Roth IRA (along with one for my wife), and a Thrift Savings Plan.
I worked 26 years as a teamster, retired at 58 with about 50% pension. I have a modest 401k. I Started collecting SSI widow benefits this year at 60. I will collect my SS at 70. Retirement is great.
Pro Union as here too. County Government for 26.5 years. I'm 59. Plan to retire @ 63 with 72.54% of final compensation. defined benefit. One thing I didn't do is start early with the 457b Deferred Comp. But, I still plan to take SS @ 70.
Thank God my dad was Union. My mom lived 20 years after his death and got his pension and health care the entire time. I never would have been able to take care of her. Companies that go out of business should not be able to spend one dime of the employees pension fund and it should be law that any company that buys another should honor it as part of the purchase. This vulture capitalism is destroying the country.
Wrong. That "vulture capitalism" is one of the reasons that the US economy is far stronger and more vibrant than any other in the world, especially in comparison to similar western european countries. The US was built on the idea of self-reliance, NOT a highly regulated nanny state. Those items are mutually exclusive as the nanny state with high regulations imposes burdens on businesses AND workers that limits both, thus making it harder for either to excel. Self-reliance means being responsible for yourself, including spending less than you make and saving for your own retirement.
@@gtb5216 What in the world are you even talking about? There is no flaw in my argument whatsoever. Saving for your OWN retirement means not relying on a company to do it for like in a pension, but saving in a 401k, IRA, or any number of self-directed savings and investment vehicles. These are portable and allow you to take them with you and free you to seek out better employment opportunities since you are not beholden to sticking to the same company in order to qualify for a pension that may not be there when you need it. The main crux of my argument though involved self-reliance and not being beholden to a nanny state and its regulations that limit growth and opportunity for business. It is business that creates jobs and wealth, NOT government. Government is a leach on productivity.
@@chriskasprzyk6235if a company offers a pension as part of their compensation the company owes it to them. If they don’t for whatever reason it’s just as if they didn’t pay them for work done. As far as 401Ks go it doesn’t appear to be very successful as a retirement plan. I suspect this is mostly because the companies don’t invest as much in them as they did pension funds. It’s also easy for an individual to make mistakes that they can’t recover from
Best decision I ever made in my life was to go back in the Army Reserves after a 15 year absence at age 41. People thought I was crazy, but I stayed in the Army Reserve until age 60 when I retired with a total of 25 years. My pension is 2,400 per month plus an extra 1,000 for disability. Both have COLA adjustments every year.
Yup, same here, National Guard and disability. Plus I worked as a Deputy in Florida (FRS-Pension) and am doing a short tour in Nevada as the IT guy for my library. NRS Pension. FRS and NRS are small, but I can afford the kind of dog food you add water to make gravy. Yummy!
It really depends on your goals. I personally would prefer the security of never running out of money (a pension) vs. gambling on the stock market to fund your retirement (401k).
I’m in my late 20s and will have a pension. I plan to do both stocks and rely on my pension. Saving as much as I can to hopefully retire in my early 50s.
@@LumiLunar same here. I’m a bit older than you, but will have social security, a small annuity and whatever I have in my 401k when the time comes to retire in a few years. We will likely also move to a less expensive, rural community somewhere.
@@agoogleuser9218 I live in a high cost area at the moment too. I do plan to at least move to a slightly less expensive area. I don’t know what the future holds but at the moment I don’t see myself leaving my state.
The best part of being a federal employee is the fact that you have three different retirement sources -- pension, SS, and the TSP (a 401k-like program). As someone who joined the federal ranks relatively late, I am more than willing to trade a little lower salary for the more comprehensive retirement package.
Agreed. I retired last week at 56 with 31 years of service and invested aggressively and maxed out my tsp for the past 20 years. I look forward to collecting a pension and relaxing.
@@Retired_Life_1 Same. As a Fed I maxed out my yearly TSP contributions staying fully invested for nearly my entire career. Had to forgo a few wants but it paid off big time by the time I retired at age 60.
@@Retired_Life_1 same. Joined the fed govt at 39 and putting every penny possible in my 401k. Even starting that late, I will be in decent shape. None of my siblings are. None of them will be able to retire.
I worked for GE many years ago, they had both a defined benefit plan and a 401k with matching. I was able to participate in both, and am looking forward to my small pension plus my 401k/IRA savings and social security to allow me to live out my retirement quite comfortably.
All the hype I heard about saving for retirement this one The Three legged Stool for retirement was a great concept. SS, pension and 401k was golden, but sadly no longer the case. Workers just didn't have any control of the pension portion. Layoffs, bankruptcies, pension reductions and etc made it impossible to rely on the pension leg.
Worked for a large transit system in a major city. Retired at 55 with a full pension. Also put 20% of my salary in a 457 plan. Retirement is great. Haven’t even touched 457 yet
NYS Teachers’ Retirement is one of the healthiest in the nation. I retire in June with a pension of around $100,000. Never thought about it when I started teaching, but now I’m financially secure and can enjoy my retirement without worrying about where the money comes from. I can’t wait!
Love the Michigan helmet! Took the small defined benefit plan as a lump sum, over a decade ago and rolled it into an IRA. Withdraw 3-4% for the past decade, and collected less than the 100% guarantee for me and my spouse for the first few years. Today I get more than the defined contribution for the two of us. And, we have grown the balance. Would do it again. Finally your point about pension plans being raided or companies going bankrupt hits home -- United Airlines comes to mind.
Good on ya, I too am AF retired in 2005 (27.5 yrs), and soon to be retired FERS at 65. So glad we have the mil retirement in addition to TSP and Soc Sec. I’m looking fwd to retirement. Enjoy yours! Cheers
Finally, some others in the same boat! I retired from the USAF back in Nov 2001, started with the US Forest Service in Jul 2002. I’m retiring very soon at 61. I’ll get a FERS stipend until I’m 62…then I’ll collect SS. Hope you all enjoy your retirement like I plan to!!! Thank you both for your service too!!!
Similar story for me. Retired from the USAF in 2008, 30 years, age 56. (I’m a health care provider, recruited at age 26.). Went right to work with Veterans Health Administration. Worked for 10 years, until I reached my full retirement age. Having the military pension, VA pension and TSP in addition to Social Security gives me complete financial security.
Retired Marine here. Served 30 years. I have no complaints. When I get the "thank you for your service" line, my reply is that the government thanks me on the 1st of every month!
Me too. The cherry on top is military and federal pensions have COLA increases. Many of the old corporate pensions don't increase over the years with a COLA type adjustment and inflation eats them up over the course of a retirement.
I did not have much retirement. At age 50 I started a state job. When I retire at 65 my pension will be worth $2200/month on top of our SS. That is amazing for 15 years vested. I had no idea.
I started my gov job at age 25. Kinda fucked that one up because my pension is full set to reach full retirement at 50. Had got the job at age 40 I would still get the same benefit at 50. But hey, it's still a great deal.
I worked in the retail clerks union and retired with 35 years in the industry. I received my defined pension at 58 that included a $75 month for health insurance until I hit 65. Its been great so far. Now at 68, I supplement my retirement with dividends through my investments and I have no debt. Im waiting until 70 to collect my max SS.
When you consider vesting, appreciate the fact that the public sector jobs are far more stable. Government agencies don’t lay off employees at the drop of a hat to raise their stock price. It’s far easier to have a sustained career in the public sector. Look at the thousands of people complaining online about have recently been displaced by their employer. None of them are public sector employees.
In the 80s and 90s local county jobs were looked down on. Low wages. Really old crumbling buildings and offices. No computers. Old vehicles with no air no radio. But. It was stable.
I’m 29 years deep into a municipal pension and hoping to retire in 5-7 years around 55-57 . That was the primary reason I stuck with this career because it certainly wasn’t the pay. To combat that pay differential, I have always had a side hustle that I use for investing and vacations for my family. Fully funding our Roth IRA’ and a now sizable brokerage acct using some of those monies to cover health insurance from 55-65 until medicare kicks in. The key to making this work is planning way in advance. Think about it early and often!
I always found that the night meetings with municipal work (at least in the planning office) made a side hustle time prohibitive. But, awesome idea if you can make it work!
@@jamesrather1510 I schedule the side hustle around evening meetings after hours activities. It helps if it’s flexible and I would argue a key metric to making it work.
21 years military service with a 6 year break in service (worked offshore in the oilfield - disaster when they started parking boats and rigs I got out) the Army was not my cup of tea so this time went into the US Coast and loved it. Went aviation and the 18 years flew by. After retiring from the USCG I backed into a state job doing maintenance in the school system and I blinked and 20 years went by. I will collect my SS at FRA of 66 and 10 months but I have backed into another job of driving disabled Veterans to medical appointments and totally love this position. Brand new company van I park at my residence and I get to interact with people every day that are glad and thankful I am there to pick them up. BTW I just turned 65 and loving it, I prepared for this season. When not driving the van I am putting 1,200 miles a year on my bicycle. Not one to stand still.
Just retired first of the year, with both pension and 401k, plus retiree medical benefits. I put 20% into my 401k each year, plus a company match, and will take the pension in a lump sum to be put into an IRA. I am very thankful to have all the benefits that we got, even though they are changing for new hires. My company was non union, but treated us very well. Retired after 31 years at age 60.
I feel very blessed to have a pension coming from the state of California. God willing I will retire in 24 months with a pension exceeding 90% of my highest salary at the age of 62.
@@shockwave1126No lump sum offered but pension is worth over a million. Single so nobody gets anything after I pass away! Be careful of the taxes if taking a lump sum.
@@johnnyboyvan Thanks. Yes if lump sum, you would need to rollover to a traditional IRA, but now you would have to deal with RMD's when the time came, in addition to investing and hoping for no market downturns,
I retired at age 50 with 30 plus years in the Miltary with 60% pension $65,000 US dollars yearly. My wife will be retiring from Mexican Federal government in two years at age of 49 with $50,000. Both our pension will be index with cost of living. We are mortgage free no bills or loans and both her children will graduate from medical school with no loans. We are very blessed with our pensions.
I retired from the Air Force as a captain at age 36. I've been collecting that pension since 1996. I also retired from the civil service as a GS-15 and started collecting that pension in 2022. Neither of these precluded me from doing a defined benefit plan when I was in the private sector for a dozen years in between. Plus the civil service has the 401k-like TSP, which I leveraged. Now I own my own consulting practice, and that permits me to invest heavily into my IRA. Who knows? I may even have enough to retire some day.
I bet you are in such good shape that you only need a little extra each year to meet your annual retirement goals. My parents did the same, plus Social Security and long term health insurance (which Mom needed), and government health insurance. I’m glad you served and that you are well prepared for your retirement.
My SS is nearly at max because of my private sector and government earnings, so that will really help. I'm 64 and am holding off until 70. (I'm in good health and earn part-time from my practice what I used to earn in my full-time job.) I'm graced with two health plans, one from the military and one from civil service. Taking Medicare will be more of an annoyance than anything else.
I retired from the Marines after 30 years and then taught HS for 14 years. So, I have the military pension (COLA) and teacher's pension (no COLA) plus SS (age 66). Luckily my wife and I have Tricare 4 Life to take care of the 20% Medicare doesn't pay.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha.
I wholeheartedly concur. At 60 years old and newly retired, my external retirement funds total around One million two hundred fifty thousand dollars.. With no debt and minimal retirement fund allocation relative to my portfolio's value over the last three years, I recognize the importance of a financial advisor.
Retirement is great. I took my first defined benefit retirement and cashed it out after 10 years employment. I bought my first house with the money. later in my life I retired again with 20 years at another outfit. I really liked that benefit, and am content with the end result. Thank you Geoff for your channel. I would encourage everyone to retire as soon as you can. An old wise man told me in 1972, (I was 18) that I would need $1,000 times my age in order to be secure in the future. He was right. Nowadays I don’t know the new formula, for youngsters, but it worked for me, and I am now 70.
I worked for the state of California. Retired early with a pension that receives 2% COLA increases annually. Will soon be eligible for social security. I’ll be earning more than what I was making when combining both pension and social security. I love it! Retirement is fantastic!
My husband would need at least $600,000 in a 401k or more to make up for the pension he got. He has 401k too though. They also paid for his and mine and our son’s health benefits at age 55. Saved us a fortune. He started a second career at age 55 and is still working. He was in a trade union. We put the money we saved on health insurance in savings. It probably saved us over $300,000 nit having to pay for health insurance on the marketplace.
I know lots of retired people. And every single one is on some form of pension. Most are a public one. All got to go yrs earlier. All make substantial more than if they had saved for themselves. They don’t have to worry about whether they’ll get a check next month and for how much because of market fluctuations . They can enjoy retirement starting at a young age knowing that for the rest of their lives that pension check will arrive on time every time. I know of no one retired on their own savings.
Only thing they need to worry about is the company going under. This is a non-issue for gov pensions, and gov is really the only place that offers pensions nowadays... but it's important to note. Private pensions are pretty risky to rely on.
This is the main reason that lures people to public jobs. Nobody is getting rich but their futures are (mostly) secured. Also many are saving beyond their pensions as well. TSP, IRA’s, etc.
All true. Raising four kids causes ebb and flow of any additional savings beyond the Government pension I had with a SoCal municipality. Same for my wife who also had a pension through the school district. Knowing our pension formula and to maximize the 75% after 30 yrs I went up the career ladder. Been retired for ten years and it’s been a Blessing. Also the city I worked for guarantees full medical and dental for life.
As a Government employee we have both. We have a pension plus a Thrift Savings Plan that they match up to 5 percent. Also if you retire before age 62 they will pay you a supplemental that is approximately 70 percent of what you would get for your social security at 62. As a military veteran I bought back my military time and then that added 3 years towards my pension. Another thing that is offered that accrued annual leave up to 11 weeks will give you a pay out when you retire and we get to keep our health benefits until we go onto Medicare. We make a lot less than the average salary in the private sector but the benefits are why we stay for 30 years.
I am a retired federal employee. You don’t have to give up your health insurance. I am keeping my blue cross blue shield health insurance. Many doctors will not take new patients who only have medicare.
In my case, definitely the defined pension. My employer was the USAF. Retired as a colonel with 34 years for pay. Monthly gross amount is $11,890, minus $723 for the survivor benefit.
Two months until I turn 50; my company has a defined benefit pension. A reduced version is available at the age of 50 but it increases about seven percent every year so there a massive incentive to keep going until it plateaus. Although I’ve seen a lot of people leave at 50, I think the best move is to ride that “unicorn” until age 55. Good luck everyone!
I have a pension, I'm taking the 20 year guaranteed plus the spousal guaranty at a reduced amount. Between SS and the pension at 64 I should have my current income. I live small, so from 64-84 I plan on saving half my income like I do now, so if the pension goes away after 20 years I saved up yet another pension essentially, all of which will be in irrevocable trusts so my sons get that loot. Note to all, pay off all debts and live small provided it's reasonably comfortable. I'm fine with my small life, money isn't meant to make you happy it's meant to pay your bills, happiness is on you.
I worked one place for twelve years and was vested in the defined benefit plan, but unfortunately, it's a fixed - not an increasing - benefit so it will become a smaller and smaller part of my overall retirement income. Luckily, SSI will be about five times as big, and I have an IRA as well. One thing you didn't mention about 401k's and the like (403b's, SIMPLE IRA's, etc.) is that you have to watch where and how the money is invested, and how much is taken up-front in the contribution, or what the cost ratio is on the investment. I worked one location and the up-front money taken out was 5%. I convinced the powers-that-be to look at changing the IRA location to Vanguard, with extremely low cost mutual funds and no up-front money taken out. They paid for and brought in an investment adviser for all the employees to use, to customize the investment mix and help them understand the new system, as well as help them decide whether to roll over any past investments into the Vanguard system.
Many years ago I vested for a small defined benifit and then left the company. I was able to roll the lump sum into a new company's 401k. No doubt, that amount doubled several times over the next 30 years. So glad I was allowed to convert it into equities, instead of leaving it in an insurance product.
Put in my 33 years at the state. Allowed to buy 4 more years of prior military service to make it 37 years into the plan. 2 months away from a state pension (92.5% of final salary average). Plus healthcare (except vision, dental). Plan to take social security next year. I stayed because of the pension. Glad I did.
I don't know about better, but I'm happy that when I retire at 58, no matter what, I'll have $5200 coming in and that number will grow every year, including a $1100 jump when I turn 62. These numbers aren't subject to the rise and fall of my 401k which, if I'm lucky, will be around 100k by then. Having free health care for life and my wife's health care costing roughly $75 a month is helpful too.
My wife and I are both retired law enforcement. We also were volunteer firefighters. With those two jobs, we were able to retire in our 40’s. We are now in our 50’s, and are extremely happy with our early life job choices.
NYS employee retirement escrow account, lost 26% in 2009 according to the Comptroller DiNapoli.! They were 15% invested in hedge funds which he planned to change. Coincidentally, our property taxes rose 300%-400% by 2011 and 2012! I discovered this after years of questions to find out the reason for the rise. About one third of houses in my town were for sale at that time and I read through the listings to find the tax rate history! I don't think the 2% tax cap put on school taxes in 2011 helped. I believe that all teachers and other state employee's got their full pensions! I can only assume that this was the reason for the tax rise. Local officials couldn't give me an answer including our Town Supervisor..
We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.
For retirees and those close to retirement, I believe it's particularly challenging. All those years of labor only to lose it all to a problem you weren't responsible for, my regrets to everyone retiring during this time.
I'm very worried about the future and where we're all heading, especially in terms of money and how to get by. I'm considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
Its unclear which stocks and sectors will lead the market in the next uptrend. Stay away from rebalancing if you do not have guidance from a planner and investment strategist. My finances have been in order since I got a wealth planner like Carol working with/for me.
Impressive yield. Things I love to hear! I like to stick it out on my own, but many false predictions lately.. Who is this person you use in particular? Vanguard Advisors take forever to pick up, I am not cut for that.
The decision on when to pick an Adviser is a very personal one. I take guidance from ‘Carol Vivian Constable‘ to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Great info! My wife and I both worked in a PERS covered position, she for 10 years, me for 6. My income was ~2x hers. When we left I took my contributions out and put it in an IRA. She left hers in PERS. Mine grew to just over $200,000 and hers pays ~$385 a month. Slightly better return on the 401 but hers is indexed to inflation and she began collecting at age 60. Overall a wash I think
I worked in a union facility and for some of the years we had a defined contribution plan, started withdrawing it and letting my 401k stay untouched. Im retiring at the end of this month at 61.
My county is AAA bond rated. Pension with COLA and healthcare. Optional 457B. 25 years of service at 65%. Love my Union. My wife works here too. As long as you don’t mind the lack of sleep and years of mental trauma, it’s all good 😂. I’m not joking 🙃
❤i worked for BFEC... received a pension + stock matching 401k up2 IRS limit as i remember. I retired at 47 y/o in 2008. I lived on savings + dividends until I was 55 y/o and since have been living on a pension + a portion of the portfolios earnings. not sure when to start social security. ❤ Great channel Mr. Schmidt.
My wife has a DB plan that is what dreams are made of. Ridiculous actually. Even my prodigious investing in my 401k pales in comparison. And she can retire years before I can. If the government runs out of money, they'll just raise taxes!
I worked for state government in my 20s for a few years and have a pension that will payout $250 a month (no inflation adjustment). It probably would have been better if I had taken out my contribution when I quit and put it in an IRA. I quit to go back to school, so I didn't have a 401k to roll it over into.
I have 2 half pensions, one was at 55 next at 62. I also have a nice IRA from all my 401Ks. Wife will have full state pension. All of these have survivor continue payments. The IRA has gained slightly over the last 8 yrs with wide swings.
My employer offered a 457b tax deffered plan, almost nobody took advantage of it. What a mistake! I never missed it, that money grew 8x and allowed me to retire at 52 with 30 years.
My mother's pension does not have a cola and the company got rid of the retiree medical insurance. I have a military pension and then a 401k from my post military job. I would say a 401k is better although the military pension enabled me to max out the contribution to it and my IRA.
Both is always better. I get a lifetime pension, and I never understood co-workers who didn't build the 401k as well. Our employer made it so easy too...sign up online, adjust the percentage or dollar amount withheld every pat period if you want, too easy. Guaranteed fixed income only but threat of inflation, or guaranteed fixed income and hopefully $1m of your own still building return if you fed it the max for a few decades. What a no-brainer.
I did 20 years with 8 years reserve so I won’t be able to collect till I’m 59. However it gives me a feeling of security because I also have both a TSP (similar to 401k) and IRA so when I do collect I may not need to draw from my IRA or TSP until I hit RMD. I don’t have kids so I’ll leave it in a trust for my nephews and nieces to use to pay for college. I didn’t learn financial literacy till I joined the military but I was thankfully frugal with my money and did start saving early. Plus I’d rather spend my money on making memories with my family than on things. If we all lived more simply we’d be much happier and with fuller wallets and hearts.
times are changing. i was fortunate enough to get the traditional pension then the company i worked for eliminated for portable pension and then they decided to eliminate that for a percentage of your income into 401 k. most workers do not put enough into 401 k. and i max out so i decided to not go into the 401k company match of 5 percent. and i grandfathered the traditional company pension. so i am very fortunate unlike these days . thank you for the video
Sadly most don't fund there 4o1k.Defined benefit is mandated participation for us.I am also debt free including home.Have 457,roth ira,individual accounr.I also save gold,silver,and platnium.I also don't drive 100k trucks like most of my coworkers. I love divden investing and have a 2k a month goal In five years in dvdens.What ever plan you have fund it and start as early as you can.Happy investing/stacking.
@afish43 yes but pension have and an go bankrupt.Calpers isn't doing well it just borrowed 34 billion.SSI has been raided by both political parties. Scary times ahead in this fourth turning.Keep safe and prepare what you can.
I was lucky. At 54 and because of the Great Recession we had to start over. I lucked out and started driving a public transit bus with a state pension and all the overtime I wanted. We paid off our mortgage bought slightly used vehicles and a camper ehile contributing to my 403B. I retired at 66 with a state pension decent Social Security. No worries here.
My 4th grade teacher is 87 years old and he’s still getting a pension from NYC ($40,000 a year and he retired 30 years ago if not longer) it’s public information in NYC. They also get COLA increases and they also have their health benefits fully funded including Medicare part B which saves them a fortune over a 30 year retirement. They also get other benefits like a TDA plan. Tax deferred annuity.
@@jdenino6022- Shhh! 🤫🤫 My husband gets that too but as mentioned in the video, we keep that information top military classified secret! 🤫. My husband retired from teaching in 2014 after 30 years and the savings showed up in 2020 when he had major bypass heart surgery. The medical bills totaled $150,000. With Medicare and a separate health insurance plan, we only paid $300. out of pocket. We did travel too - Hawaii, Alaska, Europe - places that we NEVER could afford on a teacher's paycheck. What helps with travel is going off season when kids are in school and prices are cheaper. Of course working as a teacher, you have to be in school with students.
Like most things in life, it depends. Defined benefit plan employee contributions are a percentage of annual salary but pension retirement payments are based on highest wage you earn so if you stay at the firm and rise in the ranks, you get a high pension but will have contributed a relatively low amount for a lot of time when you are a junior employee.
I agree. The reason pensions are perceived to be “better”, is that more was “knowable”. Is it really better? Yes. Is it worse? Also Yes. It depends upon you, the retiree. I just retired having worked for a company that amazingly had both a pension and a 401k. Sadly it was phased out for anyone hired after 2016. But having both, I dont understand why planners dont advocate using multiple retirement vehicles more. Like annuities and IRA’s or Roth 401k’s and taxable brokerages together at the same time. Too often its “this is best, do this first, then this second but only if you have any money left”.
I took my my first retirement at 45. My pension started paying me about 58% the next month. If I work until 65, I will collect well over 1 million in gross payments from the pension; while still working. Some pensioners, me included, are hit with the WEP provision. I am looking at SS as fun money and not including it in my planning.
@@pioneer7777777 correct. I am collecting a little over 58% of the average of my best 60 months salary. This started at 45 and will continue until death.
My wife is a teacher and she will get a pension and a IAP (401k like account) that her employer puts 6% in every year. Estimated 93K gross per year in retirement from the pension alone.
I just retired in 2023 at the age of 56 after working 30 years in the state criminal justice system. I get a monthly pension check which will be supplemented by Social Security at age 62. I also have a modest deferred comp account to draw from if needed.
I never relied on matches or pensions. Funded my 401 or IRAs as much as I could thru the years and became a Bolge head early. But pensions helped those that felt that they could start saving in their 40s or 50s to fund their retirement. So pensions and SS saved them from being in a destitute position.
My mother had a traditional pension with a fixed payout. It seemed like a nice amount when she retired at 65 but by the time she died at 97 the buying power was less than 1/2 of what it had been..
Remember companies can sell the management of pension to an insurance company. Then if that insurance company goes out of business you have to fight your state for pensions. If you have the option take the lump sum, and if you want a set monthly payment, get a annuity from a insurance company with excellent credit rating.
I’m collecting a pension after 40+ years as an engineer that is about two 14:21 -thirds of my retirement income. But it has no COLA or other benefits other than paying my spouse if I pass before her. I also have a decent amount of money in my 401K fund which is likely to form the backbone of my retirement at some point in the future. Although my younger coworkers were envious of my pension, they have a lot more control over their retirement fund and don’t have to feel the need to stick with the company forever to maximize that fund.
My husband is a Federal employee that is on the old retirement system. He will get a pension & is currently receiving his hard earned 100 percent Social Security check. But Once he retires due to the Windfall Act he’ll be receiving a portion of his Social Security. He also has a 401K. I’m on the new Federal Employee retirement plan called FERS. The old retirement plan is better than the new one FERS. I got hired 5 months after the old plan was done away with. 😢
Through my working life my company went through 4 mergers. Those that had a pension were frozen. I started in 1989 and was not subject to a pension. The 401k served me well and I was able to retire at 59 1/2. I would not have been able too with a pension.
The best is matching 401K. After that, a defined plan, then regular 401K. That said, it depends a lot on how aggressive you are at saving. Defined plans often force you to save because many gov't jobs now make you pay for your defined plan, so there are many factors that come into play. Today, I think one must do the math.
Depends on who you have your pension with. While it is going OK now expect many states like Illinois and California to run out of money and want to be bailed out at a federal level (which should never happen). If you don't think it cannot happen look at the employees of Detriot.
Companies switched to 401K plans to transfer pension planning (and its cost) to their employees. Some prospered with this change, others failed to fully participate, or even borrowed against their 401Ks for immediate spending, sacrificing retirement income. FWIW, traditional retirement plans were best for people who spent a career with one company, which is relatively rare. Defined benefit plans are the best, but rare to non-existent in the private sector.
One other possible "Con" for defined benefit is that it locks you into an income floor. It's probably only an issue for individuals looking to take advantage of lower tax brackets for Roth conversions.
I think 401k wins, but these strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skills and knowledge
Retirement is now more difficult than it was in the past. it's all about balancing your risk tolerance with your long-term goals. Maybe consider speaking to a CFA to help in diversifying your portfolio to spread out the risk.
Working with professionals who have expertise and experience in the market can provide valuable insights and guidance to navigate volatile and uncertain times.
Financial planning and retirement strategies are crucial, especially in today's economic climate. With global economic fluctuations and uncertainties, it's essential to have a solid plan in place to protect your financial future.
I've always delegated my excesses to an advisor, since suffering major portfolio loss early 2020, amid covid outbreak. I'm now semi-retired and only work 7.5 hours a week, with barely 25% short of my $1m retirement goal after subsequent investments to date.
Pensions and 401k's act synergistically. My FERS pension covers all of my expenses and will have cost of living adjustments when I turn 62. This gives me very high risk tolerance so I can let my TSP/401k stay in growth funds to beat inflation. My TSP continues to grow exponentially to all time highs despite a 6% annual withdrawal rate (higher than the 4% rule). The pension allows me to ride out bear market corrections. Investors buy the dips, so downturn corrections snap back quickly in modern times.
For me our pension was an absolute ripoff. We were told we could retire at 30 years with the company with full pension. Then the union who runs it ran it into the ground and they took away our 30 and out priviledge as a result. So now I need to work 12 extra years (42 total) to get a full pension. In the meantime, we negotiated our 401k match away to get the pension so I haven't had essentially either for 16 years.
Some units of local government do not pay into the SS system, which could really come back to haunt you unless you work just until the vesting point and then leave for an employer with a 401k or 457 plan that's actively paying into the system. This was a factor in my departure from my last government role (along with below market salaries that made saving for a standalone IRA just about impossible)
I’ve been at my non-union job for over 26yrs now and was grateful that I Could put money away into a Pre-tax 401k and a Roth 401k plus a pension. This way I’m able to not pay a lot in taxes when I retire and have accumulated so far of well over $1.2million plus I can pass that money down to My kids which most union pensions you can’t do this let alone the wife get anything after the person dies. Both have its pro’s and con’s but I’ll take an avg of 11-13% on my returns anyday plus the benefit of my Roth 401k on tax savings
Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Yes a pension is better than a 401K. In addition to my California teacher pension, some of my extra work went into a supplemental pension account which will be about 100,000 when I retire. Even with the windfall provision, I qualify for a decent amount of Social Security. The problem with 401K's is that they can lose value and fees are taken out. Fees are not taken out of my pension. I will also have health benefits in retirement. The average corporate worker is getting screwed.
A fundamental difference is that those managing their own investments will on average tend to have money left over, sometimes significant, when they pass or as they approach their late years. This is necessary in order to have sufficient buffer to cover volatility in the profile. Some of this money will feed into the health care system, but some will presumably be passed to family or charitable causes. Beyond the individual impact, I wonder if this will have some cultural or other impact, especially as the people that had to switch to 401k are now approaching later ages, given that the switch to 401k happened around the 80’s.
Government sector plans still use defined benefit plans which is a major reason taxes are so high. In my district, government employees pay 4% to get a gold plated retirement benefit funded by the taxpayer. As a private sector employee I have to pay social security taxes, 20% of my income in 401k then pay super-high local taxes to fund those gold plated pensions for government workers. I am funding 3 retirements, 2 of which are not mine.
My wife has a pension (teacher) and I don't. I like the combination, actually - it allows me a little more risk-tolerance in my investments. One slight disagreement with your video - as a public school teacher, her salary is considerably higher than what she would get as a private school teacher
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
![[#2024MAMA] G-DRAGON - 무제(Untitled, 2014)+POWER+HOME SWEET HOME+뱅뱅뱅+FANTASTIC BABY | Mnet 241123 방송](http://i.ytimg.com/vi/Ox29z5Nf1Uk/mqdefault.jpg)
I am truly very fortunate and blessed. I have a military pension, a federal civil service pension, veterans disability, Social Security, a Roth IRA (along with one for my wife), and a Thrift Savings Plan.
I worked 26 years as a teamster, retired at 58 with about 50% pension. I have a modest 401k. I Started collecting SSI widow benefits this year at 60. I will collect my SS at 70. Retirement is great.
Pro Union here. Enjoy your retirement brother.
me too mark
Pro Union as here too. County Government for 26.5 years. I'm 59. Plan to retire @ 63 with 72.54% of final compensation. defined benefit. One thing I didn't do is start early with the 457b Deferred Comp. But, I still plan to take SS @ 70.
About how much is a modest 401k??
I know, none of my business, but curious nonetheless.
@@arthurbishop3173nosy lol
Thank God my dad was Union. My mom lived 20 years after his death and got his pension and health care the entire time. I never would have been able to take care of her. Companies that go out of business should not be able to spend one dime of the employees pension fund and it should be law that any company that buys another should honor it as part of the purchase. This vulture capitalism is destroying the country.
My mom lived 38 years after my dad passed. She drew survivors benefits pension and health care that whole time from VA hospital.
Wrong. That "vulture capitalism" is one of the reasons that the US economy is far stronger and more vibrant than any other in the world, especially in comparison to similar western european countries. The US was built on the idea of self-reliance, NOT a highly regulated nanny state. Those items are mutually exclusive as the nanny state with high regulations imposes burdens on businesses AND workers that limits both, thus making it harder for either to excel. Self-reliance means being responsible for yourself, including spending less than you make and saving for your own retirement.
@@chriskasprzyk6235a pension is part of saving for retirement isn't it?
Your logic is flawed.
@@gtb5216 What in the world are you even talking about? There is no flaw in my argument whatsoever. Saving for your OWN retirement means not relying on a company to do it for like in a pension, but saving in a 401k, IRA, or any number of self-directed savings and investment vehicles. These are portable and allow you to take them with you and free you to seek out better employment opportunities since you are not beholden to sticking to the same company in order to qualify for a pension that may not be there when you need it.
The main crux of my argument though involved self-reliance and not being beholden to a nanny state and its regulations that limit growth and opportunity for business. It is business that creates jobs and wealth, NOT government. Government is a leach on productivity.
@@chriskasprzyk6235if a company offers a pension as part of their compensation the company owes it to them. If they don’t for whatever reason it’s just as if they didn’t pay them for work done.
As far as 401Ks go it doesn’t appear to be very successful as a retirement plan. I suspect this is mostly because the companies don’t invest as much in them as they did pension funds. It’s also easy for an individual to make mistakes that they can’t recover from
Best decision I ever made in my life was to go back in the Army Reserves after a 15 year absence at age 41. People thought I was crazy, but I stayed in the Army Reserve until age 60 when I retired with a total of 25 years. My pension is 2,400 per month plus an extra 1,000 for disability. Both have COLA adjustments every year.
Similar for me.
Yep...29 years active and reserve, so $4,300/month gross plus $3946 nontaxable for disability.
Yup, same here, National Guard and disability. Plus I worked as a Deputy in Florida (FRS-Pension) and am doing a short tour in Nevada as the IT guy for my library. NRS Pension. FRS and NRS are small, but I can afford the kind of dog food you add water to make gravy. Yummy!
It really depends on your goals. I personally would prefer the security of never running out of money (a pension) vs. gambling on the stock market to fund your retirement (401k).
I’m in my late 20s and will have a pension. I plan to do both stocks and rely on my pension. Saving as much as I can to hopefully retire in my early 50s.
@@LumiLunar same here. I’m a bit older than you, but will have social security, a small annuity and whatever I have in my 401k when the time comes to retire in a few years. We will likely also move to a less expensive, rural community somewhere.
@@agoogleuser9218 I live in a high cost area at the moment too. I do plan to at least move to a slightly less expensive area. I don’t know what the future holds but at the moment I don’t see myself leaving my state.
The best part of being a federal employee is the fact that you have three different retirement sources -- pension, SS, and the TSP (a 401k-like program). As someone who joined the federal ranks relatively late, I am more than willing to trade a little lower salary for the more comprehensive retirement package.
Agreed. I retired last week at 56 with 31 years of service and invested aggressively and maxed out my tsp for the past 20 years. I look forward to collecting a pension and relaxing.
@@Retired_Life_1 Same. As a Fed I maxed out my yearly TSP contributions staying fully invested for nearly my entire career. Had to forgo a few wants but it paid off big time by the time I retired at age 60.
yep looking to retire at 57 with 30-31 years of work
@@Retired_Life_1 same. Joined the fed govt at 39 and putting every penny possible in my 401k. Even starting that late, I will be in decent shape. None of my siblings are. None of them will be able to retire.
Oh and not to mention the fed govt paid my student loans.
I worked for GE many years ago, they had both a defined benefit plan and a 401k with matching. I was able to participate in both, and am looking forward to my small pension plus my 401k/IRA savings and social security to allow me to live out my retirement quite comfortably.
aka the good old days
My 94 yo mother worked for GE many years ago. Her pension is very small. Doing away with her retiree health care hasn't helped.
@@scottyshields9876 I bet, did not have that included at the time I worked for them.
All the hype I heard about saving for retirement this one The Three legged Stool for retirement was a great concept. SS, pension and 401k was golden, but sadly no longer the case. Workers just didn't have any control of the pension portion. Layoffs, bankruptcies, pension reductions and etc made it impossible to rely on the pension leg.
Worked for a large transit system in a major city. Retired at 55 with a full pension. Also put 20% of my salary in a 457 plan. Retirement is great. Haven’t even touched 457 yet
NYS Teachers’ Retirement is one of the healthiest in the nation. I retire in June with a pension of around $100,000. Never thought about it when I started teaching, but now I’m financially secure and can enjoy my retirement without worrying about where the money comes from. I can’t wait!
As a teacher for the Los Angeles Unified School District I’m jealous. Mine will be about 60 percent of my highest salary.
I retired LAUSD -31 years -82K -annual with COLA-still miss the kids-check w CALSTRS!
@@FrankDimino1 I’m retiring in 2027 at 60 with 28 years in special education. That’s enough. When did you retire?
Railroader .. retire Age 60 with 30 yrs will get you max ( spouse gets 50%).. 👍
Tax payers are pay8ng for this crap
Love the Michigan helmet! Took the small defined benefit plan as a lump sum, over a decade ago and rolled it into an IRA. Withdraw 3-4% for the past decade, and collected less than the 100% guarantee for me and my spouse for the first few years. Today I get more than the defined contribution for the two of us. And, we have grown the balance. Would do it again. Finally your point about pension plans being raided or companies going bankrupt hits home -- United Airlines comes to mind.
I have a military pension, put my time in, enjoying it while I’m still working full time. Air Force CE. I’m retiring in two years at 65.🇺🇸
Good on ya, I too am AF retired in 2005 (27.5 yrs), and soon to be retired FERS at 65. So glad we have the mil retirement in addition to TSP and Soc Sec. I’m looking fwd to retirement. Enjoy yours! Cheers
Finally, some others in the same boat! I retired from the USAF back in Nov 2001, started with the US Forest Service in Jul 2002. I’m retiring very soon at 61. I’ll get a FERS stipend until I’m 62…then I’ll collect SS. Hope you all enjoy your retirement like I plan to!!! Thank you both for your service too!!!
Similar story for me. Retired from the USAF in 2008, 30 years, age 56. (I’m a health care provider, recruited at age 26.). Went right to work with Veterans Health Administration. Worked for 10 years, until I reached my full retirement age. Having the military pension, VA pension and TSP in addition to Social Security gives me complete financial security.
Retired Marine here. Served 30 years. I have no complaints. When I get the "thank you for your service" line, my reply is that the government thanks me on the 1st of every month!
Me too. The cherry on top is military and federal pensions have COLA increases. Many of the old corporate pensions don't increase over the years with a COLA type adjustment and inflation eats them up over the course of a retirement.
I did not have much retirement. At age 50 I started a state job. When I retire at 65 my pension will be worth $2200/month on top of our SS. That is amazing for 15 years vested. I had no idea.
That sounds pretty great - what kind of state job?
I started my gov job at age 25. Kinda fucked that one up because my pension is full set to reach full retirement at 50. Had got the job at age 40 I would still get the same benefit at 50. But hey, it's still a great deal.
That is great. $2400 for me after 26 yrs.
Amazing. Proves its never too late.
That’s the problem. Drain the swamp
I worked in the retail clerks union and retired with 35 years in the industry. I received my defined pension at 58 that included a $75 month for health insurance until I hit 65. Its been great so far. Now at 68, I supplement my retirement with dividends through my investments and I have no debt. Im waiting until 70 to collect my max SS.
When you consider vesting, appreciate the fact that the public sector jobs are far more stable. Government agencies don’t lay off employees at the drop of a hat to raise their stock price. It’s far easier to have a sustained career in the public sector. Look at the thousands of people complaining online about have recently been displaced by their employer. None of them are public sector employees.
In the 80s and 90s local county jobs were looked down on. Low wages. Really old crumbling buildings and offices. No computers. Old vehicles with no air no radio.
But. It was stable.
My friends in public sector were able to retire far sooner than I was, sometimes more than 10 years earlier.
Public sector just robs from the taxpayers.
I’m 29 years deep into a municipal pension and hoping to retire in 5-7 years around 55-57 . That was the primary reason I stuck with this career because it certainly wasn’t the pay. To combat that pay differential, I have always had a side hustle that I use for investing and vacations for my family. Fully funding our Roth IRA’ and a now sizable brokerage acct using some of those monies to cover health insurance from 55-65 until medicare kicks in. The key to making this work is planning way in advance. Think about it early and often!
Because I didn't think about my plan enough earlier, I thought about it very often later.
I always found that the night meetings with municipal work (at least in the planning office) made a side hustle time prohibitive. But, awesome idea if you can make it work!
@@jamesrather1510 I schedule the side hustle around evening meetings after hours activities. It helps if it’s flexible and I would argue a key metric to making it work.
21 years military service with a 6 year break in service (worked offshore in the oilfield - disaster when they started parking boats and rigs I got out) the Army was not my cup of tea so this time went into the US Coast and loved it. Went aviation and the 18 years flew by. After retiring from the USCG I backed into a state job doing maintenance in the school system and I blinked and 20 years went by. I will collect my SS at FRA of 66 and 10 months but I have backed into another job of driving disabled Veterans to medical appointments and totally love this position. Brand new company van I park at my residence and I get to interact with people every day that are glad and thankful I am there to pick them up. BTW I just turned 65 and loving it, I prepared for this season. When not driving the van I am putting 1,200 miles a year on my bicycle. Not one to stand still.
Just retired first of the year, with both pension and 401k, plus retiree medical benefits. I put 20% into my 401k each year, plus a company match, and will take the pension in a lump sum to be put into an IRA. I am very thankful to have all the benefits that we got, even though they are changing for new hires. My company was non union, but treated us very well. Retired after 31 years at age 60.
Happy that I have both 401(k)'s and a pension.
I feel very blessed to have a pension coming from the state of California. God willing I will retire in 24 months with a pension exceeding 90% of my highest salary at the age of 62.
I retired at 57 this June with a DB pension...love it . 32 years of teaching was enough. Having a bridge is great till 65. 😊
We’re you given an option of lump sum? I work for a company where some of us have pension. They do offer the option of lump sum.
@@shockwave1126No lump sum offered but pension is worth over a million. Single so nobody gets anything after I pass away! Be careful of the taxes if taking a lump sum.
@@johnnyboyvan Thanks. Yes if lump sum, you would need to rollover to a traditional IRA, but now you would have to deal with RMD's when the time came, in addition to investing and hoping for no market downturns,
I retired at age 50 with 30 plus years in the Miltary with 60% pension $65,000 US dollars yearly. My wife will be retiring from Mexican Federal government in two years at age of 49 with $50,000. Both our pension will be index with cost of living. We are mortgage free no bills or loans and both her children will graduate from medical school with no loans. We are very blessed with our pensions.
I retired from the Air Force as a captain at age 36. I've been collecting that pension since 1996. I also retired from the civil service as a GS-15 and started collecting that pension in 2022. Neither of these precluded me from doing a defined benefit plan when I was in the private sector for a dozen years in between. Plus the civil service has the 401k-like TSP, which I leveraged. Now I own my own consulting practice, and that permits me to invest heavily into my IRA. Who knows? I may even have enough to retire some day.
I bet you are in such good shape that you only need a little extra each year to meet your annual retirement goals. My parents did the same, plus Social Security and long term health insurance (which Mom needed), and government health insurance. I’m glad you served and that you are well prepared for your retirement.
How did that military retirement work, being under 20 years?
TERA. Pro-rated, everything else is the same.
My SS is nearly at max because of my private sector and government earnings, so that will really help. I'm 64 and am holding off until 70. (I'm in good health and earn part-time from my practice what I used to earn in my full-time job.) I'm graced with two health plans, one from the military and one from civil service. Taking Medicare will be more of an annoyance than anything else.
I retired from the Marines after 30 years and then taught HS for 14 years. So, I have the military pension (COLA) and teacher's pension (no COLA) plus SS (age 66). Luckily my wife and I have Tricare 4 Life to take care of the 20% Medicare doesn't pay.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs.
Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more.
I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha.
I wholeheartedly concur. At 60 years old and newly retired, my external retirement funds total around One million two hundred fifty thousand dollars.. With no debt and minimal retirement fund allocation relative to my portfolio's value over the last three years, I recognize the importance of a financial advisor.
Who do you work with?
Look for someone whose act's fiduciary
CHRIS RYAN STEWART
Retirement is great. I took my first defined benefit retirement and cashed it out after 10 years employment. I bought my first house with the money. later in my life I retired again with 20 years at another outfit. I really liked that benefit, and am content with the end result. Thank you Geoff for your channel.
I would encourage everyone to retire as soon as you can. An old wise man told me in 1972, (I was 18) that I would need $1,000 times my age in order to be secure in the future. He was right. Nowadays I don’t know the new formula, for youngsters, but it worked for me, and I am now 70.
I worked for the state of California. Retired early with a pension that receives 2% COLA increases annually. Will soon be eligible for social security. I’ll be earning more than what I was making when combining both pension and social security. I love it! Retirement is fantastic!
This sounds familiar! Lol.
My husband would need at least $600,000 in a 401k or more to make up for the pension he got. He has 401k too though. They also paid for his and mine and our son’s health benefits at age 55. Saved us a fortune. He started a second career at age 55 and is still working. He was in a trade union. We put the money we saved on health insurance in savings. It probably saved us over $300,000 nit having to pay for health insurance on the marketplace.
I know lots of retired people. And every single one is on some form of pension. Most are a public one. All got to go yrs earlier. All make substantial more than if they had saved for themselves. They don’t have to worry about whether they’ll get a check next month and for how much because of market fluctuations . They can enjoy retirement starting at a young age knowing that for the rest of their lives that pension check will arrive on time every time.
I know of no one retired on their own savings.
Retired Army and you are 100% correct.
Only thing they need to worry about is the company going under. This is a non-issue for gov pensions, and gov is really the only place that offers pensions nowadays... but it's important to note. Private pensions are pretty risky to rely on.
This is the main reason that lures people to public jobs. Nobody is getting rich but their futures are (mostly) secured. Also many are saving beyond their pensions as well. TSP, IRA’s, etc.
All true. Raising four kids causes ebb and flow of any additional savings beyond the Government pension I had with a SoCal municipality. Same for my wife who also had a pension through the school district. Knowing our pension formula and to maximize the 75% after 30 yrs I went up the career ladder. Been retired for ten years and it’s been a Blessing. Also the city I worked for guarantees full medical and dental for life.
As a Government employee we have both. We have a pension plus a Thrift Savings Plan that they match up to 5 percent. Also if you retire before age 62 they will pay you a supplemental that is approximately 70 percent of what you would get for your social security at 62. As a military veteran I bought back my military time and then that added 3 years towards my pension. Another thing that is offered that accrued annual leave up to 11 weeks will give you a pay out when you retire and we get to keep our health benefits until we go onto Medicare. We make a lot less than the average salary in the private sector but the benefits are why we stay for 30 years.
I am a retired federal employee. You don’t have to give up your health insurance. I am keeping my blue cross blue shield health insurance. Many doctors will not take new patients who only have medicare.
FERS employees has a fixed pension like the military?
@@purotee1980 Yes.
Also get an extra 10% towards pension if you have 30 years of service and 62 years old
@@afather. me too that’s my plan. BCBS federal is awesome. Been with them since 2001
In my case, definitely the defined pension. My employer was the USAF. Retired as a colonel with 34 years for pay. Monthly gross amount is $11,890, minus $723 for the survivor benefit.
Two months until I turn 50; my company has a defined benefit pension. A reduced version is available at the age of 50 but it increases about seven percent every year so there a massive incentive to keep going until it plateaus. Although I’ve seen a lot of people leave at 50, I think the best move is to ride that “unicorn” until age 55. Good luck everyone!
I have a pension, I'm taking the 20 year guaranteed plus the spousal guaranty at a reduced amount. Between SS and the pension at 64 I should have my current income. I live small, so from 64-84 I plan on saving half my income like I do now, so if the pension goes away after 20 years I saved up yet another pension essentially, all of which will be in irrevocable trusts so my sons get that loot. Note to all, pay off all debts and live small provided it's reasonably comfortable. I'm fine with my small life, money isn't meant to make you happy it's meant to pay your bills, happiness is on you.
I worked one place for twelve years and was vested in the defined benefit plan, but unfortunately, it's a fixed - not an increasing - benefit so it will become a smaller and smaller part of my overall retirement income. Luckily, SSI will be about five times as big, and I have an IRA as well.
One thing you didn't mention about 401k's and the like (403b's, SIMPLE IRA's, etc.) is that you have to watch where and how the money is invested, and how much is taken up-front in the contribution, or what the cost ratio is on the investment. I worked one location and the up-front money taken out was 5%. I convinced the powers-that-be to look at changing the IRA location to Vanguard, with extremely low cost mutual funds and no up-front money taken out. They paid for and brought in an investment adviser for all the employees to use, to customize the investment mix and help them understand the new system, as well as help them decide whether to roll over any past investments into the Vanguard system.
I thank God for my teacher retirement plan and benefits!
I get a fixed pension, I love it because I know what I’m getting each month,plus social security
I also retired at the age of 48
Many years ago I vested for a small defined benifit and then left the company. I was able to roll the lump sum into a new company's 401k. No doubt, that amount doubled several times over the next 30 years. So glad I was allowed to convert it into equities, instead of leaving it in an insurance product.
Put in my 33 years at the state. Allowed to buy 4 more years of prior military service to make it 37 years into the plan. 2 months away from a state pension (92.5% of final salary average). Plus healthcare (except vision, dental). Plan to take social security next year. I stayed because of the pension. Glad I did.
I paid 6% for 28.5 years here in NC to the state pension plan. Retired with 30 years. We both draw SS and life is great.
I don't know about better, but I'm happy that when I retire at 58, no matter what, I'll have $5200 coming in and that number will grow every year, including a $1100 jump when I turn 62. These numbers aren't subject to the rise and fall of my 401k which, if I'm lucky, will be around 100k by then. Having free health care for life and my wife's health care costing roughly $75 a month is helpful too.
Never ending flow of money with a pension. It’s for life. I have two pensions and Social Security. FOR LIFE!
My wife and I are both retired law enforcement. We also were volunteer firefighters. With those two jobs, we were able to retire in our 40’s. We are now in our 50’s, and are extremely happy with our early life job choices.
NYS employee retirement escrow account, lost 26% in 2009 according to the Comptroller DiNapoli.! They were 15% invested in hedge funds which he planned to change. Coincidentally, our property taxes rose 300%-400% by 2011 and 2012! I discovered this after years of questions to find out the reason for the rise. About one third of houses in my town were for sale at that time and I read through the listings to find the tax rate history! I don't think the 2% tax cap put on school taxes in 2011 helped. I believe that all teachers and other state employee's got their full pensions! I can only assume that this was the reason for the tax rise. Local officials couldn't give me an answer including our Town Supervisor..
We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.
For retirees and those close to retirement, I believe it's particularly challenging. All those years of labor only to lose it all to a problem you weren't responsible for, my regrets to everyone retiring during this time.
I'm very worried about the future and where we're all heading, especially in terms of money and how to get by. I'm considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
Its unclear which stocks and sectors will lead the market in the next uptrend. Stay away from rebalancing if you do not have guidance from a planner and investment strategist. My finances have been in order since I got a wealth planner like Carol working with/for me.
Impressive yield. Things I love to hear! I like to stick it out on my own, but many false predictions lately.. Who is this person you use in particular? Vanguard Advisors take forever to pick up, I am not cut for that.
The decision on when to pick an Adviser is a very personal one. I take guidance from ‘Carol Vivian Constable‘ to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Great info! My wife and I both worked in a PERS covered position, she for 10 years, me for 6. My income was ~2x hers. When we left I took my contributions out and put it in an IRA. She left hers in PERS. Mine grew to just over $200,000 and hers pays ~$385 a month. Slightly better return on the 401 but hers is indexed to inflation and she began collecting at age 60. Overall a wash I think
Pensions hands down !
I worked in a union facility and for some of the years we had a defined contribution plan, started withdrawing it and letting my 401k stay untouched. Im retiring at the end of this month at 61.
My county is AAA bond rated. Pension with COLA and healthcare. Optional 457B. 25 years of service at 65%. Love my Union. My wife works here too. As long as you don’t mind the lack of sleep and years of mental trauma, it’s all good 😂. I’m not joking 🙃
Sounds just like my job
❤i worked for BFEC... received a pension + stock matching 401k up2 IRS limit as i remember. I retired at 47 y/o in 2008. I lived on savings + dividends until I was 55 y/o and since have been living on a pension + a portion of the portfolios earnings. not sure when to start social security. ❤ Great channel Mr. Schmidt.
62
My wife has a DB plan that is what dreams are made of. Ridiculous actually. Even my prodigious investing in my 401k pales in comparison. And she can retire years before I can. If the government runs out of money, they'll just raise taxes!
What sort of work does your wife do for the government?
Raise taxes .... See CA examples of public pensions. Create a rebellion or more ex-pats.
Great content, always honest and enjoyable.
I worked for state government in my 20s for a few years and have a pension that will payout $250 a month (no inflation adjustment). It probably would have been better if I had taken out my contribution when I quit and put it in an IRA. I quit to go back to school, so I didn't have a 401k to roll it over into.
Working on the military pension. Half way there. Also stacking up cash in my life insurance policy.
I retired last year post office 50 years of service. CSRS nice because you talk to past retirees they make more money retired than they did working.
I'm also CSRS USPS retired. 50 years?? You must have liked your job to stay on as max federal retirement tops out at 42 years.
I have 2 half pensions, one was at 55 next at 62. I also have a nice IRA from all my 401Ks. Wife will have full state pension. All of these have survivor continue payments. The IRA has gained slightly over the last 8 yrs with wide swings.
My employer offered a 457b tax deffered plan, almost nobody took advantage of it. What a mistake! I never missed it, that money grew 8x and allowed me to retire at 52 with 30 years.
My mother's pension does not have a cola and the company got rid of the retiree medical insurance. I have a military pension and then a 401k from my post military job. I would say a 401k is better although the military pension enabled me to max out the contribution to it and my IRA.
Both is always better. I get a lifetime pension, and I never understood co-workers who didn't build the 401k as well. Our employer made it so easy too...sign up online, adjust the percentage or dollar amount withheld every pat period if you want, too easy. Guaranteed fixed income only but threat of inflation, or guaranteed fixed income and hopefully $1m of your own still building return if you fed it the max for a few decades. What a no-brainer.
I did 20 years with 8 years reserve so I won’t be able to collect till I’m 59. However it gives me a feeling of security because I also have both a TSP (similar to 401k) and IRA so when I do collect I may not need to draw from my IRA or TSP until I hit RMD. I don’t have kids so I’ll leave it in a trust for my nephews and nieces to use to pay for college. I didn’t learn financial literacy till I joined the military but I was thankfully frugal with my money and did start saving early. Plus I’d rather spend my money on making memories with my family than on things. If we all lived more simply we’d be much happier and with fuller wallets and hearts.
It’s a great asset. It gives an annual cost of living tied to inflation. Between Social Security and my Pension, I haven’t needed to touch my 401k.
times are changing. i was fortunate enough to get the traditional pension then the company i worked for eliminated for portable pension and then they decided to eliminate that for a percentage of your income into 401 k. most workers do not put enough into 401 k. and i max out so i decided to not go into the 401k company match of 5 percent. and i grandfathered the traditional company pension. so i am very fortunate unlike these days . thank you for the video
Sadly most don't fund there 4o1k.Defined benefit is mandated participation for us.I am also debt free including home.Have 457,roth ira,individual accounr.I also save gold,silver,and platnium.I also don't drive 100k trucks like most of my coworkers. I love divden investing and have a 2k a month goal In five years in dvdens.What ever plan you have fund it and start as early as you can.Happy investing/stacking.
That is why pensions were put in place, the same reason SS was created. To help the unfortunate when it came time to retire.
@afish43 yes but pension have and an go bankrupt.Calpers isn't doing well it just borrowed 34 billion.SSI has been raided by both political parties. Scary times ahead in this fourth turning.Keep safe and prepare what you can.
I was lucky. At 54 and because of the Great Recession we had to start over. I lucked out and started driving a public transit bus with a state pension and all the overtime I wanted. We paid off our mortgage bought slightly used vehicles and a camper ehile contributing to my 403B.
I retired at 66 with a state pension decent Social Security. No worries here.
This is why we call the teachers’ pension “the golden handcuffs”. Once you’ve put a fair amount of time in, you’re stuck!
California teachers pension. Huge issues right now. Economic Ninja
I don't look at it that way. I feel so fortunate to be getting that pension when I retire in a year or two.
My 4th grade teacher is 87 years old and he’s still getting a pension from NYC ($40,000 a year and he retired 30 years ago if not longer) it’s public information in NYC. They also get COLA increases and they also have their health benefits fully funded including Medicare part B which saves them a fortune over a 30 year retirement. They also get other benefits like a TDA plan. Tax deferred annuity.
True but it comesin every month, and we loaded up on 403B and Roths. Now we have SS, Pension and RMDs.
@@jdenino6022- Shhh! 🤫🤫 My husband gets that too but as mentioned in the video, we keep that information top military classified secret! 🤫. My husband retired from teaching in 2014 after 30 years and the savings showed up in 2020 when he had major bypass heart surgery. The medical bills totaled $150,000. With Medicare and a separate health insurance plan, we only paid $300. out of pocket. We did travel too - Hawaii, Alaska, Europe - places that we NEVER could afford on a teacher's paycheck. What helps with travel is going off season when kids are in school and prices are cheaper. Of course working as a teacher, you have to be in school with students.
Like most things in life, it depends. Defined benefit plan employee contributions are a percentage of annual salary but pension retirement payments are based on highest wage you earn so if you stay at the firm and rise in the ranks, you get a high pension but will have contributed a relatively low amount for a lot of time when you are a junior employee.
Luckily I I have a government pension from the state that is very well run and stable. There's a reason I stayed there for thirty-two years!
I have a public sector DB plan. I’m not complaining but the fixed payment won’t have any COLA’s forever. I’m hitting the 457 plan hard to help.
I agree. The reason pensions are perceived to be “better”, is that more was “knowable”. Is it really better? Yes. Is it worse? Also Yes. It depends upon you, the retiree. I just retired having worked for a company that amazingly had both a pension and a 401k. Sadly it was phased out for anyone hired after 2016. But having both, I dont understand why planners dont advocate using multiple retirement vehicles more. Like annuities and IRA’s or Roth 401k’s and taxable brokerages together at the same time. Too often its “this is best, do this first, then this second but only if you have any money left”.
I took my my first retirement at 45. My pension started paying me about 58% the next month. If I work until 65, I will collect well over 1 million in gross payments from the pension; while still working.
Some pensioners, me included, are hit with the WEP provision. I am looking at SS as fun money and not including it in my planning.
So you're working while collecting a pension? So you're basically able to save the majority of your earnings at this point?
@@pioneer7777777 correct. I am collecting a little over 58% of the average of my best 60 months salary. This started at 45 and will continue until death.
I retired after 35 year of working with 92 percent of my pay as pension payout with COLA at age 57 and never look back.
My parents had a pension from his employer of 40 years. When my father passed the pension was cut in half, much to my mother's annoyance.
My wife is a teacher and she will get a pension and a IAP (401k like account) that her employer puts 6% in every year. Estimated 93K gross per year in retirement from the pension alone.
I just retired in 2023 at the age of 56 after working 30 years in the state criminal justice system. I get a monthly pension check which will be supplemented by Social Security at age 62. I also have a modest deferred comp account to draw from if needed.
I never relied on matches or pensions. Funded my 401 or IRAs as much as I could thru the years and became a Bolge head early. But pensions helped those that felt that they could start saving in their 40s or 50s to fund their retirement. So pensions and SS saved them from being in a destitute position.
My mother had a traditional pension with a fixed payout.
It seemed like a nice amount when she retired at 65 but by the time she died at 97 the buying power was less than 1/2 of what it had been..
Remember companies can sell the management of pension to an insurance company. Then if that insurance company goes out of business you have to fight your state for pensions. If you have the option take the lump sum, and if you want a set monthly payment, get a annuity from a insurance company with excellent credit rating.
I’m collecting a pension after 40+ years as an engineer that is about two 14:21 -thirds of my retirement income. But it has no COLA or other benefits other than paying my spouse if I pass before her. I also have a decent amount of money in my 401K fund which is likely to form the backbone of my retirement at some point in the future. Although my younger coworkers were envious of my pension, they have a lot more control over their retirement fund and don’t have to feel the need to stick with the company forever to maximize that fund.
My husband is a Federal employee that is on the old retirement system. He will get a pension & is currently receiving his hard earned 100 percent Social Security check. But Once he retires due to the Windfall Act he’ll be receiving a portion of his Social Security. He also has a 401K. I’m on the new Federal Employee retirement plan called FERS. The old retirement plan is better than the new one FERS. I got hired 5 months after the old plan was done away with. 😢
What do you and your husband do in the government? I'm considering maybe switching to government jobs, so am curious.
Through my working life my company went through 4 mergers. Those that had a pension were frozen. I started in 1989 and was not subject to a pension. The 401k served me well and I was able to retire at 59 1/2. I would not have been able too with a pension.
Thanks Mark
The best is matching 401K. After that, a defined plan, then regular 401K. That said, it depends a lot on how aggressive you are at saving. Defined plans often force you to save because many gov't jobs now make you pay for your defined plan, so there are many factors that come into play. Today, I think one must do the math.
Depends on who you have your pension with. While it is going OK now expect many states like Illinois and California to run out of money and want to be bailed out at a federal level (which should never happen).
If you don't think it cannot happen look at the employees of Detriot.
Also correct me if I am wrong but I think Vesting is complete in 5 years everywhere......I had to wait 10 years back in the day.
Companies switched to 401K plans to transfer pension planning (and its cost) to their employees. Some prospered with this change, others failed to fully participate, or even borrowed against their 401Ks for immediate spending, sacrificing retirement income. FWIW, traditional retirement plans were best for people who spent a career with one company, which is relatively rare. Defined benefit plans are the best, but rare to non-existent in the private sector.
fixed pensions are a great deal if you can get it, none of my companies offered it and I did a lot of contracting but my savings are ok
One other possible "Con" for defined benefit is that it locks you into an income floor. It's probably only an issue for individuals looking to take advantage of lower tax brackets for Roth conversions.
Love this channel
I think 401k wins, but these strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skills and knowledge
Retirement is now more difficult than it was in the past. it's all about balancing your risk tolerance with your long-term goals. Maybe consider speaking to a CFA to help in diversifying your portfolio to spread out the risk.
Working with professionals who have expertise and experience in the market can provide valuable insights and guidance to navigate volatile and uncertain times.
Financial planning and retirement strategies are crucial, especially in today's economic climate. With global economic fluctuations and uncertainties, it's essential to have a solid plan in place to protect your financial future.
Honestly this cannot be overemphasized, helping people mitigate unforseen circumstances and mistakes .It's always good to have a financial plan,
I've always delegated my excesses to an advisor, since suffering major portfolio loss early 2020, amid covid outbreak. I'm now semi-retired and only work 7.5 hours a week, with barely 25% short of my $1m retirement goal after subsequent investments to date.
Remember what happened to the value of 401K plans in 2007-2008.
Yeah, I stayed in and kept buying/contributing to my 403b. Now, I can retire 10 years early if I choose. My pension is frozen and losing value daily.
I have a pension benefit of 200 a month from a job 25 years ago it will still be 200 when I finally retire. @@verasearle7570
It may go down but thats a great time to increase it and it will go up
Wouldn’t it be better to compare $ amounts? Better to take pension contribution to invest or collect pension over time?
Pensions and 401k's act synergistically. My FERS pension covers all of my expenses and will have cost of living adjustments when I turn 62. This gives me very high risk tolerance so I can let my TSP/401k stay in growth funds to beat inflation. My TSP continues to grow exponentially to all time highs despite a 6% annual withdrawal rate (higher than the 4% rule). The pension allows me to ride out bear market corrections. Investors buy the dips, so downturn corrections snap back quickly in modern times.
I like the original “Going In Style” 1979 with George Burns, Art Carney… and Hymin Roth lol 😅
Absolutely it is better!
For me our pension was an absolute ripoff. We were told we could retire at 30 years with the company with full pension. Then the union who runs it ran it into the ground and they took away our 30 and out priviledge as a result. So now I need to work 12 extra years (42 total) to get a full pension. In the meantime, we negotiated our 401k match away to get the pension so I haven't had essentially either for 16 years.
Some units of local government do not pay into the SS system, which could really come back to haunt you unless you work just until the vesting point and then leave for an employer with a 401k or 457 plan that's actively paying into the system. This was a factor in my departure from my last government role (along with below market salaries that made saving for a standalone IRA just about impossible)
I’ve been at my non-union job for over 26yrs now and was grateful that I
Could put money away into a Pre-tax 401k and a Roth 401k plus a pension. This way I’m able to not pay a lot in taxes when I retire and have accumulated so far of well over $1.2million plus I can pass that money down to
My kids which most union pensions you can’t do this let alone the wife get anything after the person dies. Both have its pro’s and con’s but I’ll take an avg of 11-13% on my returns anyday plus the benefit of my Roth 401k on tax savings
Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!
*@lilyhershey1* That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Optimally you have a DB pension , SS and a 401k. That trio does not exist for Generations X , Y and Z except for a small percentage.
Yes a pension is better than a 401K. In addition to my California teacher pension, some of my extra work went into a supplemental pension account which will be about 100,000 when I retire. Even with the windfall provision, I qualify for a decent amount of Social Security. The problem with 401K's is that they can lose value and fees are taken out. Fees are not taken out of my pension. I will also have health benefits in retirement. The average corporate worker is getting screwed.
Someone is paying fees on your pension funds-you get less because of fees (which are likely higher than needed). You just dont see it.
A fundamental difference is that those managing their own investments will on average tend to have money left over, sometimes significant, when they pass or as they approach their late years. This is necessary in order to have sufficient buffer to cover volatility in the profile. Some of this money will feed into the health care system, but some will presumably be passed to family or charitable causes. Beyond the individual impact, I wonder if this will have some cultural or other impact, especially as the people that had to switch to 401k are now approaching later ages, given that the switch to 401k happened around the 80’s.
Government sector plans still use defined benefit plans which is a major reason taxes are so high. In my district, government employees pay 4% to get a gold plated retirement benefit funded by the taxpayer. As a private sector employee I have to pay social security taxes, 20% of my income in 401k then pay super-high local taxes to fund those gold plated pensions for government workers. I am funding 3 retirements, 2 of which are not mine.
My wife has a pension (teacher) and I don't. I like the combination, actually - it allows me a little more risk-tolerance in my investments.
One slight disagreement with your video - as a public school teacher, her salary is considerably higher than what she would get as a private school teacher
Actually...some places offer both the fixed annuity (pension) and 401(k) to those who are grandfathered.
I am among the lucky ones, for now. My employer had backed out of other benefits before.
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
The strategies are tough for average people. They're usually done well by experts with lots of skills and knowledge.