Mcat2, thanks. I appreciate that.
My dad still goes to work every day at 6 or 6:30 am. Heâs 90! He works because he likes having somewhere to go other than his home and the golf course. He travels and dines out a lot but enjoys working as much or little as he wants to.
mcat2, you were full pay for 2 years when your son was at an Ivy, you are not poor !!
You donât have to retire at 65. Warren Buffett is still working.
notrichenough- in the pension I am in the employee contributes 7.5% and the employer contributes 4%. For the past 35 years the fund had an average return of 8.9%. For the last 20 years the fund averaged 8.83%.
HRSmom- yes for the past 20 years the State either missed their required contribution completely or substantially underpaid it. This has lead to a funding problem because not only do the payments need to be made up but the 8.83% earnings have to be also.
On a year to year basis if the normal pension payment was made it was 1% of the budgets that covered the teachers and State workers. Now the pension payment needed will be significantly higher
"Whatâs wrong with contributing to your pension?
This is essentially what SS is, if you like to think about it in that way. Except we pay in 12.4%, and will get 1/2 to 1/3 of what that contribution leads to in the equivalent state pension."
I never really thought about it that way. I figured it was likely that Iâd never see a dime of SS, and that it was to keep all the old folks off the street. Of course, if we lose our pension, and all our savings, we could be some of those old folks on the street, ourselves. I consider it more of a societal necessity, and not the same as an investment.
When folks have more assets than debt, they are NOT poor in my book. In the other hand, ic your debt greatly exceeds your assets, I expect you may have trouble sleeping. MCAT2, you are NOT poor and comparing yourself with others who make differing amounts of money and gave different assets from you is a good way to feel inadequate or superior, depending on who you choose to compare yourself with.
If you figure out how much YOU and spouse spend currently and project how that spending will be in retirement, it gives you a good guestimate of how much you and spouse will need each year in retirement. What others spend and need is beside the ooint.
@notrichenough - to your question there is absolutely nothing wrong with contributing to the pension. There is something very wrong with being blamed for the funding issues however when employees never missed a single payment.
I also find it interesting when I listen to certain financial people say that ss should be privatized and if it was we would receive 3 to 4 times the monthly benefit. In the next breath they complain that NJ public pensions are unsustainable when in fact my pension benefit is not 3 to 4 times what ss will provide and the pension is exactly like what a privatized ss account would be.
â@notrichenough - to your question there is absolutely nothing wrong with contributing to the pension. There is something very wrong with being blamed for the funding issues however when employees never missed a single payment.â
That would enrage me.
âI also find it interesting when I listen to certain financial people say that ss should be privatized and if it was we would receive 3 to 4 times the monthly benefit. In the next breath they complain that NJ public pensions are unsustainable when in fact my pension benefit is not 3 to 4 times what ss will provide and the pension is exactly like what a privatized ss account would be.â
I think that many people do not understand that government employees are contributing so much towards their pension, and also not collecting SS.
Mcat, you canât compare yourself to others. If I compare myself to my brother I would feel under saved. He went to CC on top of that, say that with a smiley. His wife and him has 2 healthy pensions, two healthy 401ks, free health benefits plus other assets and they are a lot younger than my husband and I as a couple. Plus he and my sister were never spendthrift. I was. I only have myself to blame. But I had my fun.
@mcat2, âprops to youâ in the Urban Dictionary:
It basically means proper respect or recognition, although Aretha Franklin in the song makes it a bit more risqué.
Many govt employees also chose to take lower salaries than they were offered in the private sector in exchange for more perceived security AND the pension. It definitely was a factor in deciding whether to work for the govt to switch to another job. The benefits, including the pension were part if the package if incentives to jeep employees working for the govt rather the km an going to higher private salaries. That is not well understood by some who see the benefits as something unearned.
Thanks for sharing your wise words and telling me âI am not poor.â
You can put me in the category of lurker who is amazed by what some on this thread have accumulated. DH and I are not in great shape financially - but know many are worse. At ages 52 and 58 - we have about $140,000 in retirement accounts. At this point - trying to eliminate debt - it seems more realistic to be debt-free in 10 years than to be able to accumulate substantial assets. We will be heavily dependent on SS in retirement. I have a small pension - DH has none. We will try to delay taking SS until age 70. Itâs very depressing when I think sbout it too much.
I think if one has health one has everything. I wouldnât get too depressed.
@tom1944 - In my town there are plenty of teachers collecting $80K+ pensions, who retired in their 50âs with paid-for health insurance. And it was only late in their careers that their contribution reached the level of FICA taxes. Summers off, too. Good for them, they were smarter than the rest of us apparently. 
New employees donât have as good a deal but it will still trounce SS.
The big myth of privatization is that Joe Average would be able to get anything approaching an 8% return for decades at a time.
This may still be true at the high-level, upper management-type levels.
But it hasnât been true for the rank and file for quite a while.
I contribute to ss also.
I agree with you on the return however the pension works because the fund has returned almost 9% over 35-40 year period. Letting the funds be pooled and managed by professionals is far superior to going it alone.
What town are you in and how many is plenty? The average NJ teachers pension is 40K.
You pay into both? But you will only collect one, right? That dampens the return pretty substantially.
In my state, state workers donât pay FICA. How did you guys wind up in that situation?
I never thought I would agree with busdriver11 so much. I think hell did freeze over!
Besides pension contributions and all that, what about pay?
I have two friends that managed money. A few billion⊠Give or take. They both did an excellent job. The markets have been very friendly since1981.
One of my friends is worth $50 to $100 million. I think its closer to $100 million. He is not getting a pension. He is getting a lot of tax deferred benefits. I am sure he has a lot of trusts set up. But no pension.
My other friend, who managed billions worked for the government. She is getting a pension. Itâs a good pension. Pensions are part of the pay package. Itâs deferred compensation⊠If you live long enough.
When I compare what each made, thefe is no comparison. One person is rich. The other one, the govt worker, according to CC standards is poor.
My brother in law was offered the number 2 job at one of the federal agencies. I canât remember if it was one of the agencies Govt Perry forgot in a debate. I do remember the agency though.
My brother in law did not take the job even though the pension was very good. He could make more in the private sector. The pension is better and the pay is better in the private sector.
"I never thought I would agree with busdriver11 so much. I think hell did freeze over! "
Ha! I knew youâd come to your senses one day. 