Pensions!

Of course they do--especially if you're in a union.

My wife and I both have pensions from Los Angeles County. Best decision I ever made was to work for the guvmint.

From what I know, pensions are pretty much a thing of the past. I qualified for one. God help young people, because I do not know what I'd have done without it.

For government jobs, not corporates.

I have one from my current job (large financial services co) but over time they drastically cut the rate of funding and a few years ago stopped new contributions altogether. I’ll be able to take a lump sum of close to $300k but that’s not anything I could live on.

My parents both had them (they worked for the local school district.) Like OP I work for a University and will have to reply on my 401k. I didn't think anyone but govt employees had pensions anymore.

Actors have pensions. I will have quite a nice one from SAG paying out in about 5 years.

[quote] ’ll be able to take a lump sum of close to $300k but that’s not anything I could live on.

I can relate.

I have one from when I worked for a major cosmetic company in the 80s unfortunately it is based on my 1980s salary which is poverty level today. It's better than nothing, fortunately I've always been a good saver so no problems in retirement.

NO ONE has pensions anymore - except government including teachers. College is a mix. Not quite public teacher level - some do, some don’t. In most cases you are better off teaching Grades 1-12 than college.

This is the biggest issue facing Gen X. We are the first without any security for retirement. - in general. We’ve had to save every penny ourselves. And we therefore never know if we will have enough because without guaranteed income, it’s all a gamble.

"NO ONE has pensions anymore."

r9, see r6.

My husband works for the NYC Department of Education as a clinical social worker. Brutal job. And before that he was at an outpatient mental health program. He is getting pensions from both, thank god. The DOE pension is solid. He'll get 60% of his salary plus he's been investing 27% of his salary in a TIA-CREF fund with a guaranteed 7% return. He will--no joke--have well over a million dollars in that account by the time he is eligible to retire. Plus we get health insurance including dental for the rest of our lives.

I know it all sounds sweet, but again - I stress - his job is brutal. And he made shit $$ for years.

Anyway, these are the types of benefits a union can get for you. We so need a resurgence of unions in this country.

Totally agree R11. Kudos to your husband. That’s the trade off kids don’t understand. I work on Wall Street and my brother is a grade school teacher. He will be better off in retirement than I will be. It’s less money - and more frustration, commitment, less freedom - now in exchange for one of the best and safest retirement packages in America.

I retired from state government.... my parents thought I had one the lottery. I was like, they were crazy, because the pay was so low.... Continually moved up in the ranks... still compared to my friends in private the pay was pretty crappy. I ended up retiring at 51. My SS kicked at 62.... gotta say, now I know what my parents were thinking. Most of my friends retirement is not nor will not be close to mine.

People call it "retirement," sometimes (rather than "pension").

I'm still working, but I worked enough years at a government job (that I quit) for my retirement benefits to "vest." My health insurance benefits also "vested." I have to wait until I reach a certain age to collect, though.

Seems like police and maybe firefighters have the best retirement plans, in that they don't have to wait until they're a certain age until they collect. They just need the 20 or 25 years, or whatever the requirement is.

If anyone deserves a pension, it's a fireman.

I went to law school later in life and passed bar at 42, went to work for NYC govt and will have an annual pension at age 65 of $72k a year, it will be more if I retire later. My SS will also be a supplement to this income. Also, my union dues gives me a small annuity of $250 a month (will cover cable and mobile phone). I have been saving in 401k as well. Started my career in corporate world and do not miss it at all. I took at big pay cut with my first city job at $49k per year but in 11 years it has gone up almost 2.5 times, so I am finally feeling good about it all. Check NYC.gov jobs for civil service tests and there are practice test books to buy to study. If you score high you will be called for an interview.....I highly recommend a govt job these days, especially if we go into a recession.

I, too, have a Screen Actors Guild pension. I qualified for a ten year pension by meeting the earnings threshold for 10 of the years I’ve been working. I also have a small one from AFTRA. I’m 47 now and can start collecting (at a reduced rate) at 55 if I choose.

My dad has a SAG and AFTRA pension and two retail clerk pensions from UFCW (southern and Northern California) plus social security...lucky bastard.

They are definitely rare in the corporate world these days.

I worked for the Federal gov't. for 37 years; retired at 58, and now get around $105K/year in pension. No Social Security, though -- we were exempt. (Workers hired after 1983 are under a different system and do get SS, but a smaller pension and a 401(k)-type plan.) My take-home now is actually HIGHER than when I was working, since they no longer deduct things like 7% for retirement, and the big chunk I was putting into the 401(k)-type plan. The only thing they take out are state and local income taxes and my share of the health insurance premium.

I worked 21 years for a larger corporation that had a traditional pension. They also once said lifetime health benefits. They tried to renege on the pensions, and tried to convert us to 401k, and they pulled back the full health benefits. A class action suit followed and they had to give us a choice, the standard pension, or 401k plan. No lifetime health benefits. Everyone that was to receive the pensions would of lost substantial amount of money converting to 401k, so everyone selected the pension. I am eligible now to get a lump sum of over $200k, with still a monthly check off about $2k. If I take it at my 65 retirement, I get an larger payout of both lumpsum and monthly payment. That plus $2800 in SSA, and with what my partner will get, we will live comfortably, better off then most. Combined, our monthly intake will be around $6k. Plus my$200k+, and his 100k 401k. Don't forget, you will have to pay for your Medicare supplemental. Pray for universal health Care. We have our little rambler house, and our 40 year old not-so-fancy backgammon board. Aldi's and Lidl nearby. We shall be content.

R19. I live very simply. I am lucky to have enough for basics with some extras from time to time...so many have literally next to nothing, sad

[quote]my parents thought I had one the lottery

well, they sure didn't think you had won a spelling bee

Lucky bastards. I'm going to drop dead at my desk before I can retire.

[quote] R11: He'll get 60% of his salary plus he's been investing 27% of his salary in a TIA-CREF fund with a guaranteed 7% return.

I think you’re mistaken about “guaranteed “. I can’t imagine a company guaranteeing any rate of return. Isn’t it illegal to do so?

I had two pensions, but both my companies converted them to a cash payout at some point. That’s worked out fine. I invested it, and did as well or better than I would have as a pension.

I have one but I am the only one of my friends (apart from work) who does. I will end up with 40% of my salary, plus 401k and Social Security. If the planet survives I will have more money when I retire. But for recent hires they have to wait longer for benefits.

Again with all the millionaires on DL.

By "pension", do you mean the old-fashioned defined benefit kind, where you retire after x years and get y% of your salary? I think those are mostly gone except for governments.

But many organizations - universities, too, which is why OP's comment surprises me - have 401k or 403b (for non-profits) plans that they contribute to. My university employer puts a percent of my salary in the plan as well as matching what I contribute up to a certain percent. It's not as generous by any means as a government pension, but it's not nothing, either.

Do most large corporations not even offer a 401k plan for their employees to allow them to save for retirement? If they do offer such a plan, do they contribute nothing themselves?

R23, I’m not mistaken. See link,

[quote]I’ll be able to take a lump sum of close to $300k but that’s not anything I could live on.

If you don’t know how to make $300k last in retirement then you don’t know how to manage money.

[quote]Again with all the millionaires on DL.

I know - they’re all so full of shit (i.e. “I can’t live on $300k! Whatever shall I do?!”).

Thank you, R28. I am surprised.

My Dad got a sizeable pension (plus a large lump sum) from Proctor & Gamble, but he worked for them here in the UK.

It passed to my Mother after his death 20 years ago, she gets about £40,000 ($55,000) a year, inflation linked.

Public pensions in this country are notoriously underfunded and we are thisclose to a crisis-- either taxpayers will have to take on an enormous additional burden (more than $30,000 per worker), governments will have to slash benefits, or both. Detroit reduced retirement benefits as part of its bankruptcy in 2015 -- it won't be the last.

r30 I have the opposite "problem." I have trouble figuring out how to spend my money. I've been thrifty (if not miserly) all my life, and now I have WAY too much money. I obsess over spending it and I have no idea why.

I have one, and I work for a privately owned hospital.

Jealous, bitches?

I’m curious if we will see a way wave of bankrupt pension plans. There is a federal Pension Benefit Guaranty Corporation that backs up pension obligations when companies go bankrupt. But don’t think that applies to all state and local government pensions. It’s crazy that the federal government takes on corporate obligations for pensions after private equity strips every penny for themselves.

No pension here - have to pray my money lasts. The 401k fraud pulled by the Republicans in the 80s ensured that most of us will never feel secure in retirement. We are supposed to save millions from our measly paychecks - even a million is more than most will ever have. I think the average is less than $100 thousand. While the government cuts taxes on the rich and corporations and borrows billions to cover the cost.

$300k is nothing. Trying to cover medical and all your regular expenses and not drain that really fast.

R21: My bad... one=won...

$300,000 would have been fine if received and invested in 1984,1989, 2004, or 2009. At the end of any recession where you could earn returns for years. If you earned 10%, plus, let me just guess, $20,000 from Social Security, plus, let me guess, $10,000 from savings, perhaps. That’s $60,000 and I could live off that.

Now is probably not the best time to receive the same pension, though, if a recession is coming.

Do state government jobs still offer pensions to newly hired workers?

Most government contracts have shifted people to 491k type plans. Even teacher contracts are slowly losing defined benefit pensions.

If any of these underfunded pension plans fail and the gov't takes them over they will cut benefits by half to keep them afloat.

I had two pensions. One was big enough to cash out, the other is a mere pittance.

I rolled-over the cashed-out pension proceeds to an existing traditional IRA nine years ago. It continues to perform nicely.

R1 I belong to the CWA (Communications Workers of America). Verizon does not offer pensions to New Hires. 401K is the new pension.

R42, this happened to my new neighbor. Her pension plan went bankrupt and was taken over by some insurance fund, and then that went bankrupt too. Now she gets some gov't funded thing, and she said it's less than half what her (deceased husband's) pension was.

Sadly, if you use $300,000 as your principal and try to live off the interest / earnings, at best you would have $15,000 per year to live off of (5% of $300,000). If you have a paid-off house, that would improve the situation, but that's still cutting it close.

I have a pension and plan on taking the lump sum when I retire to avoid the threat of a reduction in my pension.

R48, 5%? seems like that’s more like the yearly average worst case scenario.

Over the last ten years, my savings have grown an average of 12.5% per year, [italic] after [/italic] I’ve already lived off part of the income.

People can still contribute to IRAs if they want to. The limits are relatively low, but you can still do that. Also, some private employers have deferred comp plans as well.

I wish I had started earlier with IRAs & wish I had contributed more, when I could, to deferred comp. Alas ...

I realize not everybody can afford to contribute to IRAs / deferred comp. Just trying to put ideas out there.

I thought you could not contribute to an IRA if you have a 401k plan available to you? (Aside from a Rollover or backdoor ROTH contribution.)

And you pay taxes on the gains on your investments. There are some people here who will have a major wake up call at some point. Anyone who thinks they can count on high single-digit returns routinely are delusional.

Think of what happens in a market downturn, such as accompanies a recession. Investors see flat or negative returns for a series of years. They have to draw down on the principal...so that $300k becomes much less.

I encourage everyone to take advantage of any resources, such as large companies make available, to model your financial needs in retirement. They can run hundreds of scenarios so you are prepared for the worst.

There are a lot of unrealistic assumptions being made here.

401k’s can’t get taken away, can they?

What is the best thing for me to do to plan for retirement and/or way for me to get interest on the money I save?

Basically most of us will not have enough for a secure retirement - because we don’t have the guaranteed income of pensions. We’ve been forced to gamble our retirement in the stock market - making money for financial firms. And if the market tanks, we are screwed.

Reverse Mortgage for me!

R54, if it feels like gambling, you should hire a professional money manager. Someone should balance risk against reward. Gambling is random, though weighted so the house wins. Investing isn’t like that.

[quote] R53: 401k’s can’t get taken away, can they?

Not usually. In most cases, you can be sued and lose everything else, but they can’t touch your 401k.

[quote] R53: What is the best thing for me to do to plan for retirement and/or way for me to get interest on the money I save?

If you are not familiar with mutual funds, I would recommend you hire an advisor. Meanwhile, you should try to learn as much as you can about stocks and bonds and mutual funds. It’s a lifelong project, and I have made a lot of mistakes. They’re all learning experiences. My friend is more comfortable with real estate instead, which is fine. Whatever you are comfortable with.

It’s really important to be diversified. Spread your money around many investments, in case one tanks.

Don’t invest your 401k stock in your employer, except whatever sum they might match. The reason is, in case the business fails, you would lose your job and your savings, a disaster! And, you want to be diversified.

Avoid gold and other metals.

We are entering a funky period, I mean the next year, where I personally think the stock market may drop. A 20% or 30% drop would hurt, but not be a strange thing. Some young people in particular may have not really witnessed a bear market. They are painful!

I have a pension from a career in government. Also have smaller traditional IRA and a tax deferred saving accounts. I'm sorry I didn't also put savings into a Roth IRA (you deposit after-tax dollars and don't have to pay taxed on it when it's withdrawn). Also have some real estate investments. Most of my assets are not liquid, I still live on a fixed income. My real estate is the only asset that will grow but I'm not seeing much profit at this point.

I feel very grateful and fortunate. I'm not rich and am concerned about the possibility of eventual failing health and the expenses that incurs, but for now I live comfortably but not lavishly.

If I have regrets it's that I didn't start planning earlier. I'm an advocate of multiple ways to save for retirement. Real estate, IRAs, pension (if you can get one), 401K plans, etc. Don't put your eggs into one basket. Diversify.

Be careful in hiring a "professional" money manager. They are skilled at being nice while separating you from your money. If you go to one, find one that charges by the hour or a flat rate.

300K would get me through 2 winters in Saas Fee then I'll ski off a cliff.

The best thing I did with my retirement funds was to move 60% into a Roth IRA I paid taxes up front on the amount but this money and all future earnings are tax free. The amount has tripled and withdrawals are not subject to federal and local taxes.

General Electric and Verizon sold their Management pension plans to Prudential Life Insurance.

R6, if all you have is $300,000, you go to Santa Fe, not Saas Fee.

A professional money manager is not going to save you from losing money in the stock market in the next 2 years. And you could even lose money in bond funds if interest rates go up. There is very little “safe” right now. No one should be counseling to invest in the market right now.

R64, then a pro would tell you that, right? In theory, I mean.

Most “pros” are looking to make money for themselves by buying and selling stocks and investments with your money (which they get paid for - from your money). It’s a rare adviser who is fee based. And the good ones are not advising people with $100,000. You can study intensively or try to find a trustworthy adviser, but at the end of the day, it’s one step removed from gambling because no one can predict the future.

It’s not gambling, but it’s been a long game for me, meaning it’s something I’ve done over the entire course of my life, to make enough to coast on.

All of life is unpredictable, but we don’t call it gambling. I emphasize this because there are people who literally throw money into the market on a poorly performing company, and cross their fingers. Then, the company goes bust. Well, that is gambling, but it’s not the best way to “invest” in the stock market.

There are plenty of younger advisers looking to build a portfolio.

Close to 20 years ago I met mine. He was calling as part of the financial arm connected to my credit card. Turned out, his dad was a successful wealth manager and he was looking to gain experience and build a client base before joining his firm, and dad had instilled in him that you do right by your clients and you’ll have them for life.

R60, Santa Fe, Indiana.

Everyone has different experiences. I’ve had 3 advisers with major firms - none of whom did anything worthwhile, all of whom lost money in the downturn like everyone else. No investment “strategy” can match a pension - guaranteed income until the day you die.