Do you/will you have a pension?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Do you/will you have a pension?

Yes
214
63%
No
125
37%
 
Total votes: 339

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mptfan
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Do you/will you have a pension?

Post by mptfan » Sat Jan 02, 2010 12:57 pm

Do you, or will you, have a pension in retirement? For purposes of this question, social security retirement benefits are excluded from the definition of pension.

Sam I Am
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Post by Sam I Am » Sat Jan 02, 2010 1:08 pm

Message deleted.
Last edited by Sam I Am on Wed Oct 09, 2013 12:24 pm, edited 2 times in total.

neverknow
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Post by neverknow » Sat Jan 02, 2010 1:08 pm

..
Last edited by neverknow on Mon Jan 17, 2011 7:55 am, edited 1 time in total.

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market timer
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Post by market timer » Sat Jan 02, 2010 1:57 pm

Yes, will buy a SPIA.

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mickeyd
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Post by mickeyd » Sat Jan 02, 2010 2:05 pm

Yes, I have two DB plans and DW has one.

These vehicles do most of the financial heavy lifting around here.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

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Sheepdog
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Post by Sheepdog » Sat Jan 02, 2010 2:26 pm

I voted yes, but ..... When retiring in 1998, I did have a pension worth $225,000. I took the cash option, and rolled it over to an IRA. I take an income stream from that IRA now.
Jim
Just because it isn't your fault doesn't mean it isn't your responsibility....Josh Reid Jones

MWCA
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Post by MWCA » Sat Jan 02, 2010 2:39 pm

Yes, but not inflation adjusted.

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Adrian Nenu
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Post by Adrian Nenu » Sat Jan 02, 2010 2:43 pm

My pension will be 75% of my highest 5 years' pay average with 3% annual COLA. As a member of the Florida Retirement System, I can start collecting in 3 years at age 48.

Adrian
anenu@tampabay.rr.com

sport
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Post by sport » Sat Jan 02, 2010 2:52 pm

neverknow wrote: it will amount to $205 a month, come Sept. You tell me - will that pay your light bill? It might pay mine, in this year only. There is no inflation adjustment.
My pension is all of $65/mo and no COLA. Wanna trade?

Jeff

Triple digit golfer
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Post by Triple digit golfer » Sat Jan 02, 2010 2:56 pm

Adrian Nenu wrote:My pension will be 75% of my highest 5 years' pay average with 3% annual COLA. As a member of the Florida Retirement System, I can start collecting in 3 years at age 48.

Adrian
anenu@tampabay.rr.com
Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!

AlwaysaQ
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Post by AlwaysaQ » Sat Jan 02, 2010 3:09 pm

I receive a pension but took quite a hit because I retired at 54 instead of the usual 65.

DSInvestor
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Post by DSInvestor » Sat Jan 02, 2010 3:17 pm

jsl11 wrote:My pension is all of $65/mo and no COLA. Wanna trade?
$65/month is $780/yr. It helps. It's not 78K/yr but it still helps reduce your withdrawal rate. I'm not getting any pension so I'm envious of anybody who has one.

jstat
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Post by jstat » Sat Jan 02, 2010 3:18 pm

Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!
Adrian is in law enforcement, which has more generous pensions than most public service jobs.

If I retire at age 60 with 25 years of service, my federal pension will be approximately 25% of my salary.

Triple digit golfer
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Post by Triple digit golfer » Sat Jan 02, 2010 3:20 pm

jstat wrote:
Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!
Adrian is in law enforcement, which has more generous pensions than most public service jobs.

If I retire at age 60 with 25 years of service, my federal pension will be approximately 25% of my salary.
That's an infinite percentage more than the pension I'll be getting.

Any pension is awesome, in my opinion.

Paladin

Post by Paladin » Sat Jan 02, 2010 3:25 pm

Triple digit golfer wrote:
jstat wrote:
Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!
Adrian is in law enforcement, which has more generous pensions than most public service jobs.

If I retire at age 60 with 25 years of service, my federal pension will be approximately 25% of my salary.
That's an infinite percentage more than the pension I'll be getting.

Any pension is awesome, in my opinion.
Awesome and probably unsustainable. Promises have been made which probably can't be kept.

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Adrian Nenu
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Post by Adrian Nenu » Sat Jan 02, 2010 3:27 pm

Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!
There is one small catch - in Florida, you have to work in a jail/court, prison and/or patrol for at least 25 years dealing with the scumbags of society to get the high risk pension. Not many people can "hack" it (pun intended).

Personally, I think such pension benefits are unsustainable in the long term. Pension payouts and COLAS will have to be cut and contributions increased. That's the reason I am saving and investing - to have a Plan B in case my pension benefits are reduced.

Adrian
anenu@tampabay.rr.com
Last edited by Adrian Nenu on Sat Jan 02, 2010 3:32 pm, edited 1 time in total.

Triple digit golfer
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Post by Triple digit golfer » Sat Jan 02, 2010 3:29 pm

Adrian Nenu wrote:
Government workers shouldn't even be on investment forums. There's really no need to invest any of your own money. Retire at age 48 with 75% of your salary and guaranteed raises. Must be nice!
There is one small catch - in Florida, you have to work in a jail/court, prison and/or patrol for at least 25 years dealing with the scumbags of society to get the high risk pension. Not many people can "hack" it (pun intended).

Adrian
anenu@tampabay.rr.com
Scumbags? Be nice! You probably see those people more than your own family! :)

gailcox
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.

Post by gailcox » Sat Jan 02, 2010 3:31 pm

Hopefully, the airline that I have worked for for the past 26 years will keep our pension. When I take it, it will be based on my best 48 consecutive months of flying, out of my last 60. So I am trying to increase my flying now to see what this feels like! I knew the value of my pension when our company was trying to get our vote to replace it with a company match to our 401k!

gail

jstat
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Post by jstat » Sat Jan 02, 2010 3:33 pm

Any pension is awesome, in my opinion.
I agree. Just wanted to point out that not all government pensions are equally generous. In my case I could get by with pension + social security, so my investments represent a margin of safety/luxury.

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Sally
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Post by Sally » Sat Jan 02, 2010 3:35 pm

Wow, you must be talking about some other government than the one with which I am familiar. What country? The US fedral pension rates are not nearly that high for feds, nor can they retire at age 48 unless active duty military or they become disabled.

That may be the perception but it sure "ain't" reality! Though I WISH that that was the case!

:lol:
:cry:
:lol:

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Adrian Nenu
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Post by Adrian Nenu » Sat Jan 02, 2010 3:46 pm

Hopefully, the airline that I have worked for for the past 26 years will keep our pension. When I take it, it will be based on my best 48 consecutive months of flying, out of my last 60. So I am trying to increase my flying now to see what this feels like! I knew the value of my pension when our company was trying to get our vote to replace it with a company match to our 401k!

gail
Gail, I wish you the best retirement possible. Here is a documentary about the United Airlines pension fund and the company bankruptcy. I hope and pray that you never have to experience what the folks in the documentary went through:

http://www.pbs.org/wgbh/pages/frontline ... ment/view/

Adrian
anenu@tampabay.rr.com

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6miths
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Post by 6miths » Sat Jan 02, 2010 3:54 pm

Definitely no pension here. On the bright side, don't have to worry about thinking I have one only to see it evaporate!
'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so!' Mark Twain

Wagnerjb
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Post by Wagnerjb » Sat Jan 02, 2010 3:54 pm

Have worked for the same large cap company for 26 years now, have another several years to go. Will take the lump sum when I retire, like well over 95% of my colleagues. I plan to give consideration to buying an immediate annuity at that time. I will probably wait a few years (I will make this determination when I analyze the situation in more depth at that time), and I won't invest the entire amount in immediate annuities.

My wife worked for the same company for 14 years, and her pension will be much more modest (5% of the value of mine). We will take the lump sum for her too.

Best wishes.
Andy

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OAG
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Post by OAG » Sat Jan 02, 2010 3:58 pm

We have one (military); an old one too since in 2010 it will be the 31st year of benefits but it does include a CPI based COLA and Health benefits (would be 3 if OP had not excluded SS - which we both receive). I also receive a smaller Veteran's Disability payment, but I generally do not count that as a second "pension"). We also are/will receive IRA RMD's starting in 2010 and 2011 however I assume the OP did not want to include these either. We also have individual ROTH IRA's that we do not foresee using (except as possible emergency funds).
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.

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VictoriaF
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Post by VictoriaF » Sat Jan 02, 2010 4:01 pm

6miths wrote:Definitely no pension here. On the bright side, don't have to worry about thinking I have one only to see it evaporate!
John,
As a Canadian you have all your bases covered, anyway. And it is not just by the snow :)

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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catdude
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Post by catdude » Sat Jan 02, 2010 4:04 pm

Yes, I work for a local government and I'll be getting a pension when I retire (as I hope to) in six months. I'll be 55 and I'll get about 1/3 of my final salary after 20 years of service. I thank God every day for my pension.
catdude | | All generalizations are false, including this one.

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camper
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Post by camper » Sat Jan 02, 2010 4:15 pm

I also hope the pension will be there when I retire. I am eligible at age 49. That is still 21 years away though.

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VictoriaF
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Post by VictoriaF » Sat Jan 02, 2010 4:17 pm

Triple digit golfer wrote:
jstat wrote:If I retire at age 60 with 25 years of service, my federal pension will be approximately 25% of my salary.
That's an infinite percentage more than the pension I'll be getting.

Any pension is awesome, in my opinion.
A pension is not a "yes" or "no" function, but rather how much. Let's assume that a government employee makes $80k during his highest earning years and retires with a 25% pension of $20k at the age of 60. The same amount could be derived from a $425k inflation-indexed SPIA. Note that the SPIA premium could be smaller when the interest rates are higher. If interest rates were over 5%, the premium would be closer to $300k. But let's continue with the $425k example.

During the same 25-year time period, a private sector employee was making $16k per year more and putting it away, which in 25 years amounted to $400k. For simplicity, I assume that any compounding of the $16k went towards paying extra taxes. A $16k pay differential is quite realistic in my experience, except that it may be something like 20-30% difference rather than a fixed-amount difference.

These two hypothetical employees would have an identical annuity income at the age of 60. The differences are:
1. The private sector employee did not have assured employment.
2. The public sector retiree is eligible for a federal group medical insurance.

Difference-1 is a problem during a recession as we have now, but in the 1990s, private sector employees (particularly in the technology field), were quickly moving between jobs getting ever higher pay.

Difference-2 will disappear when everybody gets access to reasonably priced medical insurance.

Victoria
Last edited by VictoriaF on Sat Jan 02, 2010 4:28 pm, edited 2 times in total.
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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norookie
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Post by norookie » Sat Jan 02, 2010 4:18 pm

Adrian Nenu wrote:My pension will be 75% of my highest 5 years' pay average with 3% annual COLA. As a member of the Florida Retirement System, I can start collecting in 3 years at age 48.

Adrian
anenu@tampabay.rr.com
:lol: :lol: Thats just criminal! J/K :lol: ya' Adrian. Its really something thats been going on here in MA for decades. Attain a public service job asap, retire in your 40s (in Ma) doing your min time required-(my friend did @ 43) and get another public service job w/another pension because of your 'connections'. Now because of state shortfalls the state is trying to reduce thier health insurance to simple state health insuance. Unions going to court!. If ya can Good Luck! -just sayin-
Last edited by norookie on Sat Jan 02, 2010 4:20 pm, edited 1 time in total.
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Paladin

Post by Paladin » Sat Jan 02, 2010 4:19 pm

VictoriaF wrote:Difference-2 will disappear when everybody gets access to reasonably paid medical insurance.Victoria
Hi Victoria...when do you see that happening? I don't see it happening any time soon.

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Post by Ron » Sat Jan 02, 2010 4:28 pm

The company I retired from eliminated their defined benefit (pure pension, with monthly check) and replaced it with a cash balance plan, along with the 401k plan, many years ago.

When I retired (early '07), I had the option to convert the cash balance into a annuity (via a 3rd party company supplied by the company), or take the lump sum.

I took the lump sum, found a company on my own (which had better rates and policy conditions), took 75% of the balance and purchased a SPIA (fixed payment) and invested the rest (along with my 401k) in a rollover IRA.

- Ron

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BruceM
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Post by BruceM » Sat Jan 02, 2010 4:33 pm

Ok, here's one for those who get annoyed at former Government worker's pension benefits.....

The Military is (or used to, I haven't checked to see if this method of determining retirement benefits has changed since 2000) without doubt the best place to retire from.

The retirement benefit is (or was) 50% of ones top 3 years of base pay (usually the final 3 years), rising 2.5%/yr of service after 20, up to a max of 75% of the top 3 base pay years at 30 years. This benefit begins immediately, regardless of age, and is inflation adjusted each year, using the SS inflation factor...or at least mine is. As an example, an E-7 retiring in 2008 at age 38 after 20 years of service, would be eligible for an immediate pension benefit of about $1,750/month for life, indexed annual for inflation, assuming no surviving spousal benefit and assuming the pension is calculated the same way as it has been in the past.

I've been asked to speak at local ROTC meetings on topics of personal finance as relate to the military, and I have always preached that the military's retirement benefits are simply second to none...there is no civilian equivalent that I've ever seen....and when combined with the disability and health benefits and then added to base pay, the total benefit looks much better than base pay alone, which is what usually is quoted as one's salary.

Out of curiosity, are there any private company pensions out there whose annual benefits are adjusted for inflation? I've never heard of one, but I'm always on the lookout to see if I can find one.

BruceM

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Post by Triple digit golfer » Sat Jan 02, 2010 4:37 pm

VictoriaF,

Where are you getting this $16k from?

From what I see, based on skill levels, government workers are paid much higher than private sector workers.

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VictoriaF
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Post by VictoriaF » Sat Jan 02, 2010 4:41 pm

Paladin wrote:
VictoriaF wrote:Difference-2 will disappear when everybody gets access to reasonably paid medical insurance.Victoria
Hi Victoria...when do you see that happening? I don't see it happening any time soon.
Hi Paladin,

Sooner or later medical insurance payments will equalize. But even if that takes a while, in my hypothetical example, the private sector employee would have to wait only five years before becoming eligible for Medicare.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

S&L1940
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Post by S&L1940 » Sat Jan 02, 2010 4:42 pm

I registered my NO yet I have a son who is moving up to an administrative position in the NYC school system (where his wife already has a post) so they are set for a very comfortable retirement life. as long as NY's money holds out
Another son has worked social service (mentally challenged adults) in VA for 20+ years and will get a small percentage of what his brother will pull down.

here in south Florida NY fire, police and teachers live the good life. no envy, pure admiration as they get more in retirement than they earned in their working years.

next time around I either work for Goldman Sachs or teach 3rd grade math (my capability limit)

Rich

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VictoriaF
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Post by VictoriaF » Sat Jan 02, 2010 4:53 pm

Triple digit golfer wrote:VictoriaF,

Where are you getting this $16k from?

From what I see, based on skill levels, government workers are paid much higher than private sector workers.
Triple digit golfer,

I used to work for a high-tech company, and I know the difference in my base pay. And I still remember the bonuses I was getting in the 1990s. In my field, many contractors are making much more than federal employees performing the same work.

You are making an important emphasis on the skill level, but the answer is not the same for different skills and different skill levels. Some federal positions do indeed pay pretty close to the market rates. In professional positions there is always a lag. The pay of a federal lawyer or doctor does not come even close to the private-sector one. A member of the Senior Executive Staff (SES) is paid a fraction of the pay of a business executive with the same level of responsibility.

One can rely on the personal experience, anecdotal evidence, or publicly available information. For example, based on Government Executive,
Federal Salary Council wrote:The pay gap between public and private sector workers increased from 25.17 percent in 2008 to 26.42 percent in 2009.
You can argue about the validity, assumptions, intangibles, etc. But my point still holds.

Victoria

EDITs:
1. Corrected a typo in the sentence "The pay of a federal lawyer or doctor does not come even close to the private-sector one." It was erroneously saying "public-sector."
2. Added a quote from the Federal Salary Council.
Last edited by VictoriaF on Sun Jan 03, 2010 11:25 am, edited 1 time in total.
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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jh
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Post by jh » Sat Jan 02, 2010 4:57 pm

...
Last edited by jh on Tue Mar 30, 2010 10:58 am, edited 2 times in total.

MWCA
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Post by MWCA » Sat Jan 02, 2010 5:06 pm

Anyone know what the state of CA pension is like for a desk jockey? Just curious.

stevenst
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Post by stevenst » Sat Jan 02, 2010 5:08 pm

Like many, my pension was converted to a cash balance plan, with a defined benefit option. Right now the DB is very generous compared to the cash balance. Who knows what it'll be when I get there.....

@ BruceM, regarding military pensions: Whenever I attempt to give my brother a hard time about his retirement at age 38, followed by a second career, he asks:

'Do people shoot at you at work?' :shock: :)

dcd
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Post by dcd » Sat Jan 02, 2010 5:17 pm

I retired at age 57 with 35 years in the Florida retirement system in public education. I received approx 50% of my average high 5 years with a 3% annual cola. The pension plus Social Security allows me to keep my hands of my investments and let them grow. Hopefully I'll be able to leave something for my kids when I croak.
Denny

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Adrian Nenu
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Post by Adrian Nenu » Sat Jan 02, 2010 5:18 pm

Thats just criminal! J/K ya' Adrian. Its really something thats been going on here in MA for decades. Attain a public service job asap, retire in your 40s (in Ma) doing your min time required-(my friend did @ 43) and get another public service job w/another pension because of your 'connections'. Now because of state shortfalls the state is trying to reduce thier health insurance to simple state health insuance. Unions going to court!. If ya can Good Luck! -just sayin-
For the record, I am totally against "double-dipping". It should be illegal. I am going to stop from further comments on this practice because of the inevitable political content.

Adrian
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mbres60
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Post by mbres60 » Sat Jan 02, 2010 5:23 pm

yes - my dh will have pension from federal gov't and I will have a pension from part time work from a private company but no cola's for me so ultimately it may be lunch money.

retiredjg
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Post by retiredjg » Sat Jan 02, 2010 5:33 pm

Triple digit golfer wrote:Scumbags? Be nice! You probably see those people more than your own family! :)
Right. That's the problem.

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teacher
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Post by teacher » Sat Jan 02, 2010 6:12 pm

Sam I am wrote:
I hope to be able to take a lump-sum distribution in lieu of an annuity.
Sheepdog wrote:
When retiring in 1998, I did have a pension worth $225,000. I took the cash option, and rolled it over to an IRA. I take an income stream from that IRA now.
Wagnerjb wrote:
Will take the lump sum when I retire, like well over 95% of my colleagues. I plan to give consideration to buying an immediate annuity at that time.
Now I am confused. Our CPA said we would have to pay taxes on the lump sum if DH chooses it over a pension. That would put us in the 44% tax bracket. With what would be left after taxes, DH would only have to live 7.5 years to make the pension the preferred choice. Now it appears almost everyone chooses the lump sum and it can be rolled over to an IRA presumably tax free. What am we missing? Or is the CPA flat wrong?

retiredjg
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Post by retiredjg » Sat Jan 02, 2010 6:28 pm

teacher wrote: Now it appears almost everyone chooses the lump sum and it can be rolled over to an IRA presumably tax free. What am we missing? Or is the CPA flat wrong?
Sounds like a miscommunication or a communication without adequate facts.

Obviously anything rolled over into a traditional IRA will not trigger taxes.

Maybe you guys need to have this conversation again. You may have been talking apples and oranges. Or maybe there is no option in your husband's plan to roll to an IRA. If not, seems to me a lump sum would be heavily taxed.

Harold
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Post by Harold » Sat Jan 02, 2010 6:46 pm

stevenst wrote:Whenever I attempt to give my brother a hard time about his retirement at age 38, followed by a second career, he asks:

'Do people shoot at you at work?' :shock: :)
Has he ever asked a 7/11 cashier in South Central L.A. about their pension benefits at early retirement?

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teacher
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Post by teacher » Sat Jan 02, 2010 6:51 pm

retiredjg wrote:
Maybe you guys need to have this conversation again. You may have been talking apples and oranges. Or maybe there is no option in your husband's plan to roll to an IRA. If not, seems to me a lump sum would be heavily taxed.
I will call the CPA Monday to get clarification. I think we better call the HR department too to find out if his plan has an option to roll to an IRA.
Amazing. If I hadn't been lurking around on this forum this cold Saturday afternoon, I would not have questioned what we both think we heard her say last Monday. This is not the first time this forum has had a huge impact on our financial well-being. Thanks, retired jg.

tim1999
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Post by tim1999 » Sat Jan 02, 2010 6:51 pm

No pension, but an unusually good 401k match/company contribution. I've probably got at least 30 years to retirement. I'm not counting on social security paying out at the current level when I'm retired. I leave it out entirely from any retirement calculations that I do.

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JMacDonald
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Post by JMacDonald » Sat Jan 02, 2010 7:01 pm

1530jesup wrote:next time around I either work for Goldman Sachs or teach 3rd grade math (my capability limit)

Rich
Hi,
As a third grade teacher, I can assure you it is much more difficult than it sounds. :D
Best Wishes, | Joe

bluto
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Post by bluto » Sat Jan 02, 2010 7:06 pm

I will need to buy back the last few years I've been overseas (with no pension), but yes, I'll have a state pension, though I do expect cuts and the minimum age to be pushed back.

If things stay the same, I'll be able to retire at 53, with a pension that will return >50% of my highest 3 years of salary. I really should know more about the details of the pension system... I guess I can make that a resolution.

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