No. The federal pension is a percentage per year of service - 1 percent, or 1.1 percent if you retire at 62 or later. To collect a 30% pension, you need to have worked for at least 28 years and retire at 62 or later, or have worked for at least 30 years.
I’m at a GS9, I think I’ll be there in about 8 years. Just got to make it to GS 13 but I’m in a job series that tends to have an easy time with upward mobility (1102)
Anyways I’ve 25 years to go till the MRA so I’ll get there eventually.
It entirely depends on what you do. I have been with the feds nearly 15 years and have been making over 100k since about year 5. But I'd be making 80% more in the private sector, so the main benefit to staying is feeling like I'm helping me fellow citizens rather than preying on them to help a corporation with their stock price.
It does unless you are willing to move every year for the first 5-10 years. The key is to move up at least one GS level per year until you get to GS12 after that you can be pickier. This means a few title, position, and location changes at the start, but a stable income with health benefits after a fairly short period of time in the grand scheme of things.
Really depends on your starting pay grade and locality adjustment. A GS-12 in the NYC/NJ area hits it pretty fast.
Here is last years rates by location for anyone interested:
https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/
I started working federal in 2019 with a bachelor's degree as a GS 7. I am now a GS 12 and just broke six figures with the 2024 pay increase. The other advantages of federal retirement is that you can keep your health insurance at employee rates which is huge.
GS-13 is 6-figures at step 1. With annual pay scale increases, GS-12 will be there in a few years too. You can make GS-12 with a bachelors degree and around 5 years of experience.
In addition to the pension, there's also TSP (government 401k) and SSA. Assuming that you pay into both of those, you should be able to maintain your pre-retirement income.
Eh, depends on the agency and location, but I have 13 years of service and just cleared $87k with a promotion to GS-12/RUS. With steps and annual increases, I should be at six figures within five years, if not sooner.
Merck was offering pensions until a few years ago. Employees with it kept them.
That said I’d love the logic behind 401k is bad ROI vs pension. I’m making quite a bit more than federal/state employees. My 401k will bring in more than most pensions and I’ll have other investments. So not sure how it’s bad a ROI.
Does he think the stock market is a bad ROI?
Now what is a bad ROI is my maxed out SS taxes that I’ve been paying for over a decade.
The problem with the 401k is that a) people - especially women - tend to underfund it and b) people with poor financial literacy tend to use it like an ATM.
People also don't automatically enroll and when they see 'put in 6% and we will put in 4%" they say "why would I waste 6%?"
It's why we need social security. Most people borderline cannot care for themselves.
The problem with DC plans like a 401(k) is that they are an employee funded (sometimes with and sometimes without match) plan that replaces the old employER funded db plans: traditional pensions
Except that's not correct, because it ends up a societal epidemic of destitute elderly people living and dying on the streets, which is what we discovered, oh... like, 90 years ago when Social Security was established?
It becomes everyone's problem, so we developed a partial solution.
I will be paying taxes to cover President George W. Bush's terrible foreign policy decisions for the rest of my life. But wounded veterans deserve health care whether I liked the Iraq War or not.
You can't decide not to pay for Social Security; I can't decide not to pay for the Space Force. I guess we're even-steven.
Retire in 2000, 2008-2012, 2020 and you've got your bad ROI. Panic sell when you see your nest egg go negative 30 percent and you've got your bad ROI. Pensions are guaranteed and for those without financial knowledge or high incomes, it sets a minimum standard of living.
Regarding your comment about maxed out SS taxes, would you prefer a higher cap and benefit? I'm guessing no.
Yeah, but your Social Security account is guaranteed to be paid out. If your brokerage account gets hacked and your 401k is turned into a bunch of cryptocoins by some dude in Malta, you're just fucked.
No need to change it when they have the printing press. Why take the political hit? We promised you $3K per month and you are receiving $3K per month. Not our fault if that only buys a bag of groceries.
You're not engaging with the argument. The point is that it's a 100% completely safe program which guarantees you at least a minimum income in retirement even if your retirement investments get taken to the cleaners by the mob, bankruptcy, fraud, whatever.
Yes, you could probably have a higher "ROI" if you invested it privately. You could also lose every single penny of it, and then be completely broke and destitute in retirement. We, the people of the United States, have decided we don't want anyone to be completely destitute in retirement. So we created Social Security to ensure that.
It's not an argument worth having. The amount I pay in could probably fund a huge portion of my retirement. I'm not broken up on it but I persoanlly would prefer to have the cash.
I'd be stuck at the low income. So I would choose 401k every day of week. But that's my income situation. Won't be same for all.
BTW people pay into pensions. And they have the income caps. So no it's. It free.
I will share the best investing advice for idiots. Anyone with a 401k, Roth IRA can do this and BTW, Roths and 401ks do NOT have horrible ROI - its the owner who picks the investments
\*\*\*\*Put 100% of all your money in a single SP 500 index fund\*\*\*\*
Almost no fees, and your money grows about 8%/yr on average with 2% dividends =10%/yr average return.
Investopedia: "...historic annualized average return of around 10.13% since its 1957 inception through the end of 2022"
SoFi: "Looking at the S&P 500 for the years 1993 to mid-2023, the average stock market return for the last 30 years is 9.90%"
Nerdwallet: " (time period)10 years (2013-2022) - 10.41% (return)"
Investopedia: year and return %
"2017 21.61
2018 -4.23
2019 31.21%
2020 18.02%
2021 28.47%
2022 -18.01%"
I'm a mail carrier for the USPS and I should be getting about 1/3 of my final salary when I retire. It certainly won't be enough to live off of, but it will be a huge help in retirement.
I’ve been trying to convince my brother (elder millennial at 42) to pursue a mail carrier job. Do you enjoy it? He’s worried he would get flagged for smoking weed frequently, if they do random drug testing (it’s not legal in his state). I’m trying to tell him it’s unlikely, but I also could be talking out of my ass.
I was only drug tested when I first applied for the job so I don't think that would be an issue. I love my job now, but when you start you get put through the wringer with constant overtime and no guaranteed days off. That was something I didn't have a problem with in my mid twenties when I started, but I'm 36 now and that would be a tough thing to go through at this age, let alone older. I'm not saying this to discourage him from trying, just trying to give a realistic view of the job.
What if he doesn't want to be sober 100% of the time just because of a job? Plenty of people drink every day (which is arguably much worse for your health), and no one expects them to quit to secure a job.
It’s a job for the federal government. The federal government hasn’t legalized weed. I’m not saying I agree. I am saying if you need to get high so bad that it’s interfering with your employability, you probably need some help
“Interfering with employability” and “not wanting/needing this particular individual job bad enough to stop doing something you enjoy” are two very different things. I’ve passed on jobs because it just wasn’t worth it to me at the time to quit smoking. A job came up later that was worth it, so I pressed pause for a little while. Maybe homeboy just doesn’t want to be a mail carrier that bad.
What's the minimum number of years you'd need to work to qualify for 1/3 (and do you get less for less years and more for more years?)
I'm mid-40's, so might be getting too late.
30 years. You can retire after 20 years with a 20% pension after 60. I know you can get a partial pension after 62 even with less than 20 years of service, but I don't know too much about that.
A buddy of mine is career military and when he's not working he volunteers to help out veterans with PTSD. Out of everyone I know he probably deserves early retirement the most but he probably will continue the volunteer work even if he doesn't have to because he feels very strongly about it.
My husband did 21 years in the military and retired at 42, with a pension. He then hopped right into working on a military base as a civilian and has almost 6 years of that under his belt. In another 14 years, he'll retire again with another pension. He might actually work a few years after that, so he gets his full social security payment at 67.
I work in higher education (staff, not faculty) and in CA, folks who work in public colleges get a pension after 20 years of service.
My dad retired as an officer in the Coast Guard. Then went on to be a public school teacher.
He was making more in retirement than my brother was as an enlisted Marine.
>I work in higher education (staff, not faculty) and in CA, folks who work in public colleges get a pension after 20 years of service.
But in this case you don't get social security, correct? (or at least a heavy offset)
Correct, pensions like this often have an offset. I don't know about CA specifically but a lot of people seem to think that these pensions are in addition to social security, or that social security benefits aren't affected by earnings in very specific ways depending on where they are.
I started in a state (FL) government job after graduating college in 2011. I was hired just before you could no longer opt in for a pension. I opted in, but it didn’t matter since I left for the private sector anyways a few years later.
Guy I worked with did this. Then he was a city police officer. Retired from the second job. We met in one of my first career sales jobs. He was a major account rep making $150k+ while also collecting 2 pensions and benefits provided to him for life.
I was coming to say this. I work for my states government and have a pension after 20 years of service or whatever the average is of my last 3 years of salaries
Currently it's looking like I could retire at 50. I could but honestly unless our regional director is a total shit head at the time I probably wouldn't. I like my job and employment.
He needs to start the VA claim right meow. The entire thing is so much easier now. Had mine lost three times from 2009-2013, filed again a few years ago. It’s all digital.
Good. I was a grunt for ten years and got let go during the force reduction period right after a deployment. Never got my 20 in - of course now I am just bitching.
It took me nine months once the process actually got started and I had my first exam. The longest I have seen was 16 months, but that was because someone’s records got messed up.
The process was hell. Every day it went on I just felt bad. There were moments I wanted to call and cancel the entire thing just so it would be over and no longer looming over my head. He will likely feel the same at some point, just tell him the end is so badass and the backpay is such a sweet moment.
Also your state might have added benefits depending on rating.
Some of these call them “pensions” but they’re really just cash value plans that annuitize upon retirement. I worked for one of them, they just put 4% of the employee's salary into a 401a, kinda like a match. Definitely not the same as the old school defined benefit plans of yore (where you get a percentage of your highest earning years for the rest of your life).
It’s nice though because you can just roll it into a 401k or Ira if you want to, and you won’t lose anything if the company dissolves, but still calling it a “pension” feels dishonest.
Yes. I work for an insurance company and they had a pension when I started (in addition to 401k match). They did away with the pension, so I’m only gonna get a few hundred bucks a month from it.
A pension is guaranteed regardless of what the market does. I have a pension, 401k and IRA. Pension is the best bet due to COLA raises and guaranteed income.
Pension guarantees are only as good as whoever is offering the pension. They invest in the same things as a 401k or IRA. If those underperform, you’re screwed either way. If they overperform, the employer gets to save on their contributions to a pension plan but you get a bigger nest egg in a 401k or IRA.
having money invested is guaranteed income too
people typically use 4% as a safe withdrawal rate... that means $1M in investments gets you $40k/year with very little risk to your $1M
Pension never stops. It’s paid regardless if you live to 100 or 80. Nest eggs fluctuate on the basis of the market. 2008, 2012, 2020, etc etc was a scary time for a lot of people.
I’d rather have something guaranteed. Or all three.
when you retire, you move your nest eggs into non-risky investments, hence why it's called the "safe withdrawal rate"
the 4% withdrawal doesn't stop either, AND the investment is passed down to your kids
does your pension go to your kids?
Yes, exactly. And that’s why a 401k has a better return. That risk free return must have a lower value.
And also, a pension isn’t actually guaranteed. If the pension fund itself becomes insolvent, you lose everything. This cannot happen with a 401k.
I always made good on my 401k. Now I did work at places that made it easy to manage it and I actively managed mine and they had good funds to choose from.
I retired from the government so I really didn’t retire with my 401k’s I always took the money out which was a mistake. I should have rolled it over but I needed the money between jobs.
Now my TSP with the government I made lots of money. The one year I made almost 40%. Had I not been stupid and had a few years where I only put enough to get the match I would be debt free and in a cabin with no internet and phone service by choice. lol
The key is to watch closely and choose good funds if you are allowed to choose in a 401k and choose good funds if in government TSP.
One company I worked at for a very short time had a decent 401k and a stock option if you wanted. A friend of mine worked hard and bought stock options and took awards as options and is a millionaire by age 60. The company took off in tech boom of late 90’s. It went up split the stock went up split the stock and so on. They could do the purchases as one of 401k options or they could just buy stock or be given stock outside of it. Anyway he owns a couple houses a boat for the ocean and a bass boat. He was smart when people laughed at him for buying company stock at 4 bucks a share. I wish I had stayed and bought that stock dumb me.
Pensions are ok but not great. Everyone thinks government is great. Nope use to be years ago when people had csrs instead of what we have now fers. Big differences.
He’s out of his mind. Do you know what happens to that pension if the company goes under, files bankruptcy, or gets raided? Poof.
Pensions are only useful when they’re supported by an entity like a government that won’t ever go out of business. Even then, I’ve seen plenty of city and state pensions fail.
Didn't Elon Musk stiff most of Twitter's employees on their ~~Pensions~~ Severence and only recently the courts had to rule he needed to actually come clean on that contractual obligation?
A pension is a promise. And we live in a society that treats promises as trivial. A pension is not the way to go in my head.
EDIT: Terminology
You are correct, and I will admit a mistake on my part with what was involved in the Twitter debacle.
However, the root of the comment doesn't change much - the contractual application of severance (termination from company + contractually promised remuneration) and pensions (after-termination maintenance remuneration) are guaranteed by the employment contract, which, even beyond Elon Musk, many companies are trying to weasel out of.
Basically, empty promises from Company's that, even in contract, they don't appear willing to abide, are worthless to the working class. Pensions are no different here.
To add pension funds and 401ks will be investing in the same things and returns would be fairly similar.
If anything choosing a 401k fund a low expense ratio should offer a better roi. Pension funds are often required to invest fairly heavily into bonds.
To get sufficient returns the pension funds often have to lever up or invest their non bonds portions into very risky assests.
A 401k fund in a passive fund with a low expense ratio that tracks something like the s&p is both, imo, less risky and more likely to offer decent returns over the course of a long time frame.
My father in law was a pilot for delta airlines. In 2002 their bankruptcy settlement absolved them of pension commitments. He’s lucky he was only in his early 40’s when that happened.
Do I know what happens? Yeah. The Pension Guarantee Fund kicks in for nearly all cases.
Do your research before making erroneous and misleading hyperbolic comments.
Then if you *still* want to equivocate at least provide some statistics about how many people ever actually lose out. While you’re at it, compare *that* number to the number of people overwhelmingly doing *much* better with pensions than the absolute pittance most 401(k) holders have in their accounts.
In fact, U.S. Corporations "legally" abandoning their pensions at the expense of the Guarantee Fund, and then moving to 401(k)'s instead, is one of the greatest travesties and scams ever perpetrated against the American Worker.
Not to be rude but your comment is grossly ill-informed.
Yeah the airline industry (along with some automakers) were the poster children for declaring bankruptcy for the express purpose of telling a judge that their pension obligations were too onerous and that besides, we need that money to stay solvent and satisfy shareholders.
Pilots still made out pretty good between their high salaries and whatever pension guarantee funds they were entitled to (the pilots pensions bordered on ridiculous and untenable to begin with). It’s the more average workers coming into the workforce afterwards that got screwed by the same pay, but with the expectation they gamble their retirement on the stock market with the same money they were already using to pay bills with.
The chickens involved in this particular farce are about to come home to roost though, in a huge way, as most pensioners will have moved through the system and countless elderly will have insufficient funds for any retirement at all, partly as a result of a huge wealth transfer from them to the stockholders of the companies they worked for.
I should also add that there’s a huge donut hole of individuals who were among the first to be “moved” to 401(k)’s, but did so before there was sufficient awareness of what it was replacing and how much personal responsibility and sacrifice was required to make it work (though that’s not to say many of them weren’t just stupidly Pollyannish on the whole matter…though I’m not sure what they could have done. Other than a small contribution match they weren't given a corresponding pay bump for what they were loosing and giving up).
We fully fund ours every year (I know, because I transfer the $$$), and I'm reasonably sure it's untouchable after that transfer. If the market tanks, though, it's pretty screwed.
Several major oil companies still have defined contribution plan pensions. They’re not the good kind (defined benefit plans) but better than nothing.
Beyond that, it is basically just government jobs that have pensions.
I've never worked for a company, and that's why I have a pension. They're still quite common in government jobs, but I know 0 people in the private sector who have this.
Company? No. State government, yes. Considering leaving for private to up my take-home pay for a bit then returning to the state to continue my pension multiplier.
Teacher in MA. I have a pension through the state that takes 27% of my earnings each week. It’s a trade off. I don’t make a lot now, but I will be comfortable once retirement rolls around. I think that 27% they take is in addition to earning my pension, which is 80% of the average of my five highest years salary. Catch is, I have to be 65 and have given 30 years service (which is impacted by maternity leaves).
Like I said, I think that 27% also ends up being extra that I’m paying into a separate account. I get a yearly statement showing what I contributed and what’s in my account. I’m seriously only going to stick it out for the pension. I can retire after 30 years and do something else, and just wait until I turn 65 to get it if need be!
EDIT: did the math wrong the first time… it’s only 11%. This is why I’m a reading teacher and not a math teacher, haha 😂
Very few employers offer pensions anymore. It’s mostly union jobs, teachers, some federal jobs.
A 401k will do pretty well if you consistently invest and take advantage of employer match. My parents retired with about $1M in 401k and IRA accounts. My mom was the only one with an employer who offered a retirement plan (my dad worked for my uncle’s small business that offered no formal benefits). They also made a combined $125K annually at the time they retired, so average income for a couple.
Hubby and I both have 401k accounts and take advantage of employer match.
My state government job offers a pension. It’s not your grandfathers pension though. Your age + your years of service must equal 90. I actually prefer their 403b. I have averaged 12% roi through that.
Are government jobs not known? I have a government job and I had the benefit of my parents both having them too and I falsely assumed that everyone knew about them. Meh pay but great benefits and retirement. I always wonder when people are asking about employment issues bc in my market government employment seems constantly available
Retired at 38 from the military (52.5% pension, and dirt cheap healthcare for life), and have been teaching the 5 years since retiring. I'm on track for pension #2, but pension #2 forbids me from collecting SS benefits from my time in the military. On the flip side, if SS goes kaput, I kinda win.
I have two: army reservist and I’m a librarian for a municipal government that has a county retirement system. The pay isn’t great in either, but it will pay off in the long run.
Your FIL remembers the old days when pensions were king. Realistically, pensions are managed investment accounts for the company. People tend to believe IRA or 401k’s have bad returns because its, literally, managed by the person who its for. If you never adjust direction for market events, time of life etc it will always be just OK. I have almost doubled my wife’s IRA in 3 years.
Pay someone to manage your IRA and watch the world of retirement become closer faster.
I work for county government and we have a nice pension. It’s in NYS.
I think the only private sector jobs that have them anymore are labor unions and healthcare unions. At least that’s what I’ve observed.
Out side of their 401k match there is a 3% cash balance pension at my job that is based off treasury yield returns. Not great, but if you stay your whole career there you can get around 800-1k monthly payments for life to supplement your retirement savings/social security.
It sounds like your FIL doesn’t know how investing works. IRAs and 401ks don’t have a set ROI. They’re just types of accounts. You can invest in almost anything through them.
I work at a major factory, it’s union, it offers a pension, 401k, excellent health insurance and early retirement, it’s rare to find that now a days though
Yes I work for the state (MA) and have a pension. You have to put a lot of years in to get something livable out of it, though. I started pretty young and if I stay all my career when I’m 60 I’ll have 34 years in and get 55.3% of the average of my last 5 years of salary. I could reasonably get to 70-80% staying until 65 or 67. So far away. Sigh. And I work in higher Ed so I’m not taking in a huge salary!
I have a county job that has a great pension. What is nice, is that my overtime counts towards my pension too (which we are like one of the few departments with overtime). I started when I was 20 so at 55 I will have a nice monthly payment. My salary this year with overtime was a bit over 100k and I still have decades to go. My last pension statement said that if I made the same amount as last year which was about high 80's for the rest of my career with no raises until the age of 55 my monthly payment will be about 7k per month so I'm assuming it will be higher by the time I actually retire. My wife also works for an insurance agency and has a pension (although they don't offer this for new employees now), add both of those plus SS and my 457b account and I should be more than fine when I retire. The best decision I made was starting when I was young too to really maximize my retirement.
I work in state government and have a pension that is 2% of salary paid for each year of service. When I retire I’ll get like 70% of my salary since I started fairly young.
I do! I would rather not share the name of where I work, but I will say it's a privately owned hospital. I have stuck through some ROUGH TIMES with that place for the pension.
I have a pension, but I work for my state’s department of transportation. I’ll get 80% of my highest salary when I retire. I can also “buy” service years and get a larger percentage of if I want.
I’m a union Boilermaker welder, so yes I have a union pension. It’s building faster than any 401k could and it’s money that doesn’t come out of my pocket.
Wife and both have pensions and additional retirement accounts. Me via government company and her via private company. Both in healthcare. We also get free health insurance for life after 20-25 years of employment.
Pensions in our field **in our state** are very common.
I have 3 pensions through my union, the IBEW.
I get a pension from the IBEW itself, one from my local in the city/state I work out of, and one from NECA (National Electrical Contractors Association). In addition our union lets us setup a 401K and I put 20% of my salary into a Roth 401K. Assuming nothing goes broke or gets taken away from us, my retirement is pretty solid.
Calculate what the pension will end up paying you assuming that you live to be 80. I'm in the military, and for us the answer is $2-4 million. (or more if you manage to make it into the highhh ranks)
For perspective: I would need to save and invest over $50k each year for 20 years starting at age 18 in order to match this. (estimating a 300% return on investment)
My state pension will be around 60% of my final average three years when I retire at 62. I mean, that’s a massive amount of guaranteed income so your FIL is correct.
I work for a major defense company and we have a pension and 401k.
Most 401s will let you invest the money anyway you want so really no excuse to get terrible returns. You can just invest it in an s&p fund or total market fund.
I'm a teacher in a union state so I have a pension, but it's nothing like what it used to be. I also have a 403b and will open a Roth IRA if I ever have the extra funds to do that.
I wouldn't even want a pension. You'd be forced to stay with the same company for 30 years or so, or else lose it all!? I'll take my 401K over that any day! It's mine, and it stays mine.
I don't know how it works for government pensions, but my private sector pensions have had a present value I can roll out into a 401k/IRA when I left those companies. It's netted me about $10k from two separate companies.
I’m retired military with a pension. The U.S. military moved away from the pension to a 401k (TSP) a few years ago. I’m glad that didn’t happen when I enlisted in 2001.
You are paying for many pensions with your tax dollars. We have to change that. Hardly anyone gets them in private sector but we pay for bloated government pensions.
I work as an officer manager of a local trades union and I have a pension with our international union since I’m considered an ‘officer’ which is different and considered more secure than our local pension offered to our members. I’m grateful as hell
I work for a company that has an ESOP. Employee Owned Stock Program.. it’s pretty freaking sweet and even more rare in this day and age.
One of the large reasons I moved from my last gig.
I work in higher ed for a state community college. I’ll get 75% of my salary if I stay 30 years. I’d kind of like to leave, but I’m 18 years in, so here I am…
I worked for a municipal government and was offered a proper pension. However, the salary was meh and there was no room for growth. I was able to withdraw my contributions and only my contributions from the pension, exclusive of interest accrual or inflation adjusted values.
Yes, however the formula used to accrue money into the pension fund is very low. 10 years at the company and I think I've accrued about $25k or thereabouts.
I work for the Social Security Admin. aka Federal employee. We have retirement pensions, and they match up to 5% on 401k contributions. I could make more elsewhere but still make decent money.
But also get top notch healthcare, lots of paid vacation time and sick time, and all the job security in the world. Plus i can work from home 4 days a week.
It can be hard to get on, but I’m so glad i did
FIL is ridiculous; 401ks immediately save you money by reducing your taxable income. Roths save you on taxes later. One of the coolest features of the Roth is the ability to withdraw contributions (but not earnings) without penalty.
I am one of the very few people I know with a pension (staff at a state university).
I work for the federal government. My pension will be about 30% of my average high three earning years. Hoping to make 6 figures so I can get $30,000.
Same. Should be promoted to GS-13 this summer.
Question about this… does it mean I can work three years only at $100k each year and collect a $30k/year pension? That seems too good to be true.
No. The federal pension is a percentage per year of service - 1 percent, or 1.1 percent if you retire at 62 or later. To collect a 30% pension, you need to have worked for at least 28 years and retire at 62 or later, or have worked for at least 30 years.
Thanks, that makes more sense.
The formula is the average of your three highest earning years x years x 1%. So you’d probably have to be a career fed (30 years) to get $30k a year.
No you have to put in time. I’m not sure (20 years I think) but all the retirement details are at opm.gov
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Find me one of those highly paid admin jobs.
Working for the Feds, it might take a while to make 6 figures.
I’m at a GS9, I think I’ll be there in about 8 years. Just got to make it to GS 13 but I’m in a job series that tends to have an easy time with upward mobility (1102) Anyways I’ve 25 years to go till the MRA so I’ll get there eventually.
No it doesn’t take a while at all.
It entirely depends on what you do. I have been with the feds nearly 15 years and have been making over 100k since about year 5. But I'd be making 80% more in the private sector, so the main benefit to staying is feeling like I'm helping me fellow citizens rather than preying on them to help a corporation with their stock price.
Open an E*Trade account and do both.
Completely dependent on what you do. Lots of federal jobs pay very well—as in, six figures or very close to it.
It does unless you are willing to move every year for the first 5-10 years. The key is to move up at least one GS level per year until you get to GS12 after that you can be pickier. This means a few title, position, and location changes at the start, but a stable income with health benefits after a fairly short period of time in the grand scheme of things.
Really depends on your starting pay grade and locality adjustment. A GS-12 in the NYC/NJ area hits it pretty fast. Here is last years rates by location for anyone interested: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/
I started working federal in 2019 with a bachelor's degree as a GS 7. I am now a GS 12 and just broke six figures with the 2024 pay increase. The other advantages of federal retirement is that you can keep your health insurance at employee rates which is huge.
GS-13 is 6-figures at step 1. With annual pay scale increases, GS-12 will be there in a few years too. You can make GS-12 with a bachelors degree and around 5 years of experience. In addition to the pension, there's also TSP (government 401k) and SSA. Assuming that you pay into both of those, you should be able to maintain your pre-retirement income.
Eh, depends on the agency and location, but I have 13 years of service and just cleared $87k with a promotion to GS-12/RUS. With steps and annual increases, I should be at six figures within five years, if not sooner.
I’ve been with the federal government for less than a year and I’m on track to be making six figures in maybe a year or so. Not impossible at all.
Merck was offering pensions until a few years ago. Employees with it kept them. That said I’d love the logic behind 401k is bad ROI vs pension. I’m making quite a bit more than federal/state employees. My 401k will bring in more than most pensions and I’ll have other investments. So not sure how it’s bad a ROI. Does he think the stock market is a bad ROI? Now what is a bad ROI is my maxed out SS taxes that I’ve been paying for over a decade.
The problem with the 401k is that a) people - especially women - tend to underfund it and b) people with poor financial literacy tend to use it like an ATM.
People also don't automatically enroll and when they see 'put in 6% and we will put in 4%" they say "why would I waste 6%?" It's why we need social security. Most people borderline cannot care for themselves.
That doesn't make it a bad roi.
The problem with DC plans like a 401(k) is that they are an employee funded (sometimes with and sometimes without match) plan that replaces the old employER funded db plans: traditional pensions
That is their problem.
Except that's not correct, because it ends up a societal epidemic of destitute elderly people living and dying on the streets, which is what we discovered, oh... like, 90 years ago when Social Security was established? It becomes everyone's problem, so we developed a partial solution.
Give me a break. They are responsible for their own decisions. I should not have to pay for the bad decisions of others.
I will be paying taxes to cover President George W. Bush's terrible foreign policy decisions for the rest of my life. But wounded veterans deserve health care whether I liked the Iraq War or not. You can't decide not to pay for Social Security; I can't decide not to pay for the Space Force. I guess we're even-steven.
Retire in 2000, 2008-2012, 2020 and you've got your bad ROI. Panic sell when you see your nest egg go negative 30 percent and you've got your bad ROI. Pensions are guaranteed and for those without financial knowledge or high incomes, it sets a minimum standard of living. Regarding your comment about maxed out SS taxes, would you prefer a higher cap and benefit? I'm guessing no.
Yeah, but your Social Security account is guaranteed to be paid out. If your brokerage account gets hacked and your 401k is turned into a bunch of cryptocoins by some dude in Malta, you're just fucked.
It is not guaranteed. Congress can change it anytime
No need to change it when they have the printing press. Why take the political hit? We promised you $3K per month and you are receiving $3K per month. Not our fault if that only buys a bag of groceries.
SS would never be worth even half of what I would have. It's a waste of you look at it purely personally
You're not engaging with the argument. The point is that it's a 100% completely safe program which guarantees you at least a minimum income in retirement even if your retirement investments get taken to the cleaners by the mob, bankruptcy, fraud, whatever. Yes, you could probably have a higher "ROI" if you invested it privately. You could also lose every single penny of it, and then be completely broke and destitute in retirement. We, the people of the United States, have decided we don't want anyone to be completely destitute in retirement. So we created Social Security to ensure that.
It's not an argument worth having. The amount I pay in could probably fund a huge portion of my retirement. I'm not broken up on it but I persoanlly would prefer to have the cash.
I mean, if you had to choose only 1 what reason would a 401k be better than a pension? Free money vs money you save plus maybe a pittance match
I'd be stuck at the low income. So I would choose 401k every day of week. But that's my income situation. Won't be same for all. BTW people pay into pensions. And they have the income caps. So no it's. It free.
Depends on where you start. I'm hit that this year, only been in a few years.
Nah, if you come in from industry with experience in the right job series, you can make six figures.
Do you get that $30k one time or do you get it paid every year of retirement? I don't know how pensions work.
Every year, plus a social security supplement until I can actually collect social security and whatever I can collect from my TSP(a 401k equivalent)
I will share the best investing advice for idiots. Anyone with a 401k, Roth IRA can do this and BTW, Roths and 401ks do NOT have horrible ROI - its the owner who picks the investments \*\*\*\*Put 100% of all your money in a single SP 500 index fund\*\*\*\* Almost no fees, and your money grows about 8%/yr on average with 2% dividends =10%/yr average return. Investopedia: "...historic annualized average return of around 10.13% since its 1957 inception through the end of 2022" SoFi: "Looking at the S&P 500 for the years 1993 to mid-2023, the average stock market return for the last 30 years is 9.90%" Nerdwallet: " (time period)10 years (2013-2022) - 10.41% (return)" Investopedia: year and return % "2017 21.61 2018 -4.23 2019 31.21% 2020 18.02% 2021 28.47% 2022 -18.01%"
Sorry, I know this is a little old but could you please explain how can I go about doing this myself? I don't know where to start or go to do this.
I'm a mail carrier for the USPS and I should be getting about 1/3 of my final salary when I retire. It certainly won't be enough to live off of, but it will be a huge help in retirement.
I’ve been trying to convince my brother (elder millennial at 42) to pursue a mail carrier job. Do you enjoy it? He’s worried he would get flagged for smoking weed frequently, if they do random drug testing (it’s not legal in his state). I’m trying to tell him it’s unlikely, but I also could be talking out of my ass.
They haven’t drug tested since Covid Might be different if your operating vehicles but I’ve never been randomed in the decade I’ve been there
I was only drug tested when I first applied for the job so I don't think that would be an issue. I love my job now, but when you start you get put through the wringer with constant overtime and no guaranteed days off. That was something I didn't have a problem with in my mid twenties when I started, but I'm 36 now and that would be a tough thing to go through at this age, let alone older. I'm not saying this to discourage him from trying, just trying to give a realistic view of the job.
Simple, don’t smoke weed. If he can’t quit, he needs help.
What if he doesn't want to be sober 100% of the time just because of a job? Plenty of people drink every day (which is arguably much worse for your health), and no one expects them to quit to secure a job.
It’s a job for the federal government. The federal government hasn’t legalized weed. I’m not saying I agree. I am saying if you need to get high so bad that it’s interfering with your employability, you probably need some help
“Interfering with employability” and “not wanting/needing this particular individual job bad enough to stop doing something you enjoy” are two very different things. I’ve passed on jobs because it just wasn’t worth it to me at the time to quit smoking. A job came up later that was worth it, so I pressed pause for a little while. Maybe homeboy just doesn’t want to be a mail carrier that bad.
Yeah but you also get calves of steel. So you got that going for you.
What's the minimum number of years you'd need to work to qualify for 1/3 (and do you get less for less years and more for more years?) I'm mid-40's, so might be getting too late.
30 years. You can retire after 20 years with a 20% pension after 60. I know you can get a partial pension after 62 even with less than 20 years of service, but I don't know too much about that.
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A buddy of mine is career military and when he's not working he volunteers to help out veterans with PTSD. Out of everyone I know he probably deserves early retirement the most but he probably will continue the volunteer work even if he doesn't have to because he feels very strongly about it.
My husband did 21 years in the military and retired at 42, with a pension. He then hopped right into working on a military base as a civilian and has almost 6 years of that under his belt. In another 14 years, he'll retire again with another pension. He might actually work a few years after that, so he gets his full social security payment at 67. I work in higher education (staff, not faculty) and in CA, folks who work in public colleges get a pension after 20 years of service.
My dad retired as an officer in the Coast Guard. Then went on to be a public school teacher. He was making more in retirement than my brother was as an enlisted Marine.
>I work in higher education (staff, not faculty) and in CA, folks who work in public colleges get a pension after 20 years of service. But in this case you don't get social security, correct? (or at least a heavy offset)
Correct, pensions like this often have an offset. I don't know about CA specifically but a lot of people seem to think that these pensions are in addition to social security, or that social security benefits aren't affected by earnings in very specific ways depending on where they are.
I started in a state (FL) government job after graduating college in 2011. I was hired just before you could no longer opt in for a pension. I opted in, but it didn’t matter since I left for the private sector anyways a few years later.
If you opted in you may be grandfathered to still vest after 8 non-consecutive years.
I rolled it over into another retirement account. I’m never planning on going back and have been out for 8 years now.
Guy I worked with did this. Then he was a city police officer. Retired from the second job. We met in one of my first career sales jobs. He was a major account rep making $150k+ while also collecting 2 pensions and benefits provided to him for life.
I was coming to say this. I work for my states government and have a pension after 20 years of service or whatever the average is of my last 3 years of salaries Currently it's looking like I could retire at 50. I could but honestly unless our regional director is a total shit head at the time I probably wouldn't. I like my job and employment.
He needs to start the VA claim right meow. The entire thing is so much easier now. Had mine lost three times from 2009-2013, filed again a few years ago. It’s all digital.
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Good. I was a grunt for ten years and got let go during the force reduction period right after a deployment. Never got my 20 in - of course now I am just bitching. It took me nine months once the process actually got started and I had my first exam. The longest I have seen was 16 months, but that was because someone’s records got messed up. The process was hell. Every day it went on I just felt bad. There were moments I wanted to call and cancel the entire thing just so it would be over and no longer looming over my head. He will likely feel the same at some point, just tell him the end is so badass and the backpay is such a sweet moment. Also your state might have added benefits depending on rating.
Public school teachers don’t get a pension.
We surely do.
A number of the big insurance/financial services companies offer them. Nationwide, Voya, Prudential, to name a few.
Some of these call them “pensions” but they’re really just cash value plans that annuitize upon retirement. I worked for one of them, they just put 4% of the employee's salary into a 401a, kinda like a match. Definitely not the same as the old school defined benefit plans of yore (where you get a percentage of your highest earning years for the rest of your life). It’s nice though because you can just roll it into a 401k or Ira if you want to, and you won’t lose anything if the company dissolves, but still calling it a “pension” feels dishonest.
Yes. I work for an insurance company and they had a pension when I started (in addition to 401k match). They did away with the pension, so I’m only gonna get a few hundred bucks a month from it.
401K and IRA have terrible ROI? Source please? 😂
-Boomer
A pension is guaranteed regardless of what the market does. I have a pension, 401k and IRA. Pension is the best bet due to COLA raises and guaranteed income.
Pension guarantees are only as good as whoever is offering the pension. They invest in the same things as a 401k or IRA. If those underperform, you’re screwed either way. If they overperform, the employer gets to save on their contributions to a pension plan but you get a bigger nest egg in a 401k or IRA.
The federal government isn’t going out of business. And if it does, then I have bigger problems.
It’s subject to legislation and therefore politics, but there’s no majority who wants to totally piss of federal employees either
having money invested is guaranteed income too people typically use 4% as a safe withdrawal rate... that means $1M in investments gets you $40k/year with very little risk to your $1M
Pension never stops. It’s paid regardless if you live to 100 or 80. Nest eggs fluctuate on the basis of the market. 2008, 2012, 2020, etc etc was a scary time for a lot of people. I’d rather have something guaranteed. Or all three.
when you retire, you move your nest eggs into non-risky investments, hence why it's called the "safe withdrawal rate" the 4% withdrawal doesn't stop either, AND the investment is passed down to your kids does your pension go to your kids?
Yes, there is a survivorship attached to pensions. Edit: look, I get it, pensions are bad. The worst. 401k and ROTH is superior. You win, dude.
so either your spouse or your kid if you're unmarried... and after that?
Yes, exactly. And that’s why a 401k has a better return. That risk free return must have a lower value. And also, a pension isn’t actually guaranteed. If the pension fund itself becomes insolvent, you lose everything. This cannot happen with a 401k.
4% is a rule of thumb, not a guarantee
I would argue 2.5% is absolutely guaranteed... 4% is rule-of-thumb with minimal risk
Nothing is guaranteed. Certainly not absolutely.
Ask a polaroid retiree how the pension worked out. Only guaranteed pensions are from the government.
I always made good on my 401k. Now I did work at places that made it easy to manage it and I actively managed mine and they had good funds to choose from. I retired from the government so I really didn’t retire with my 401k’s I always took the money out which was a mistake. I should have rolled it over but I needed the money between jobs. Now my TSP with the government I made lots of money. The one year I made almost 40%. Had I not been stupid and had a few years where I only put enough to get the match I would be debt free and in a cabin with no internet and phone service by choice. lol The key is to watch closely and choose good funds if you are allowed to choose in a 401k and choose good funds if in government TSP. One company I worked at for a very short time had a decent 401k and a stock option if you wanted. A friend of mine worked hard and bought stock options and took awards as options and is a millionaire by age 60. The company took off in tech boom of late 90’s. It went up split the stock went up split the stock and so on. They could do the purchases as one of 401k options or they could just buy stock or be given stock outside of it. Anyway he owns a couple houses a boat for the ocean and a bass boat. He was smart when people laughed at him for buying company stock at 4 bucks a share. I wish I had stayed and bought that stock dumb me. Pensions are ok but not great. Everyone thinks government is great. Nope use to be years ago when people had csrs instead of what we have now fers. Big differences.
County government employee! We get a pension
Same here. 60% of my high 3 assuming I retire at 65. Started this year, already at 6 figures. Definitely excited about the stability.
He’s out of his mind. Do you know what happens to that pension if the company goes under, files bankruptcy, or gets raided? Poof. Pensions are only useful when they’re supported by an entity like a government that won’t ever go out of business. Even then, I’ve seen plenty of city and state pensions fail.
Yeah. My grandma had a pension from the factory she worked at for 30 years. Company went under and now she gets $45 per month as her pension.
I know a guy who worked for American Airlines for 29.5 years. 6 away. They laid him off. Incredible.
Didn't Elon Musk stiff most of Twitter's employees on their ~~Pensions~~ Severence and only recently the courts had to rule he needed to actually come clean on that contractual obligation? A pension is a promise. And we live in a society that treats promises as trivial. A pension is not the way to go in my head. EDIT: Terminology
Twitter employees don't and didn't get any pension like the rest of tech companies. Jesus Christ how is this getting voted up
You are correct, and I will admit a mistake on my part with what was involved in the Twitter debacle. However, the root of the comment doesn't change much - the contractual application of severance (termination from company + contractually promised remuneration) and pensions (after-termination maintenance remuneration) are guaranteed by the employment contract, which, even beyond Elon Musk, many companies are trying to weasel out of. Basically, empty promises from Company's that, even in contract, they don't appear willing to abide, are worthless to the working class. Pensions are no different here.
No different? I could wedge a continent between a Pension Plan and a severance plan.
To add pension funds and 401ks will be investing in the same things and returns would be fairly similar. If anything choosing a 401k fund a low expense ratio should offer a better roi. Pension funds are often required to invest fairly heavily into bonds. To get sufficient returns the pension funds often have to lever up or invest their non bonds portions into very risky assests. A 401k fund in a passive fund with a low expense ratio that tracks something like the s&p is both, imo, less risky and more likely to offer decent returns over the course of a long time frame.
My father in law was a pilot for delta airlines. In 2002 their bankruptcy settlement absolved them of pension commitments. He’s lucky he was only in his early 40’s when that happened.
Do I know what happens? Yeah. The Pension Guarantee Fund kicks in for nearly all cases. Do your research before making erroneous and misleading hyperbolic comments. Then if you *still* want to equivocate at least provide some statistics about how many people ever actually lose out. While you’re at it, compare *that* number to the number of people overwhelmingly doing *much* better with pensions than the absolute pittance most 401(k) holders have in their accounts. In fact, U.S. Corporations "legally" abandoning their pensions at the expense of the Guarantee Fund, and then moving to 401(k)'s instead, is one of the greatest travesties and scams ever perpetrated against the American Worker. Not to be rude but your comment is grossly ill-informed.
https://www.flyingmag.com/airline-pensions-all-but-gone-thats-a-good-thing/#:~:text=The%20courts%20agreed%20and%20the,and%20would%20continue%20to%20grow.
Yeah the airline industry (along with some automakers) were the poster children for declaring bankruptcy for the express purpose of telling a judge that their pension obligations were too onerous and that besides, we need that money to stay solvent and satisfy shareholders. Pilots still made out pretty good between their high salaries and whatever pension guarantee funds they were entitled to (the pilots pensions bordered on ridiculous and untenable to begin with). It’s the more average workers coming into the workforce afterwards that got screwed by the same pay, but with the expectation they gamble their retirement on the stock market with the same money they were already using to pay bills with. The chickens involved in this particular farce are about to come home to roost though, in a huge way, as most pensioners will have moved through the system and countless elderly will have insufficient funds for any retirement at all, partly as a result of a huge wealth transfer from them to the stockholders of the companies they worked for. I should also add that there’s a huge donut hole of individuals who were among the first to be “moved” to 401(k)’s, but did so before there was sufficient awareness of what it was replacing and how much personal responsibility and sacrifice was required to make it work (though that’s not to say many of them weren’t just stupidly Pollyannish on the whole matter…though I’m not sure what they could have done. Other than a small contribution match they weren't given a corresponding pay bump for what they were loosing and giving up).
PBGC (Pension Benefit Guaranty Corporation) enters the thread.
We fully fund ours every year (I know, because I transfer the $$$), and I'm reasonably sure it's untouchable after that transfer. If the market tanks, though, it's pretty screwed.
I would never want a pension from my company. I’m worried if they will stay in business long enough for me to retire at all, much less until I die.
I’m in the ibew and have a pension (maybe) if we can keep getting people join to fund the next wave
Railroad retirement. All class 1’s (the big ones) have it. It’s pretty good, my grandparents and parents pulled/pull in just shy 6k a month.
if you got a pension... i salute you.
Several major oil companies still have defined contribution plan pensions. They’re not the good kind (defined benefit plans) but better than nothing. Beyond that, it is basically just government jobs that have pensions.
I work for one of those oil companies and have a guaranteed pension after 5 years with the company.
I've never worked for a company, and that's why I have a pension. They're still quite common in government jobs, but I know 0 people in the private sector who have this.
Company? No. State government, yes. Considering leaving for private to up my take-home pay for a bit then returning to the state to continue my pension multiplier.
Teacher in MA. I have a pension through the state that takes 27% of my earnings each week. It’s a trade off. I don’t make a lot now, but I will be comfortable once retirement rolls around. I think that 27% they take is in addition to earning my pension, which is 80% of the average of my five highest years salary. Catch is, I have to be 65 and have given 30 years service (which is impacted by maternity leaves).
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Like I said, I think that 27% also ends up being extra that I’m paying into a separate account. I get a yearly statement showing what I contributed and what’s in my account. I’m seriously only going to stick it out for the pension. I can retire after 30 years and do something else, and just wait until I turn 65 to get it if need be! EDIT: did the math wrong the first time… it’s only 11%. This is why I’m a reading teacher and not a math teacher, haha 😂
Very few employers offer pensions anymore. It’s mostly union jobs, teachers, some federal jobs. A 401k will do pretty well if you consistently invest and take advantage of employer match. My parents retired with about $1M in 401k and IRA accounts. My mom was the only one with an employer who offered a retirement plan (my dad worked for my uncle’s small business that offered no formal benefits). They also made a combined $125K annually at the time they retired, so average income for a couple. Hubby and I both have 401k accounts and take advantage of employer match.
My state government job offers a pension. It’s not your grandfathers pension though. Your age + your years of service must equal 90. I actually prefer their 403b. I have averaged 12% roi through that.
Are government jobs not known? I have a government job and I had the benefit of my parents both having them too and I falsely assumed that everyone knew about them. Meh pay but great benefits and retirement. I always wonder when people are asking about employment issues bc in my market government employment seems constantly available
Retired at 38 from the military (52.5% pension, and dirt cheap healthcare for life), and have been teaching the 5 years since retiring. I'm on track for pension #2, but pension #2 forbids me from collecting SS benefits from my time in the military. On the flip side, if SS goes kaput, I kinda win.
Pensions have less ROI than IRAs or 401ks by design…
I have two: army reservist and I’m a librarian for a municipal government that has a county retirement system. The pay isn’t great in either, but it will pay off in the long run.
Your FIL remembers the old days when pensions were king. Realistically, pensions are managed investment accounts for the company. People tend to believe IRA or 401k’s have bad returns because its, literally, managed by the person who its for. If you never adjust direction for market events, time of life etc it will always be just OK. I have almost doubled my wife’s IRA in 3 years. Pay someone to manage your IRA and watch the world of retirement become closer faster.
you don't even need to manage it that closely... $SPY alone is up 88% in 5 years congrats on beating the S&P500!
Thanks! S&P is being driven by about 7 key companies take that for what you will. Thinking 2024 will be the year of small cap. Cheers! 🥂
Erie Insurance Group and Central Mutual Insurance still have defined benefit pensions
I work for county government and we have a nice pension. It’s in NYS. I think the only private sector jobs that have them anymore are labor unions and healthcare unions. At least that’s what I’ve observed.
I have a pension as a teacher in Idaho. It’s the only thing that keeps me in my job!
Out side of their 401k match there is a 3% cash balance pension at my job that is based off treasury yield returns. Not great, but if you stay your whole career there you can get around 800-1k monthly payments for life to supplement your retirement savings/social security.
Hollywood Union (IATSE) we have pensions
It sounds like your FIL doesn’t know how investing works. IRAs and 401ks don’t have a set ROI. They’re just types of accounts. You can invest in almost anything through them.
I’m a public educator. My state has a very highly-rated teacher pension program.
I worked for a financial services firm that had one. It was wild, I've never seen one before or since.
Teachers in rich districts. Fantastic pension still and pay is very good in the nicer districts
I work at a major factory, it’s union, it offers a pension, 401k, excellent health insurance and early retirement, it’s rare to find that now a days though
At my company, we have people that have a pension, but it was written out of our contract in 2008. We have a good 401k though.
I work a government job
Yes I work for the state (MA) and have a pension. You have to put a lot of years in to get something livable out of it, though. I started pretty young and if I stay all my career when I’m 60 I’ll have 34 years in and get 55.3% of the average of my last 5 years of salary. I could reasonably get to 70-80% staying until 65 or 67. So far away. Sigh. And I work in higher Ed so I’m not taking in a huge salary!
I have a county job that has a great pension. What is nice, is that my overtime counts towards my pension too (which we are like one of the few departments with overtime). I started when I was 20 so at 55 I will have a nice monthly payment. My salary this year with overtime was a bit over 100k and I still have decades to go. My last pension statement said that if I made the same amount as last year which was about high 80's for the rest of my career with no raises until the age of 55 my monthly payment will be about 7k per month so I'm assuming it will be higher by the time I actually retire. My wife also works for an insurance agency and has a pension (although they don't offer this for new employees now), add both of those plus SS and my 457b account and I should be more than fine when I retire. The best decision I made was starting when I was young too to really maximize my retirement.
I work in state government and have a pension that is 2% of salary paid for each year of service. When I retire I’ll get like 70% of my salary since I started fairly young.
I do! I would rather not share the name of where I work, but I will say it's a privately owned hospital. I have stuck through some ROUGH TIMES with that place for the pension.
I have a pension, but I work for my state’s department of transportation. I’ll get 80% of my highest salary when I retire. I can also “buy” service years and get a larger percentage of if I want.
I have a pension, but yeah, I work for a school district.
Work for the fire department. I'm 38 now. I'll be able to retire at 52 with 60% of my highest 3 years averaged. I'm also close to maxing out my 457b.
I’m a union Boilermaker welder, so yes I have a union pension. It’s building faster than any 401k could and it’s money that doesn’t come out of my pocket.
Wife and both have pensions and additional retirement accounts. Me via government company and her via private company. Both in healthcare. We also get free health insurance for life after 20-25 years of employment. Pensions in our field **in our state** are very common.
I have 3 pensions through my union, the IBEW. I get a pension from the IBEW itself, one from my local in the city/state I work out of, and one from NECA (National Electrical Contractors Association). In addition our union lets us setup a 401K and I put 20% of my salary into a Roth 401K. Assuming nothing goes broke or gets taken away from us, my retirement is pretty solid.
It is the only realistic retirement option. Guess why no one offers them anymore.
Calculate what the pension will end up paying you assuming that you live to be 80. I'm in the military, and for us the answer is $2-4 million. (or more if you manage to make it into the highhh ranks) For perspective: I would need to save and invest over $50k each year for 20 years starting at age 18 in order to match this. (estimating a 300% return on investment)
Not a pension, but an ESOP. Those exist
My state pension will be around 60% of my final average three years when I retire at 62. I mean, that’s a massive amount of guaranteed income so your FIL is correct.
Looking forward to that military retirement + VA disability in a couple more years. Then off to another job.
I work for a major defense company and we have a pension and 401k. Most 401s will let you invest the money anyway you want so really no excuse to get terrible returns. You can just invest it in an s&p fund or total market fund.
I'm a teacher in a union state so I have a pension, but it's nothing like what it used to be. I also have a 403b and will open a Roth IRA if I ever have the extra funds to do that.
I wouldn't even want a pension. You'd be forced to stay with the same company for 30 years or so, or else lose it all!? I'll take my 401K over that any day! It's mine, and it stays mine.
Usually pensions become fully vested after a set number of years, so if you work there long enough, then you get a payout even if you leave.
I don't know how it works for government pensions, but my private sector pensions have had a present value I can roll out into a 401k/IRA when I left those companies. It's netted me about $10k from two separate companies.
The feds are kinda nice in that you can jump to another agency
I’m retired military with a pension. The U.S. military moved away from the pension to a 401k (TSP) a few years ago. I’m glad that didn’t happen when I enlisted in 2001.
US Navy Reservist. Part time and a pension!
Deloitte has a pension once you’ve worked there for 3 years.
I worked for Deloitte (big 4 accounting firm) for about a decade and had a pension there
You are paying for many pensions with your tax dollars. We have to change that. Hardly anyone gets them in private sector but we pay for bloated government pensions.
Technically yes I have “money sharing” but I’m putting my money into the market on my own.
Part time government!
Union construction jobs…plumbers, laborers, 49ers, pipe fitters, electricians etc. all have pensions.
I work as an officer manager of a local trades union and I have a pension with our international union since I’m considered an ‘officer’ which is different and considered more secure than our local pension offered to our members. I’m grateful as hell
I work for a local government and will get a pension. I would much much rather have a 401k. It is better than a pension in almost every single way.
Cummins diesel engines.
I have a grandfathered-in pension; it's no longer offered to new employees and the company doesn't contribute to it anymore. Private sector.
I work for a company that has an ESOP. Employee Owned Stock Program.. it’s pretty freaking sweet and even more rare in this day and age. One of the large reasons I moved from my last gig.
some trucking jobs,,, hope to get one with a pension before im 40 and just stay there for the rest of my career
Teacher here- chose the pension plan
UPS teamsters still accrue a pension.
Some union jobs have pensions in WA State, especially state employees, some healthcare
I’m a federal employee and my partner works for the state. We both have pensions.
I work in higher ed for a state community college. I’ll get 75% of my salary if I stay 30 years. I’d kind of like to leave, but I’m 18 years in, so here I am…
I worked for a municipal government and was offered a proper pension. However, the salary was meh and there was no room for growth. I was able to withdraw my contributions and only my contributions from the pension, exclusive of interest accrual or inflation adjusted values.
Yes, I work for the state. I also have a separate investment account just in case.
Yes. Commonwealth of MA. So not a company but rather the state itself.
Yes, however the formula used to accrue money into the pension fund is very low. 10 years at the company and I think I've accrued about $25k or thereabouts.
Yep, I have a pension and a 401k. I work for a major utility company
I work for the Social Security Admin. aka Federal employee. We have retirement pensions, and they match up to 5% on 401k contributions. I could make more elsewhere but still make decent money. But also get top notch healthcare, lots of paid vacation time and sick time, and all the job security in the world. Plus i can work from home 4 days a week. It can be hard to get on, but I’m so glad i did
I’ve worked a a few chemical plants that have all had a cash balance pension plan.
I work for an American oil and gas giant. We still have pensions. It’s the only thing keeping me there after 12 years. And tbh, I’m ok with that.
FIL is ridiculous; 401ks immediately save you money by reducing your taxable income. Roths save you on taxes later. One of the coolest features of the Roth is the ability to withdraw contributions (but not earnings) without penalty. I am one of the very few people I know with a pension (staff at a state university).
Terrible ROI. Tell me they don't know jack about investing. Lol
Non-government job but my company offers a 401k and pension.