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Are pensions still good anymore?

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Are pensions still good anymore?

Old 12-28-21, 05:23 PM
  #26  
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Originally Posted by I-Like-To-Bike View Post
Which S&P 500 fund (or any other fund) can anyone sign up for that guarantees an average 7% annual return compounded for the next 34 years?
Not guaranteed but if you average it out for the last 60 years you're right in there. Were in another 2000 or 2008 so when this thing goes it'll be ugly. With p/e's on the moon the ave return over the next 10 years will be low single digits.

Remember you have to add on the dividend which you (should) be reinvesting.

Last edited by stevel610; 12-28-21 at 05:26 PM.
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Old 12-28-21, 05:28 PM
  #27  
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To the OP, also be sure to Max fund your Roth IRA first. $6500 per year for which the growth is tax free.
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Old 12-29-21, 09:28 AM
  #28  
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I would stay away from the defined pension plan. The probability that you will stay with one company for over thirty years is very low. I thought I had found the job of my dreams with a very old and well established company, and that I would be there until retirement. Then the impossible happened and the company fell on hard times. I along with most of the senior staff was laid off, and with it went most of my pension. I was barely vested, and so I now receive a monthly deposit of $570, which is better than a sharp stick in the eye, but really insignificant. After that I went for jobs that simply paid the highest salary, and didn't worry about all the other benefits. I am now comfortably retired with most of my income coming from retirement accounts (IRA and 401(k)) and taxable investments. Social Security represents only about 20% of my total income, and I could certainly not afford to live on it alone.
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Old 12-29-21, 06:31 PM
  #29  
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Old 12-29-21, 07:31 PM
  #30  
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Originally Posted by stevel610 View Post
To the OP, also be sure to Max fund your Roth IRA first. $6500 per year for which the growth is tax free.
Oh yeah that is the plan. Was thinking something in this order:

Roth IRA/Backdoor Roth
403(B) up to the matching amount
HSA - max out
457(B) - max out
529 - some reasonable small amount
Top off 403(B) if possible
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Old 12-30-21, 08:50 AM
  #31  
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Are pensions still good anymore?

Depends on the pension.

And you.

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Old 12-30-21, 08:54 AM
  #32  
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Fauci's defined pension will pay him $350,000 per year. I know a retired LEO (Statie) with nearly a $200K/year pension. They are great if you can get one but they don't exist very often anymore in the private sector.
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Old 12-30-21, 11:00 AM
  #33  
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Depends on the pension plan and its finances. I've got a number of years in the CalPERS (Calif Public Employees Retirement System) plan and I just let it keep building up once I left public employment about 5 years ago (got offered a private sector job that was too $weet to pass up). But make sure you diversify into other investment products - Roth-IRA, brokerage account, and any of those other products mentioned above. I'll be retiring soon when I turn 65 and I'll have that public agency pension, Roth-IRA, investments, a small 401K, and savings which should last well into old age.
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Old 12-30-21, 12:48 PM
  #34  
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Originally Posted by TejanoTrackie View Post
I would stay away from the defined pension plan. The probability that you will stay with one company for over thirty years is very low.
Yes. That's a huge issue. Eevery once and a while you will hear on, or read in, the news about how frequently the average person changes jobs in their lifetime. It's pretty frequent these days.

So if I had to choose between a DB and a DC plan, I would choose the latter. I am lucky in that my employer allows participation in DB and DC plans. I will have racked up 18 years of service as of the end of today. (We are off tomorrow.) It would be 21 years but I volunteered to be downsized back in '99, after only three years of service, in the wake of a corporate acquisition. At that time, my pension at age 65 (31 years later) would have been around $130/month. The present value was within the range that allowed me to stay in the plan or to cash out and take the present value. Thinking I would never come back to the company, I did the latter, figuring investing the cash (IIRC, it was around $9,000) over that 31 years would ultimately be worth more than $130/month starting at age 65. Unfortunately, by the time I was made an employee again (I originally came back as a contractor for the first 1.75 years) I was beyond the three-year period where you could buy back into the plan, so I had to start all over again.

The upside is that I got to take two years off from the working world. During that time, I logged about 10,000 loaded touring miles during three extended trips, including one across the U.S. and then some and one in Andalucia, Spain. I also saw a lot of matinee movies. I would not trade the experiences I had during my time off for the money and potential career advancement I sacrificed.
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Old 12-30-21, 01:13 PM
  #35  
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Originally Posted by EJ123 View Post
Interesting insight. Who knows what their future holds on the pension but overall seems like a solid company. I am going to try to maximize all these + personal Roth IRA + HSA + 529 + rest going to individual brokerage IRA. Seems like that would be hard to go wrong.
So did Kodak and it still tanked. You have to watch for how the pension is dealt with, Kodak didn't fund theirs right and assumed they'd still have money to keep funding it at need. Older retirees got to keep their pensions in the bankruptcy but their pensions were different in how they'd been treated.
I've got an employer funded pension but the employer doesn't hold the reins on the pension and they have to have the funds in at the end of the year. In 15 more years I'll get to retire with an estimated 3500 a month though I'll be too young to bother. Upside to the pension is the death benefit, if I kick it my wife and/or kids get the remainder of my annual pay for the year and the full potential retirement amount; wife till she passes, kids till they turn 21 which is a sweet aspect to being a part of it. I've also got a 403b through the company which I can access at 59 1/2 though it has options for a house down payment and other options, by 65 it should be close to over 1 mil though I've had to personally fund that. Next pay raise I'll probably start funding my Roth again though I doubt it'll surpass 100k by retirement. Figure with SS and the pension, plus wife has similar we'll retire comfortably and the 403b will help things stay stable.
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Old 01-06-22, 01:45 PM
  #36  
EJ123
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I was talking to another similar company about their open position and their company only offers a 401k (even as a non-profit) + the 3% match and a 457. Seems like the first company that does the 401a, 403b, 457, AND the pension plan is much more appealing. Hmm.
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Old 01-09-22, 07:07 AM
  #37  
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A company I worked for deep sixed their pension plan and created 401k for everyone. Sure am happy with it as I had only worked for them for 9 years and the 401k is going to have a better draw on it than a meager 9 year pension. If you are seriously going to stay with the same company for decades, then a pension is fine. If you move around a bit such as myself, a company sponsored Roth or 401k is a better way to go. At least it has worked out that way for me.
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