Just need to vent...

I'll have to try to wrap my head around this one.

Looking through several government and medical jobs in my area, even ones that require a bachelor's degree or similar, don't seem to show any that offer pension plans. Even the ones I thought for sure had pension plans, such as RN, deputy or sheriff, are 401k's, not pensions. I guess pensions don't exist here and I'd have to move to some other part of the country, besides get 4 years of full time schooling at some $50k per year or whatever it costs these days.

 

Two years for an RN, four years for an NP is possible. Similar for medical techs using equipment. Never forget you have the mountain resort factor where employers can offer less in this supply and demand world.

 

If I remember right, social security uses your highest 35 years of income. Years from the past are inflation-adjusted so they can meaningfully be averaged with more recent years, and then the 35 best adjusted amounts are averaged together.

 

A significant increase in income for ten years makes a big difference

 

As I recall, though, there's nothing special about 'ten' years in the formula. A significant increase for nine years would make almost as big a difference, and for 13 years would make an even bigger difference.

The one number that is baked in is 35. If you have fewer than 35 creditable years of income, the missing years will be averaged in as zero, which'll cost ya.

 

Not our present state .... we're
taxed on retirement pensions, bank interest, SS, etc. But the tradeoffs are still worth it. ymmv.
.

 

That IS considered a pension plan in most modetn jurisdictions.
.

 

Freeze on property taxes which are high as we have no state income taxes.

 

The matching 401K is often one of the best investments that you can make. As an example (disregard the numbers), imagine that you earn $3000 a month. The company will match every dollar that you contribute with a dollar of their own. That's a 100% profit the day that you contribute every month. There's a limit on now much you can donate, but it adds up quickly. I recall that I had my contribution set to 20% of my income, so at the end of the first year my 401K had 40% of a year's pay in it.

My experience is that your 401K is vested as soon as you start contributing. Stocks and other incentives vest according to whatever plan the company uses. When I went to work for PG&E the signing bonus was mine the first day on the job. My contributions to the 401K were vested immediately (after all, it was my money). The stock options were vested (could be redeemed for cash) after 1 year and a second batch was vested at 5 years.

 

You're first I've heard say this. I was always under the impression that pay is generally higher here than most of the country. Minimum wage is $14.42. $778 for a seasonal ski pass per person (minors are $632), which is why none of us ski anymore since before we had the boys.

At any rate, I can't see how it would be possible for me to work a full time job and go to school full time for any amount of years, especially since I don't see how it's anymore of a golden ticket than just any job with a 401k.

A pension us when your employer figures it all out and hands you a fixed amount. 401k is a retirement savings account that's funded or partially funded by your employer. Then there are IRAs individual retirement accounts, like mine that only I fund with my own money.

Yep, better than my Roth IRA for sure!

 

Good luck getting people to work for less than $15 an hour in the deep South, even a high-schooler in a 'mall job.'

Oh wait....
Malls aren't around anymore - are they?

 

I think you are missing the point of targeted white collar work you could get through training - double or triple the income plus another 25-50% value in benefits. If you have excellent health and maintain it you could extend the prime accumulation period to 70 when starting at your age.

However many don’t want to “heads down” for a couple of years in school and work especially past 40. I understand that especially if the training is not local.

 

There's also real estate licensees. A lot of hard work but once you do the hardest work up front ... really working your nice person off - build up a client base, plastering your mug on signs all around town ... doing open houses for other agents - yeah ... a financially rewarding way to go (tough on family life too). Nobody ever said life was a cakewalk.

Looking back at a full lifetime's worth of contributing to Social Security (first year minimum wage $1.65 & 1st job making $2.00 in 1972) - their database showed I only made ~$5,800 that 1st (¾) year. 1 bdroom apt in sketchy area of town $69. 1st junker car $400.
LOL
Several of the last 30yrs were very low income - due to injuries, surgeries , sicknesses , school overseas, child care, job searches, Etc. By '79, with FHA loan (thank God that first house had an avocado tree that kept the grocery bills low) no longer a renter, but you can eventually get nauseous eating free avocados. Last few income yrs - some were in 6 figure range.
Yes - get those last 10 years up & Social Security will pretty good.
Make too much residual income upon retirement though and IRMA kicks in ... & medicare can make your monthly costs WAY more expensive.
.

 

+ you can't contribute more than 20 odd thousand. And businesses typically only contribute 3% - 6% of that amount.

401(k) contribution limits 2023, 2024, and 2025 | Fidelity

Unless of course you have many of the government jobs - & since they're giving away OUR money - they can be as generous as ½ the amount you contribute to your 401k
.

 

Hardly an absolute statement. The hundreds of thousands in our Roth would all be taxed - had it not already been taxed, which means I'm potentially going to lose 30% right there had it not been pre-taxed. And, taking out significant amounts upon retirement often activates IRMA, which means you have to pay substantially more for your Medicare treatments
YMMV
.

 

Much prefer vested 401k to a pension.
401k is your money inaccessible to others and generally insulated from the health or competence of the Company you work for.

Pensions these days are rare and getting rarer.
A concern with pensions is they depend on the stability and financial health of a company or business and how it will affect your pension - they are not guaranteed.
Some examples would be :
1. ask former Enron employees about how their pensions are going
2. ask UAW Members how confident they are of the health of their Pension Fund now that it is managed by the UAW
3. ask the City of Detroit pensioners how many pennies on the dollar they got on their pensions after Detroit declared bankruptcy

The pension safety net where the American public is forced to pick up failed Pension Plans is broken and may well fail very soon.

US Department of Labor reports distressed pension assistance program has protected benefits for more than 1.2M workers, retirees, families | U.S. Department of Labor

Rescue Package Includes $86 Billion Bailout for Failing Pensions - The New York Times

 

+1.
I actually have both - sort of.
My first year in telecom was when they shifted away from the traditional defined benefit pension plan to my company merely throwing a hand full of cash into a retirement fund that is investment based by a separate entity.
Of course - the REASON I got hired is that the company (unlike governments) could accurately project, year over year, my actual cost to them in for-real dollars instead of me being an open-ended and mostly unfunded liability for life.

Like I always say.
Labour unions are like public mass transit.

EVERYBODY is FOR them - for everybody ELSE.

The 'pension' is better than a poke in the eye with a sharp stick by a bunch - because at the end of my (projected) 30 year career I will have about half of my SS benefit amount.
HOWEVER (comma!!!!)
This is 2024.
People who have all of the dots on their dice will ALWAYS invest in a 401k which over the last nearly 100 years will beat SS by a country mile - which is probably why there should be some means testing to SS starting at.....(insert notional figure HERE, as long as it is above what YOU make!)

According to "experts" American individual SS will be about 40% of your peak income, more or less, ut many of those same "experts" suggest that you will need between half and 70% of that same income - leaving a sizeable gap (for some!)

I once read a book from a famous indigenous US Senator that stated that two incomes are a 'trap' - and so my CFO ('retired' for over 25 years) will draw half of my SS which will result in our PERHAPS being able to retire on SS alone - because in 2024 the max individual draw will be nearly $4900 a month - OR $7350 if you followed Liz's advice.

It's over $9700 if you don't - which is.....almost a 'living wage' if you live on free soil.

Governments, unlike unionized companies, can afford to keep stacking on unfunded liabilities.

....for now, anyway......

 

My pension was terminated after 20 years with the company so even though I never changed companies and just when I started making serious money. I kept a vested pension based on 20 years before retirement wages. Now converted this month to an annuity. My health care benefit in retirement was eliminated. That pension was based on now 40 years ago wages so I couldn't live on it alone.

I had been investing in a 401K/IRA since it became available. So in retirement, I have three income streams: pension/annuity, Social Security, 401k. Plus medicare. Then add private investments.

My wife worked for the Treasury department where she was urged to buy bonds. I-bonds every payday. Even though she quit in the middle to raise kids and went back later, she has a government pension. Because she also worked in private industry, some Social Security. 401K too. Some investments.

Best of all she has Medicare and a health care plan available to ex-Government employees for both of us with right of survivorship. Add in long term care insurance for both of us.

We never moved to a bigger house, never bought fancy cars. I commuted in a used car.

Why all this ...

To point out the value of diversification. And living below your current income.

Any plan or benefit can be eliminated or downsized. Any inflation increases can be eliminated. Even a 401K or a private investment can lose value.

Even with all this planning and diversification there are economic, political and geopolitical risks to all those sources of income. The markets can tank, the US currency could no longer be the world's standard, real estate could tank due to declining birth rates and deportations reducing potential buyers, Government policy could change as promised.

And when the living longer drugs are available, you'll need to fund a longer retirement.

 

Amen brother - preach it!

And that's why it's a disturbing vent ... when younger people expect the government to let them suck on their teet .... little care of what tomorrow may hold.
Some of the eggs in our retirement basket are also annuities. Also, we ladder them so that they vest after the prior one is exhausted.
We did get a very fancy house, but used the capital gains upon sale at retirement towards a retirement house - as well as paying off a rental which now streams income in the basket. Even when the dollar finally collapses, people will need a place to live, even if they can only pay rent as services or groceries, whatever.
Many of us here are children of the Great Depression experiencers. Thus we know/were taught frugality. Saving plastic zip lock bags, grocery sacks, glass mayonnaise jars, heck when someone misses the toilet I pull used TP out of the waste basket to wipe it off ... lower the winter thermostat & bundle up, canning food when "on sale prices" serve towards the budget, open/close all doors really fast during freezing Temps etc.
So now in retirement we can still go out to dinner, air travel, help out the daughter & grandkids.
.

 

Malls are disappearing.

Why do you compare getting people to work for less than $15/hr in one area with a lower minimum wage to the minimum wage of around $15/hr in another? You can't get anyone to work for less than $15/hr in Colorado because not only would it be beneath a high-schooler in a "mall job" it would also be illegal. Guess how many $14.42 jobs you will find in the employment section here in town. Zero. Most jobs start around $20/hr and up. The job openings I've been finding that I am able to do are between $20/hr and $27/hr.

This is what makes it all complicated. Ideally I'd work full time, 40/hrs a week total. Putting in potentially 80/hrs a week sounds like divorce and kids hating me for the rest of my life, and me hating myself for putting my retirement and health care above being a an active participant in the family. Maybe when the kids move out and if my wife passes away before I do, then I could go do such. I don't feel that shoveling money into our lives would make up for other things missed.

And there's the cost and distance. There is a university here. From what I've been told, it is really expensive, like, yearly tuition costing about what I'm making now per-year. And the main thing they offer that I could benefit from is from studying business (whatever that exactly means), the rest is biology, environmental studies, arts and recreation.

Something outside of the University would be too far away. You've been through Gunnison. The closest schools after the university here would be way past Salida or Montrose, hours just to get there, hours just to get back and closed or treacherous during the winter. So unless it's online or something local I haven't discovered yet, I'd have to move to go to school elsewhere.

I have no idea what IRMA or YMMV are. All I know is my Roth IRA account is up to me to fill up, and so far, I'm going to have to work the rest of my life because I just started it but don't have $5,000 in there yet. It would be nice to have an employer that contributes something. Then again, at 52 years old, I'd have to save around half of my income to have enough for retiring, even at 70.

This is what deters me from moving my family somewhere, working all night at McDonald's so I can go to school all day, and trying to get that "Pursuit of Happiness" job when, unlike Will Smith in the movie, we're not out on the street begging for shelter and food. Nothing is a guarantee! I can make every sacrifice possible to try to attain a prestigious job, then just before I start, get hit by a truck and my family is back to ground zero, along with whatever debts were incurred from the things I had sacrificed during the meantime.

Like I said before. I will do what I am capable of doing and no more. If what I do isn't worth health care and a retirement plan, then we don't get health care or a retirement plan. End of story. If I can make a good job with health care and retirement plan work for us without being that father and husband who neglects other aspects of his family life, then of course I will try to do that.