Make a Plan For Prosperous Retirement

[MULTIZ321]

Make a Plan For Prosperous Retirement
By Elliott Raphaelson/ Business/ Success/ The Savings Game/ Chicago Tribune/ chicagotribune.com

"For many Americans, the difference between a secure retirement and an uncertain one comes down to how well they plan.

Here are some major factors that will affect your well-being in retirement:..."

Dreamstime

Most of these topics have been discussed in previous Tug posts. I included this link because the author recommends some reading about Social Security - "Social Security: The Inside Story" by Andy Landis (www.andylandis.biz) and "Get What's Yours: the Revised Secrets to Maxing Out Your Social Security" by Laurence Kotlifoff, Philip Moeller, and Paul Solman.


Richard

 

[VacationForever]

Just someone selling himself...

 

[Passepartout]

Just someone selling himself...

Maybe true, and (though I didn't read the article- it's almost 10 years too late now) much of the advice has been hashed out over and over, one thing's clear. A prosperous retirement doesn't just happen, short of a lottery win, or a surprise windfall inheritance. There are certain tried and true steps that help ensure one. Saving early, putting the savings to work, managing debt, and taking care of your health among them.

 

[Talent312]

My more specific guide to a prosperous retirement:
> Work 30 years for an agency with a healthy pension plan and COL adjustment.

Saving early+regularly with diversified investments helps, also.

 

[VacationForever]

My more specific guide to a prosperous retirement:
> Work 30 years for an agency with a healthy pension plan and COL adjustment.

Most of us are not that fortunate. Getting such a job is 20 percent planning and 80 percent LUCK.

 

[elaine]

> Work 30 years for an agency with a healthy pension plan and COL adjustment.
agree, I read that this can be "worth" up to $1M in retirement savings. But this is almost impossible for those under 40. Most employers have phased out or no longer offer pensions. I expect agencies will follow in the next 10-15 years, as well. Plus, in the private sector, with buy outs, changing skills market, reorgs, job center going offshore or relocated to a different state, spouse getting relocated, a decreasing number have the option to stay at the same employer for 30 years.

 

[funtime]

But you can investigate re-activating a long ago pension benefit. I returned to a state government job after a 30 year break. When I left state service in 84 I did not withdraw my pension, but just let it ride. Then I re-joined state service in 2007 and I was given the pension benefits that I originally earned and all the benefits that were given to employees when I originally started. That was huge, because back in the day, vested pensioners got all their health benefits paid for. And the salaries are so much higher today than in 1984, that I have now managed to increase my actual pension 10 times over! I have put in 10 more years, and purchased 5 years credit. When I mention this to others at my tennis club as a retirement strategy, the members just shrugged. The thought of going back to teaching or civil service just seemed so remote. But it is very doable.

 

[bogey21]

My more specific guide to a prosperous retirement:
> Work 30 years for an agency with a healthy pension plan and COL adjustment.

Pretty much what I did although it wasn't with a Government Agency. What I did (with the blessing of my top employees) was cut a deal with my Board of Directors;i.e we would take below market salaries in exchange for a relatively rich Pension Plan with an annual cumulative 3% Cost of Living Payment. I retired 17 years ago and am still collecting. Get this. My last Cost of Living payment (on January 1st) was approximately 50% of my annual pension. The sad thing is that some of my employees took the lump sum option and either lost or spent most of it and now rely on Social Security alone.

George

 

[WinniWoman]

> Work 30 years for an agency with a healthy pension plan and COL adjustment.
agree, I read that this can be "worth" up to $1M in retirement savings. But this is almost impossible for those under 40. Most employers have phased out or no longer offer pensions. I expect agencies will follow in the next 10-15 years, as well. Plus, in the private sector, with buy outs, changing skills market, reorgs, job center going offshore or relocated to a different state, spouse getting relocated, a decreasing number have the option to stay at the same employer for 30 years.

Even for us in our 60's. We have been victims of corporate takeovers and layoffs throughout our lives. Didn't matter how loyal we were or how much we tried to stick it out. My husband is so close to the finish line and now we are again hearing of layoffs. As for me- worked all my life and will get nothing outside of what I was able to save- and I mean zip!

 

[VacationForever]

Even for us in our 60's. We have been victims of corporate takeovers and layoffs throughout our lives. Didn't matter how loyal we were or how much we tried to stick it out. My husband is so close to the finish line and now we are again hearing of layoffs. As for me- worked all my life and will get nothing outside of what I was able to save- and I mean zip!

Hang in there. As soon as you and your husband figure out this retirement financial thing, then you can stop working and be stress-free.

A late colleague of mine often said "It is what it is." He passed away at 62 and he was one who was adament that government make good on Social Security payments. I feel sad whenever I think of him because he died while he was still working, he had a heart attack during a business trip, and never got to collect Social Security.

I sometimes reflect on my life/career. Luck and opportunities definitely play a huge part in where they take us. I have been fortunate to graduate with a right degree and work opportunities that came my way. Still, it is nothing like having a nice pension that takes care of finances and health care in retirement. I would swap a nice pension for what I have saved any day.

 

[geekette]

Still, it is nothing like having a nice pension that takes care of finances and health care in retirement. I would swap a nice pension for what I have saved any day.

What pension takes care of health care? That must be a very rare beast.

I am happier being a 401k kid because I know it is up to me, not the wishes nor fortunes of a company. Too many people have had, are having, will have pensions evaporate. The PBGC is quite stretched and it will be getting worse as the multi-employee programs hammer the reserves. The first "stolen pension" I knew of was maybe 30 years ago. My best friend's mother had been exec assistant to a VP in a major corp, over 20 years into the job. Company bought, all seniority slashed, including pensions. Gone, just like that, through no fault of her own. So now she is past 80 and still working.

No way I would want my elder years riding on what happens to a company I left decades ago. How do you really know the pension will be there, that they actually funded it? Depends on company, but also the marching of time. Sometimes, companies fail to thrive, become obsolete, and disappear. With that can go a pension.

Look, I'm happy for anyone that gets a nice secure payment every month and can expect that to continue. I'm just concerned for those that will experience the rug pulled out from under them.

Young'uns, look out for yourself and be wary of promises of future money.

 

[lizap]

What pension takes care of health care? That must be a very rare beast.

I am happier being a 401k kid because I know it is up to me, not the wishes nor fortunes of a company. Too many people have had, are having, will have pensions evaporate. The PBGC is quite stretched and it will be getting worse as the multi-employee programs hammer the reserves. The first "stolen pension" I knew of was maybe 30 years ago. My best friend's mother had been exec assistant to a VP in a major corp, over 20 years into the job. Company bought, all seniority slashed, including pensions. Gone, just like that, through no fault of her own. So now she is past 80 and still working.

No way I would want my elder years riding on what happens to a company I left decades ago. How do you really know the pension will be there, that they actually funded it? Depends on company, but also the marching of time. Sometimes, companies fail to thrive, become obsolete, and disappear. With that can go a pension.

Look, I'm happy for anyone that gets a nice secure payment every month and can expect that to continue. I'm just concerned for those that will experience the rug pulled out from under them.

Young'uns, look out for yourself and be wary of promises of future money.

Excellent comments. Most state pensions are hugely underfunded. Louisiana's state pensions are tremendously underfunded. State law requires that they be funded at a much higher level in a few years. Guess who's going to foot the bill. I wouldn't want my future retirement resting on many of these states..

 

[VacationForever]

What pension takes care of health care? That must be a very rare beast.

Most of them do. Whether its GE, Ford, State or Federal pension. They all include the health care element.

 

[lizap]

Most of them do. Whether its GE, Ford, State or Federal pension. They all include the health care element.

Most people with state and federal pensions have excellent health insurance pre and post-retirement. Guess who pays for it..

 

[ace2000]

Most people with state and federal pensions have excellent health insurance pre and post-retirement. Guess who pays for it..

Their employer? That's who directly funds it, however I see your point. It's all part of the salary package though.

My wife and I will both be eligible for a state pension plan. On the other question about medical, neither of us will get health benefits with our package. However, my employer did recently offer an incentive for early retirement where they would pay for health insurance up to Medicare age. Several took advantage of it, but they told us this year that they would probably never do that again because it did not pay off like they thought it would.

 

[wilma]

Most people with state and federal pensions have excellent health insurance pre and post-retirement. Guess who pays for it..

Federal employees pay 28% of the health care premium. What do you propose, eliminating their coverage? There are many unfilled doctor and nurse positions at the VA, you think bad health care coverage (in addition to lower wages than the private sector) will help fill those positions. We need to work towards adequate coverage for everyone instead of demonizing those who currently have better health care.

 

[lizap]

Federal employees pay 28% of the health care premium. What do you propose, eliminating their coverage? There are many unfilled doctor and nurse positions at the VA, you think bad health care coverage (in addition to lower wages than the private sector) will help fill those positions. We need to work towards adequate coverage for everyone instead of demonizing those who currently have better health care.

I agree with you completely (hopefully Denise doesn't close this thread - need to get back to the original intent of the thread).

 

[elaine]

getting OT-but going back to the under 40s. I don't see how the average under 40 can save anything for retirement with student loans and childcare. The only way someone can make it, IMHO, is in a non-urban, cheaper environment where one spouse does not work and there are low student loans. Otherwise, housing, loans, and childcare is essentially the entire paycheck--not even adding in cars, cell phones, etc.
15 years ago, with 3 young kids, DH and I both went PT (alternating days off) with a PT nanny. Otherwise, I would have had to clear $50K just to pay aftertax daycare center fees. DH and I both had no student loans and jobs that allowed us that flex--but what about those who don't?
I'm seeing more multigenerational houses. I think we will move towards that--with grandparents taking care of grandkids and the young adults working. Actually makes a lot of sense. That might be the new retirement.

 

[VacationForever]

getting OT-but going back to the under 40s. I don't see how the average under 40 can save anything for retirement with student loans and childcare. The only way someone can make it, IMHO, is in a non-urban, cheaper environment where one spouse does not work and there are low student loans. Otherwise, housing, loans, and childcare is essentially the entire paycheck--not even adding in cars, cell phones, etc.
15 years ago, with 3 young kids, DH and I both went PT (alternating days off) with a PT nanny. Otherwise, I would have had to clear $50K just to pay aftertax daycare center fees. DH and I both had no student loans and jobs that allowed us that flex--but what about those who don't?
I'm seeing more multigenerational houses. I think we will move towards that--with grandparents taking care of grandkids and the young adults working. Actually makes a lot of sense. That might be the new retirement.

It depends on the college major and work opportunities. People who work in high tech, financial industry, state and federal bodies are either well paid or have work pensions. There was a study that showed for the same work, a high tech company worker makes at least 30K more than someone else working in non-emergent or service type industry. The gap is even greater for higher positions.

 

[lizap]

Federal employees pay 28% of the health care premium. What do you propose, eliminating their coverage? There are many unfilled doctor and nurse positions at the VA, you think bad health care coverage (in addition to lower wages than the private sector) will help fill those positions. We need to work towards adequate coverage for everyone instead of demonizing those who currently have better health care.

Used to be true that government workers were paid lower but had better benefits. Not always true any longer. The benefits typically are still excellent (compared to the private sector) and often the pay is as good or better. For example, some professors at large research universities now make 200k+ and have great benefits. Have a friend who's an attorney for the federal goverment who makes 150K+. Pay in the public sector has gotten more competitive in many cases while the benefits have remained excellent..

 

[VacationForever]

In California there were several articles that showed state employees were paid more than private sector, for base salary, and significantly more after accounting for pension and health care.

This 2017 publication by California Policy Center shows twice as much as private sector:

http://californiapolicycenter.org/c...make-twice-as-much-as-private-sector-workers/

 

[geekette]

getting OT-but going back to the under 40s. I don't see how the average under 40 can save anything for retirement with student loans and childcare. The only way someone can make it, IMHO, is in a non-urban, cheaper environment where one spouse does not work and there are low student loans. Otherwise, housing, loans, and childcare is essentially the entire paycheck--not even adding in cars, cell phones, etc.
15 years ago, with 3 young kids, DH and I both went PT (alternating days off) with a PT nanny. Otherwise, I would have had to clear $50K just to pay aftertax daycare center fees. DH and I both had no student loans and jobs that allowed us that flex--but what about those who don't?
I'm seeing more multigenerational houses. I think we will move towards that--with grandparents taking care of grandkids and the young adults working. Actually makes a lot of sense. That might be the new retirement.

But these are choices.

I intentionally did not borrow more than I could reasonably repay to get through school and brought savings into it from age 13, plus worked full time throughout. I didn't live in places I couldn't afford, had a roommate when I needed to. Didn't buy new cars I couldn't afford and of course never leased; drove those cars until repairs reached a point at which replacing with another used car made sense (one brand new car when I was 32 and I drove it 14 years and replaced with 6 yo). Squirrelled something away from every paycheck. No one paid my school, no one gave me a down payment for a house. When I could afford to up my living standards, I did so. Modestly. The only reason I have a bit of land (1.5 ac) is because I was willing to buy the old house in my price range vs pop for super new more expensive house on postage stamp yard. I can stay here until my last breath, if I so choose. I am also childless by choice.

I take jobs that interest me vs the very highest paycheck. Had I chosen otherwise and kept gunning for top dollar, maybe I could retire sooner, but I decided that I valued happiness over money. I have chosen to live on my own terms and at this point am glad I didn't chase the stressful larger dollars as I think my body and mind would both be much worse for the wear.

Multi-gen is a great solution for families that can make it work, but it wouldn't have worked in our family. We were expected to leave the nest and go fend for ourselves. We all lived up to the expectations set for us. Once on my own, I wasn't calling Daddy to bail me out, I managed my own financial problems and am better for it.

Choices have consequences, some positive and some not. Many choices tie back to finances, and managing money is a personal matter. I am sure I spend on things others would never dream of and vice versa. Choice is good.

 

[Luanne]

Most of them do. Whether its GE, Ford, State or Federal pension. They all include the health care element.

Maybe.

I worked for big telecom for 31 years. I did retire with a pension and healthcare. Some of the people I worked with who started with the company after I did would be getting NO paid healthcare when they retired.

 

[geekette]

Maybe.

I worked for big telecom for 31 years. I did retire with a pension and healthcare. Some of the people I worked with who started with the company after I did would be getting NO paid healthcare when they retired.

Yes, the start date matters, as it seems this is a benefit from a bygone time. The folks I know that are my age (50ish) that do expect a pension will get a fixed payment and that's it, no health coverage/subsidy. I don't think it is common anymore.

Anyone under 30 here that is supposed to get a pension with healthcare?

 

[klpca]

It depends on the college major and work opportunities. People who work in high tech, financial industry, state and federal bodies are either well paid or have work pensions. There was a study that showed for the same work, a high tech company worker makes at least 30K more than someone else working in non-emergent or service type industry. The gap is even greater for higher positions.

My husband has worked in the tech industry for over 35 years - and not one of those companies offered a pension. Some had generous 401(k) matches but there was never any kind of pension offered as a benefit. I have always worked in the finance industry but for a small business - so obviously no pension either. I don't even have a 401k match any more, but I have a lot of flexibility and I'll be sticking it out for a few more years.

My MIL can't wrap her head around us not having a pension and lifetime health benefits - she keeps thinking that my husband made some kind of mistake along the way. My FIL retired at 56 with a full pension and benefits. One can only dream...

That said, we have always been prolific savers and we live below our means, so we will be fine.