Retirement savings

[Anonymous]

Anonymous wrote:Cfiresim is a much easier version, but I doubt you need to use that either

Sorry that was in comparison to firecalc— not used to the new format yet

[Anonymous]

Anonymous wrote:Basically anyone with a pension will be fine in retirement.

Depends when you started.

For our state government:
Those who have recently retired/will retire in the next 5 years have amazing pensions. They did not contribute a dime, their pension is based on highest earning year (which magically seems to line up with a big promotion and pay bump right before retirement), and worker and spouse have fully funded health insurance. Pension amount is 2% of highest salary for each year for 20 years, 3% each year 20-30. Up to a pension of 70% of highest salary.

Fast forward to the state realizing this is not sustainable. Employees hired later contribute for the duration of their employment. Pension is based on a 5-Year average salary, with any salary amount that is over 10% increase of the average of the 5 years prior thrown out, your pension is 1.66% for each year 1-20, 2% for each year from 20-30. You can use state employee health insurance but you pay.

Of course, there are trade-offs. You don’t have to worry about getting laid-off in your 50s/60s!

[Anonymous]

If you start maxing out your 401K, you will have over a $1million in it by the time you are 58 (assuming a 6% growth). This means that you'd have another 40K a year you could safely withdraw at 58 on top of the 60K from your pension. So up the savings!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Basically anyone with a pension will be fine in retirement.

Depends when you started.

For our state government:
Those who have recently retired/will retire in the next 5 years have amazing pensions. They did not contribute a dime, their pension is based on highest earning year (which magically seems to line up with a big promotion and pay bump right before retirement), and worker and spouse have fully funded health insurance. Pension amount is 2% of highest salary for each year for 20 years, 3% each year 20-30. Up to a pension of 70% of highest salary.

Fast forward to the state realizing this is not sustainable. Employees hired later contribute for the duration of their employment. Pension is based on a 5-Year average salary, with any salary amount that is over 10% increase of the average of the 5 years prior thrown out, your pension is 1.66% for each year 1-20, 2% for each year from 20-30. You can use state employee health insurance but you pay.

Of course, there are trade-offs. You don’t have to worry about getting laid-off in your 50s/60s!

Thank you for this but can you pls clarify - why only those retiring in the next 5 years as opposed to 10 years?

[Anonymous]

Op - yes I logged into my online pension account and that is what it says $5700 per month at retirement age.

I will have been with my state agency for 30 years if I stay til 57.

[Anonymous]

Anonymous wrote:Op - yes I logged into my online pension account and that is what it says $5700 per month at retirement age.

I will have been with my state agency for 30 years if I stay til 57.

That’s a good pension payout. Better than fed system. Hope your state govt can deliver on their promises

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op - yes I logged into my online pension account and that is what it says $5700 per month at retirement age.

I will have been with my state agency for 30 years if I stay til 57.

That’s a good pension payout. Better than fed system. Hope your state govt can deliver on their promises

Op - I think the payout is based on my new salary of $130,000 not my old salary of $65,000

I have no plans on leaving so the calculator seems accurate if I stay until 57/58 years old. Presumably my salary will go up in the next 18 years even if it’s just cost of living adjustment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op - yes I logged into my online pension account and that is what it says $5700 per month at retirement age.

I will have been with my state agency for 30 years if I stay til 57.

That’s a good pension payout. Better than fed system. Hope your state govt can deliver on their promises

Op - I think the payout is based on my new salary of $130,000 not my old salary of $65,000

I have no plans on leaving so the calculator seems accurate if I stay until 57/58 years old. Presumably my salary will go up in the next 18 years even if it’s just cost of living adjustment.

As a comparison I think my pension at 62 is about that amount. Based on 38 years in fed system at 183500 salary. You can see your numbers are much better than mine

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op - yes I logged into my online pension account and that is what it says $5700 per month at retirement age.

I will have been with my state agency for 30 years if I stay til 57.

That’s a good pension payout. Better than fed system. Hope your state govt can deliver on their promises

Op - I think the payout is based on my new salary of $130,000 not my old salary of $65,000

I have no plans on leaving so the calculator seems accurate if I stay until 57/58 years old. Presumably my salary will go up in the next 18 years even if it’s just cost of living adjustment.

As a comparison I think my pension at 62 is about that amount. Based on 38 years in fed system at 183500 salary. You can see your numbers are much better than mine

Op here - I see what you are saying. Yes my payment is good. I think my state is solvent and will be able to pay out. I am lucky to have this pension plan. It has changed over the years and the newer one isn’t as good. I have been with my state agency going on 13 years, so I have a better plan.

[Anonymous]

DP
I’ve been with our public school district for 30 years and I’m retiring at the end of June at age 52. The state retirement pension with a chosen survivor benefit will be about $4,350 with a healthcare subsidy added in. It has a COLA max of 5%. The COLA is based on the annual monthly average of the Consumer Price Index for all Urban Consumers (CPI-U), published by the U.S. Bureau of Labor Statistics and updated each July 1.

I have a supplemental district pension that will be $2,900 until SS age 67. COLA is 1.5% year 1 and then 3% every year after.

I’ll continue to work, at least part-time, so consider this semi-retired.

[Anonymous]

You need a minimum of five million in retirement savings to retire at 67.

And much more if you retire younger.

I am 60 and married and I have 2.7 million in 401ks, 2 million in after tax cash and stocks and 1.8 million in home equity.

I need to work till 67-70 to retire at earliest.

[Anonymous]

Anonymous wrote:You need a minimum of five million in retirement savings to retire at 67.

And much more if you retire younger.

I am 60 and married and I have 2.7 million in 401ks, 2 million in after tax cash and stocks and 1.8 million in home equity.

I need to work till 67-70 to retire at earliest.

That’s way different than my estimates. How did you figure your numbers? Particularly min of 5 million estimate?

[Anonymous]

Anonymous wrote:You need a minimum of five million in retirement savings to retire at 67.

And much more if you retire younger.

I am 60 and married and I have 2.7 million in 401ks, 2 million in after tax cash and stocks and 1.8 million in home equity.

I need to work till 67-70 to retire at earliest.

Perhaps that’s what you need to maintain the lifestyle you desire but considering that the average retirement savings for those in the 55-65 bracket is less than 200,000 clearly your perspective is warped.

Op is retiring with a pension of over $5,000/month. Plenty of people live off of salaries less than that throughout their lives.

[Anonymous]

Anonymous wrote:You need a minimum of five million in retirement savings to retire at 67.

And much more if you retire younger.

I am 60 and married and I have 2.7 million in 401ks, 2 million in after tax cash and stocks and 1.8 million in home equity.

I need to work till 67-70 to retire at earliest.

OP here - so I should have $5 million minimum in savings WITHOUT counting my pension?

[Anonymous]

The safe withdrawl rate for $5 million is $200K a year. This does not account for pension or social security. Very few people need that amount of money for retirement when you likely have no mortgage and don't have to save for things like retirement and college.