Ha, I should tell that to my union! They are actually strongly considering negotiating away our DB plan in lieu of a variable benefit plan, and many of us think they are completely insane. It’s even their idea. We are wondering why they are doing it…but maybe that’s the answer, they have half a brain.
I guess I don’t understand what your definition of “better retirement” is.
Neither DW nor I will have a pension, but we will be better off in retirement (by my definition) than either of our parents, who did have pensions. At least by current projections, it is a riskier path no doubt.
My definition is purely financial - dollars in, dollars out.
Yes but then ALL of our premiums increase because, once again, hospitals will be on the hook for whoever shows up at their door uninsured.
@busdriver11 Noooo!!! They don’t know how good they have it. if I had to pick one thing it would be retiree healthcare coverage. I’m a contractor now, but my company is very generous with the match and profit sharing contributions. They basically dump 17% of your salary into the 401k between the match an profit sharing contributions. I always said when I was working full time , they could keep some of that and allow us to opt into the health plan even at a higher premium. We’ve had a couple surgeries in the family over the last two years and with a high deductible plan at 5k and 20% of the remainder is a lot of money! We are healthy now. Neither one of us take any meds which is very unusual at our age so I shudder to think about our medical costs. Fortunately my husbands job is one that they really don’t discriminate on age with male execs so I imagine he will work a long time.
Gosh, partyof5, 17% of your salary into a 401K is pretty dang good, particularly if you have a high salary. I suspect that our younger guys/gals who plan on having 30-35 years ahead of them working would prefer that over our DB plan with no COLA. For the mid level, older people, no go.
Good, low cost healthcare coverage is a blessing. I think we have paid less than 1K in deductibles/copays, though my husband has racked up over 100K in health care expenses. Medical costs can be insane.
^ I didn’t say it was a good idea. In fact, it’s a terrible idea.
That’s not what I meant, and I apologize if you took offense to my statement.
Pension money doesn’t come from a vacuum. Contributions to your parents’ pension plans is really part of their compensation, even if it doesn’t show up on their paystub.
You said your parents “will have a much better retirement even though we make more money than they did.”. Are you making more money in real terms - inflation-adjusted and counting all forms of compensation?
If you are truly making more than your parents in real terms and counting all compensation, what is your explanation for why your retirement won’t be as good? Sure some of it can be explained because you had to spend more on putting your kids through school, and maybe spending more on housing, but you are also making more.
Pension plans aren’t magic. They take money in, they invest it, they pay it out.
I can see why parent’s tuition work benefits are taxed and since they are taxed to the parents not the students I’m ok with that. I think it’s wrong to tax grad student’s tuition waivers.
I’m most upset with them not doing anything about the kidee tax on undergrad scholarships. I thought the whole idea was to simplify taxes. The whole kidee tax is just crazy complicated! I’m fine with kids paying taxes on their taxable portion of scholarships but not at their parents tax rate! It is not as simple as people here and various web sites make it out to be. If the student can be claimed on the parents taxes there is some formula to figure out the student’s standard deduction, it isn’t a fixed number. If the student also has earned income and unearned income it will effect their standard deduction.
If that weren’t complicated enough if the student has a sibling that also has taxable scholarships money both are added to the parents income to figure out the tax rate and the first sibling may owe taxes at different rate than the second because the second kid moved it to a higher tax bracket! How is this fair? This is crazy complicated! Oh and since dd earn a lot of scholarships that we weren’t expecting and taxed at our tax rate she had to pay a penalty for not scheduling quarterly payments her freshman year! yes we could have filed volumes of additional paperwork to show that the scholarships were earned in the last quarter but it was easier to pay the penalty than to do the paper work!
The CBO says that without the individual mandate, eventually 13 million people fewer will have insurance. There will be a loss in revenue from people no longer paying the individual mandate penalty, but that will be outweighed, according to the CBO, by people dropping subsidized insurance and people dropping Medicaid.
It’s strange that the CBO believes that we can save money by having people drop Medicaid. Medicaid is typically free to the subscriber, and the government only pays for treatment, not for healthy people on Medicaid. So the CBO has to be assuming that sick people will drop Medicaid-- but why? However, the CBO has maintained all along that the individual mandate has a strong effect on people getting insurance.
If healthy people do drop private insurance, that will drive premiums up up up for the people who remain on private insurance. The CBO predicts a 10% rise in premiums.
@busdriver11 yes as long as you defer at least 7% the match and ps gives you 17%. It is quite generous but as a contractor Im no longer eligible for the match and profit sharing. My hubby is the primary breadwinner and it would be nice if his plan was as generous. He is limited as to what he can even put in the 401K due to non discrimination testing so we have a hard time amassing significant money into pretax accounts. He has to contribute into the deferred comp but as you know if you leave the company that pays out as wages and there are all these rules about deferring the payouts depending how the plan is written.
@notrichenough as I explained earlier it’s not just their pension, it’s all things combined. They each have nice pensions, along with 401ks, social security and very generous health insurance.
College was not 25-50k per year, nor was housing in a good school district expensive.
We have spent a ton on health insurance premiums along with our 20% of the 80/20 plan we are in. My parents never have any serious medical bills because their insurance is so good. When one passes , the other still gets to keep the insurance.
https://www.cbo.gov/publication/53319
https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1hoyerletter.pdf
^^^ they are playing with fire. AND they drastically undercut the CBO’s projected increases in Medicare and Medicaid payouts when they passed the budget so they knew that cuts to both would have to come down the line.
Oh cool so now they’re trying to pass TWO wildly unpopular things in one. If that doesn’t sum up the several years in congress, I don’t know what does.
What @partyof5 is saying - H’s pension (which wont be subject to NYS income tax,) plus 403B, plus our Roth’s, plus our SS, plus free health insurance after retirement (including Medicare premium) our retirement is going to be economically worry free - and that’s even before whatever inheritance we will get.
As it is all our fixed expenses (auto & home ins including son’s for now) car payments, cable, eclectric, heat, phone, lawn care, etc., etc., ) including our mortgage, is only 25% of our after tax income now. H has 3 more years until retirement and they will be his highest earning years - which is what his pension will be based on. He also will do something since he will only be 62 - probably consulting - so no need to even take SS until we are required to.
H contributed to his pension for his first 10 years but after that no contribution at all.
@emilybee You all have a nice deal! Wow we make good money now we didn’t always and we had our kids very young. The nice thing is we are still young and we only have one left in college. The bad thing is we are priced out of tax sheltered savings. I can put in my 401k but hubby is limited, due to testing. We don’t get the college credit, the child tax credits, nor were we allowed Roth contributions for many years until they added a Roth feature to 401k plans.
@partyof5, we’ve been done with college for almost 3 years but before college we also had 4 years of private high school, plus 8 years of all summer sleep away camp @10k for 7 weeks. But only one kid! Since #lifeaftertuition it’s been easy street.
The early years were very difficult as we had expensive fertitily treatment then adoption - which left us 85k in debt and took us 5 years to pay off while H was making peanuts (maybe $45k-$65 over those years) and it took him many years to work his way up the ladder to where he is today. I had also stopped working because it was mentally and emotionally draining and when we finally got our S, no way was I not going to stay home with him. I never went back to work.
If my dad (career military) and my FIL (union electrician) didn’t have pensions, you can guess who would be supporting them now. Neither saved any money outside of the pension other than ten years in a 401k, and neither ever broke $50k/year in earnings.
My four siblings are in the same boat, with under $50k in earnings per family – and only one has any retirement savings or pension.
Wish my current employer offered a 403b option. I would throw my entire paycheck into it (which is well under the EE deferral limit). We max out DH’s 401k (but it doesn’t have a Roth provision) plus he’ll get a DB pension, which he also contributes to. I have an IRA with all my rolled-over retirement savings, and we’ll both have SS in whatever form it takes in 2028. Retirement medical coverage is not free, but we can coordinate Medicare without current plan, so at least we’ll have good coverage. We should be OK, but almost everything is tied up in retirement vehicles vs. unrestricted funds.
Maybe… but probably not… we’ll be done paying off our college loans by the time our first kid is in high school. 
It’s going to get harder if I have to suddenly take out loans in grad school
lol I had a baby two weeks before my husband started grad school, and another one two weeks before he graduated during finals week. Talk about timing!! @romanigypsyeyes It took us quite a while to pay off student loans.
Some of the large company CEO’s are saying they won’t expand and invest with tax breaks, top two choices are paying down debt and stock buybacks. Why we need a massive tax break for major corporations that are in the good times right now (apparently this does little for small companies), at the cost of massive debt and many individuals, is a mystery. They’re already getting record profits and not expanding and investing, why would they do so now if this passed?
Corporations did the exact same thing last time (2004) when there was a repatriation of overseas funds. They aren’t going to raise wages or expand/invest in their businesses. But there is a vast number of people who will buy into the talking points that giving tax breaks to corps will be good for the working person.