<p>BCEagle91, great post.</p>
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<p>Change “most” to “all”, and you would be 100% correct. But to be perfectly honest, most politicians intertwine the public’s best interests and their own. You know what they say: Where you sit is where you stand.</p>
<p>There was a big fuss here last year over over triple-dipping - retirees who were collecting a pension, working part-time for a public school system, and then collecting unemployment during school vacations.</p>
<p>The problem with the double and triple dippers is they taint the people who do the right thing.
Pensioners get painted with the same broad brush. </p>
<p>I find it interesting that we don’t read positive comments about people who could make 1 million in the private sector and choose to work in the public sector for a third the pay. Or somebody who could make 250,000 in the private sector, but who would rather work in the public sector for 100,000. </p>
<p>I would like to get rid of the crooks. </p>
<p>The tom1944’s of the world get screwed…</p>
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<p>I had a former friend that double-dipped. He was a civil-servant that put in his years in CA and then moved to FL (after selling his home for a ton of money) and then got the same civil servant job in FL while collecting his CA pension. None of the pension reform laws dealing with double-dipping work across state lines. I thought that he had a great thing going - the root problem of course, was that the service period was too short for his CA job. Is that the employee’s fault? Maybe if the employee lobbied for the short service time.</p>
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<p>You can’t. The political system doesn’t work that way. Politicians need a support structure for higher offices and that is paid for by jobs and benefits. You need people to campaign for you, get others motivated, etc. Politicians also may need votes too. A speaker might need someone to vote a certain way that angers constituents and so the Speaker may promise the lawmaker a job somewhere if the lawmaker loses the next election because of that vote.</p>
<p>“I would like to get rid of the crooks.”</p>
<p>Well - they’re not crooks if they don’t break the law. Here teachers and administrators can retire in one town, collect their pension and then work in another town in our state as a teacher and collect. Some teachers and administrators in the city where my wife works, retired, collected a state pension, a city pension and were rehired in “shortage” areas. They’re making considerably more than they were before they retired.</p>
<p>We are never going to get rid of the crooks. I agree.</p>
<p>I don’t see tom1944 getting much sympathy for the fact the politicians are not honoring the contracts and are cutting his pension. Am I wrong about that?</p>
<p>I think that we all have stories where we’ve been wronged by government organizations or private companies or someone causing an accident resulting in property damage to us. And we roll with the punches. The folks in this thread (the regulars) seem to be pretty good at rolling with the punches and planning for the future despite various risks out there. I whine about stuff from time to time but I think that everyone knows that I can just deal with with the root canal, unexpected tax bill or having to bail a relative out of a jam.</p>
<p>The person that really has a problem, and we have them here, get the sympathy. The people that are more than equipped to deal with their problems get a listening ear.</p>
<p>dstark - “The problem with equities is the volatility in prices. Many elderly investors have a problem with that. When stock prices drop investors get nervous. Plus many investors want fixed income.”</p>
<p>OK, I offered up what was/is considered a solid long term investment tenet of grabbing inflation adjusted 4% of your portfolio every year. Its based on #s for the past 85+ years. But that’s not a good solution because the investor would get nervous. Or they have a problem with that. And they’d really like a solid yield to depend on. </p>
<p>My children would like cake & ice cream for breakfast tomorrow. That’s not how it works at our house, so they won’t be getting that.</p>
<p>If some investors want the inflation adjusted 4% withdrawal without equity exposure (or only equities that rise in value) and emphasizing fixed income, I’ll invite them over the next time we serve cake & ice cream for breakfast. Either that or maybe get used to a 1.5% withdrawal rate or get a solid adviser who can help them in understanding risk. Having too little equity exposure is a risk too.</p>
<p>I know that many elderly investors are not going to be game for this. But that does not change the legitimacy of withdrawing a inflation adjusted 4% by using a solid investment plan. Not risky. Or esoteric. Solid. Tested.</p>
<p>< “The economy going forward may grow less than than the past.”
We better hope not. We are barely out of the recession.</p>
<p>< What do you mean legit? The past does not predict the future… 30 years is long enough?
The Trinity studies are based on 85 years. </p>
<p>< I drove a similulator in driver’s ed but it wasn’t the same as driving a car.
True, but unless someone comes up with the ability to accurately predict the future, what else do you suggest?</p>
<p>In the articles that were referenced that say the 4% withdrawal rate no longer holds up, there is a fair amount of estimating going on. The authors reference a 11% annual return of the S&P over 112 years. For the purposes of the study, they estimate a return of 9%. Huh? Their crystal ball must have told them the last 112 years worth of data was too rosy. So they knocked it down a few percentages. Seems like everyone does some estimating. It can’t just be OK when it supports the side you favor.</p>
<p>“In the articles that were referenced that say the 4% withdrawal rate no longer holds up, there is a fair amount of estimating going on. The authors reference a 11% annual return of the S&P over 112 years. For the purposes of the study, they estimate a return of 9%. Huh? Their crystal ball must have told them the last 112 years worth of data was too rosy. So they knocked it down a few percentages. Seems like everyone does some estimating. It can’t just be OK when it supports the side you favor.”</p>
<p>You’ve heard the saying: “Past performance is no guarantee of future returns”.</p>
<p>Sorry. I don’t expect equity returns of 11 percent a year going forward. Psychology matters. Volatility matters to returns. Lower interest rates matter. </p>
<p>I can’t predict the future but I am not comfortable with the 4 percent rule because there is no do over if it fails. I am not impressed with the past data. This isn’t a chemistry experiment. </p>
<p>What I say isn’t going to change whether the 4 percent rule is going to work. So go for it. Good luck.</p>
<p>BTW, AARP has this comprehensive calculator. It takes much more than just your incomes and saving into the equation. </p>
<p>[AARP</a> Retirement Calculator - How to Retire, Plan for Retirement](<a href=“http://www.aarp.org/work/retirement-planning/retirement_calculator/]AARP”>Retirement Calculator From AARP - How Much to Save?)</p>
<p>Have you tried FireCalc?</p>
<p>It can get a little complex, but has a lot of options:</p>
<p>[FIRECalc:</a> A different kind of retirement calculator](<a href=“http://www.firecalc.com/]FIRECalc:”>http://www.firecalc.com/)</p>
<p>For those of you that have or had a pension in the private sector did you contribute to it or was it completely funded by the company?>>></p>
<p>From '77 to '84, mine was completely company funded. Back in those days, my personal retirements savings went into IRAs. Starting in '84, they changed to offering 401K’s with company contribution.</p>
<p>I don’t see tom1944 getting much sympathy for the fact the politicians are not honoring the contracts and are cutting his pension. Am I wrong about that? >>>>>>></p>
<p>Of course it’s wrong, of course they should honor the contract.
In general, I tend to be bitter about government employees getting to retire so young with a guaranteed income. While I work and work and work and work and still worry if I’ll have enough money. My brother was a guidance counselor and hasn’t worked a day since he was 55. I’m almost 62 and really…I have to keep going as long as I can.</p>
<p>BCEagle, it’s not double dipping if it’s two separate states, since the same taxpayers are not paying both a salary and a pension. Double dipping would be, for instance, if you retire from one job in the state, collect your pension, then get hired back at the same job as a consultant. </p>
<p>I worked with one private employer for 30 years then changed jobs for another employer. I will start collecting the pension I earned at my first job this year, but I plan to continue working at my current job for a while. That’s not double dipping either.</p>
<p>dstark, there are plenty of people who give up lucrative private sector jobs for public sector work. My H worked at a large law firm before a friend coaxed him to work for him at the state. He promised him a big cut in pay and the chance to do something truly constructive. Both have proved true.</p>
<p>Hayden, nice.</p>
<p>BCEagle, thanks for the retirement calculator. That’s very helpful.</p>
<p>I would like people’s opinions: If I select lifetime pension payout, with my H getting a pension if he survives me, we collect 90% of what our pension would be, i.e., having him on for his lifetime means we get 10% less once I start getting the pension.</p>
<p>If he does the same thing (have me collect his pension if I survive him), we get 75% of what he would get for his lifetime only.</p>
<p>Is there any generally accepted way of estimating whether to add the spouse on? My husband is inclined to add each other and collect the lower total. I’m inclined to each collect the full sum and not add the spouse. </p>
<p>Since neither of us can promise the other to die on a pre-determined schedule, how do we decide which approach to take? Any thoughts?</p>
<p>Dstark- I do think there are pension abuses and things that need to be fixed. I just want to point out that not all the pensions are the same and that many of the outrages you read about do not apply to the majority of government workers. </p>
<p>I am sorry if my posts come off as whining. Please do not take them that way. I love my job and appreciate what the job has enabled me to have in my life. I do think that it is important to have factual information though and that is why I post.</p>
<p>VaBird- we can retire at 55 but almost everyone works to 62 -66.</p>
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Do your survivorship rights pay 100%, or some smaller percentage? The MA pensions, for example, only pay 2/3 to the survivor.</p>
<p>Assuming you each get similar pensions, taking the survivorship rights lowers your combined pension for life (assuming 100% benefit to the survivor) to 82.5% of the max.</p>
<p>If you don’t, then the survivor will see a huge drop in income - 65%.</p>
<p>Without knowing anything about your personal histories, it’s likely you will outlive your husband by a long time. Are you ok with having much less income for 10 years or more?</p>
<p>I don’t know if there’s a formula,I think you just have to calculate the numbers for each scenario and decide what you are comfortable with.</p>