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Old 04-23-2015, 03:47 PM   #41
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For sure, Walt34! You are a dinosaur! Even my dad who started working in 1946 with an AFL-CIO union didn't have a COLA pension in 1997. Thank God he had a DB pension in his later years, despite the non-COLA. It was a godsend to us kids when he entered long term care. (Aside: the fact that the standard will be no pensions <COLA or otherwise> is going to really BITE HARD on kids in the next few decades when they look at parent care. MARK MY WORDS.)
I strongly suspect that the pension plans like I have will prove to be a historical aberration unlikely to be repeated, born of the post-WWII economic expansion and the elation that the Depression and the war were over, and an overall labor shortage for the expansion. Bearing in mind that I started that job in 1973, the pension plan came into existence in the 1960's.

They thought the economic party would never end, and of course eventually it did. I doubt that mistake will be repeated.

So basically I think I'm just lucky to have been born into the time and place that I was. Yes, I did work lots of strange hours, missed a lot of family holidays, very high stress at times, and all that. Lots of other people did and do that too.

I look at DW's nephew and his wife, and some of my family nephews and nieces, they are going to have a hard time trying to retire. None that I know of are saving anywhere near what they should be, if anything. DW's nephew, who we are closest to, is only saving up to the 6% company match and of course that's not near enough. I suspect he may end up living in his daughter's basement (she is doing very, very, well in school although at the age of nine a lot can happen). He and his wife are boresighted on getting the kids into better schools and is sacrificing all, including his and his wife's future, to get there. Admittedly that one is a tough call.

It is an entirely different financial world than the one I came into.
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Old 04-23-2015, 04:15 PM   #42
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LOL a couple of things to point out.


1) there have always been cries of financial doom. Remember the concept of retirement as we know it is pretty much a new concept. pre wwII folks simply worked until they could no longer. early retirement? what was that. My sister and I are pretty much the first folks in our family who would even consider such a thing.
2) the good old days of pensions where pretty much a very short period of time. maybe 20-30 years. so this idea we have that back in the glory days everyone had pensions and then kicked up their feet and started living la vida loca isn't really accurate.
3) most retirees will cut back on their expenses and standard of living but that's always been the case.


this is an old article but it's pretty interesting.
The Biggest Retirement Myth Ever Told


Now that's not to say, our youngins don't have to be smart, but I think the basic financial lessons we teach:
1) live below your means
2) save for a raining day
3) start early and save consistently
will make the biggest difference.
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Old 04-23-2015, 04:20 PM   #43
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I work for megacorp usa. a big chemical company based in Delaware. I've seen changes also, some good some bad.
We have the third best 401K plan in the country. company matches dollar for dollar up to 6%, give an automatic extra 3% for anyone who contributes at the 6% level and every year the company makes a profit, they throw in another 2%.


I'm an oldie there, anyone who started before 2008 has a pension but the pension was never the greatest. I think at full payout it was only 1/3 of your salary, so no matter what you always had some responsibility to save.
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Old 04-23-2015, 04:36 PM   #44
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My hubby & I both have cola pensions which I am very happy for. The article about the retirement myth was interesting.
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Old 04-23-2015, 05:18 PM   #45
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I tell my kids to get government jobs .......
One of our sons works in IT for a county social service. He is 30 and has 8+ years of service already. The pension system is the same one that DH is retired from, with a fixed 3% COLAed pension. Since DH retired in 2010 they have already changed the pension system, adding 2 years for full retirement and changing the COLA to indexed up to 3%.

When DH retired there were generous health benefits for the retiree and the spouse after 10 years of service which also changed. You now need 20 years and after 2019 there will be no coverage offerings for spouses.

So far our son plans on staying with his job until retirement (27 yrs for early - 32 years for full) but who knows.

DHs pension is modest but our expenses are low so it's plenty for us and we can even save 12% every month. In June he will get his 5th COLA. It really adds up to a significant amount by now.

Yes, we feel like dinosaurs, but very happy to be dinosaurs at this point
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Old 04-23-2015, 05:35 PM   #46
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These days, empowerment comes not from being part of an organization, but rather from one's specialized knowledge and skill set, initiative, and ideas. Those who do not possess these characteristics are the ones left on the outside looking in.

So things have changed, and whether it's for the better or for the worse overall is arguable, and the answer is different for each individual.
The problem is in the numbers. Most of us posting here had parents that benefited from the Large Middle Class of the 1940s-1980s.... You had a large head start into economic prosperity. This provided education, housing, health care and nurturing that individuals may not get today.

Everyone here that is posting has been helped by the economic conditions of the last 50 years. Those in the future do not have 'This leg up' and to imply that their fortune lies upon their own resources may be true, but it is certainly not equal to the Large head start that we all had. The ones that do not 'Succeed', will be part of society also. And society will bear the burden of their 'failure'.
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Old 04-23-2015, 09:50 PM   #47
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And society will bear the burden of their 'failure'.
And this is the scary part with over 9 billion persons on the planet by 2050.
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Old 04-24-2015, 06:20 AM   #48
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But look at the flipside:


We are moving to a "gig" labor market. To some extent more and more of the labor force are effectively contract workers for their employers. That means that you cannot expect to find a cushy job, tune out, and wait 30 years for the pension. But it also means there is no reason to stick around in a boring, abusive, or poorly paid position because you are stuck in the "pension trap." Keep that resume polished and shop yourself around regularly. It usually comes with a raise when you leap and you learn a lot more that way.

+1. Lots of data showing that the younger generations will hold 7-8 different "jobs" in their career versus those retiring today who typically held 1 or 2 ..
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Old 04-24-2015, 08:05 AM   #49
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I just retired last year and held 7 over 39 years. (Eight if you count an employer which was acquired although I stayed on for 6 years after the acquisition.) I can honestly say that only one was voluntary. Most of the rest were having the job go sour (a couple of consulting firms that fell on hard times, one relocation I couldn't make because my husband's job wasn't portable) and once I was downsized. So, it's been happening already.


As for advice to get civil service jobs for their stability and pensions: nothing is forever. Many municipalities are trying to figure out how to cut back on their generous pension plans because they can't afford them anymore. Retiree health care is also being cut, especially for recent hires. They're promising less. And some civil service jobs have problems of their own- boredom, inflexible bureaucracy, understaffing, etc. Sure, that can happen in the private sector but it would be harder to hang on if you had a nice civil service pension waiting for you if you just kept at it another 20 years. It's sort of a trap.
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Old 04-24-2015, 08:49 AM   #50
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I'm on my 3rd employer after about 30 years in the biz.


All of them had/have good retirement benefits, including my current employer. Retirement/health benefits played a key part in each hire/resignation decision I made, all voluntary.


I worked for one employer for 20 years (had a 4 year service break at another firm but went back) and have a non-colad pension of 30% of FAP payable at 65. I keep waiting for them to offer me a lump sum....
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Old 04-24-2015, 09:41 AM   #51
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My parents have it made in the shade with a Cola'd pension from the feds until death. And both retired before 60.

I think a lot of folks on this board made their income in years where computer programmers and systems engineers were in high demand. The demand is still there, but I see A LOT of outsourcing of these jobs now. My nephew owns his own engineering firm and about 10 years ago he was talking about how he chose engineering because it couldn't be outsourced. You had to have a PE and be licensed in your state. Recently he told me he was wrong about that. Whatever engineering plans he needs he can outsource to engineers abroad for a quarter of the cost and then just review and certify them himself after review. I work for a large megacorp. I note that our 3 network engineers in our building are H1b visa holders and our company saves a crapload on labor costs using them. Welcome to the global economy!

Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?
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Old 04-24-2015, 09:48 AM   #52
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I think a lot of folks on this board made their income in years where computer programmers and systems engineers were in high demand.
you mean like back in the day where there would be a "charge" for computer time and the IT guys were always preventing you from modifying your PC so you could do your job more efficiently?
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Old 04-24-2015, 09:49 AM   #53
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Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?
not sure - my dad told me not to go into the oil biz and I'm glad I didn't
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Old 04-24-2015, 09:52 AM   #54
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My, didn't that attorney have a gift with words! Dinosaur, indeed. If he weren't such a dinosaur himself, he would have used "unicorn" (something admirable and rare)!

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I was just discussing this with DW a few days ago, how lucky we are. The elder law attorney we dealt with on FIL's issues said I was a "financial dinosaur". Have a government DB COLA'd pension, SS benefits coming, decent savings. .
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Old 04-24-2015, 10:05 AM   #55
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Two paths to similar financial results: I had only one "real job" for my entire career. I had a pension waiting for me, thus the golden handcuffs. A sibling was somewhat of a job hopper, changing jobs every 5 years or so. No pension, but pay boosts when changing jobs that far exceeded my raises. End result is that I have a modest pension, but sibling has higher earnings, thus we have similar net worth at similar ages.

Regarding globalization: Yes, there is a lot of outsourcing, but there are also a lot of foreign companies that have a large presence in the US and hire a lot of US workers (I was one of them).
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Old 04-24-2015, 10:56 AM   #56
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Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?
It won't long term. But the ability to learn new things and be willing to go back to school as needed will. Also teaching them how to have a nice life with low overhead will help them to become FI, like Shillers advice to his students:

My students are living alright, Shiller said. Ive suggested to them, why dont you just continue to live at that level after you get a job? It would pile up into a lot of money.
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Old 04-24-2015, 10:58 AM   #57
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dunno, personally I've studied and worked way to hard to live like I did in college
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Old 04-24-2015, 11:31 AM   #58
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My company has a pension plan. It is still ok for me , but for new hires the plan is very weak. I have almost 26 years in. With all that I still have to save all I can to even have a prayer at retirement.
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Old 04-24-2015, 11:46 AM   #59
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^ ich auch - one of my main goals in life is to retire longer than I w*rked - gotta save a lot or lbym or both - I'd rather just save a lot and live at my means
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Old 04-24-2015, 11:57 AM   #60
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dunno, personally I've studied and worked way to hard to live like I did in college
I guess it depends how you lived in college. Our kids have it pretty good.
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