Looking at a pension 20 years from now

[ERD50]

^ seen the graph, know the stats


regardless, some companies remain committed to DB plans

I searched, and the numbers are higher among the megacorps (Fortune 500), I guess the next Q is what % of the population works for MegaCorps (looks like you could work backwards from Midpack's graph)?

Nearly a quarter of Fortune 500 companies still offer pensions to new hires - The Washington Post

-ERD50

 

[Big_Hitter]

correct, the decline is stabilizing

 

[Midpack]

^ seen the graph, know the stats


regardless, some companies remain committed to DB plans

About 7%, "very" didn't suggest you know the stats, for the benefit of the OP.

 

[Big_Hitter]

^ good grief

 

[Midpack]

^ indeed

 

[Clone]

I felt that I should never count on a pensions. After all, who says it is going to be around in 30 or 40 years.


Likewise, I didn't think that I would see a nickel out of social security. Just another one of those taxes.


Grew some brains and figured I should try put away some money in the 401k. Tough to do when paying bills and raising a family.


Fast Forward about 20-25 years-


Had an opportunity to start a second career path. Retired with decent pension, great social security earnings, medical plan in retirement.


I probably should have listened to all of those folks that said it was stupid to think that pension and health benefits would be there. Maybe I should have jumped ship to the hot new startup that had more cash but crappy benefits?


Oh well, here I sit with income sources that lock me into paying a lot of taxes for as many years as I am around. I guess we all have our own problems to deal with.


(As much as it grates upon folks here to pay taxes, I guess I don't see a lot of downside.)

 

[pb4uski]

...(As much as it grates upon folks here to pay taxes, I guess I don't see a lot of downside.)

Having to pay taxes is a true double edged sword in that I feel blessed to be in the fortunate position where I have enough income to pay but then when I think about the [-]clowns[/-] morons in DC and how my money is being spent it makes me quite mad.

 

[stepford]

Looking at that chart I see that my Megacorp would still be considered to offer a "hybrid" pension even though they will freeze their DB pensions at the end of this calendar year - right when I intend to ER, what a coincidence. In any case, while I think while most employees here welcome the little defined contribution plan our overlords have offered as some small compensation for the loss of our pensions, few would consider this plan a "pension" - hybrid or otherwise. It's just a little additional 401-K like vehicle offered to keep us from bolting en masse.

Early polling of my coworkers suggests this desired effect might not be realized...

On a different point I have an issue similar to the initial one raised by the OP: when to start taking the pension. While contributions to the plan do freeze at the end of this year payouts grow about 5.5% per year each year I defer for the first few years. Looking at SPIA calculators the equivalent value of the pension doesn't increase, but there are some tax benefits to deferral. It largely comes down to how I'd like to have my assets divided among taxable/401K/Roth/Pension. Still mulling my options here.

 

[HFWR]

...when I think about the clowns in DC and how my money is being spent it makes me quite mad.

That's insulting to clowns...

 

[pb4uski]

That I can live with, but clowns are too nice to be picked on.

 

[meierlde]

More and more there is a movement to cash balance pensions, over final average salary pensions, partly because few folks make whole careers at one company. (for whatever reason). In addition the final average formula tends to make finacial planning for the company harder.

 

[Pilot2013]

I have to agree with what appears to be the majority opinion here, most companies are abandoning DB plans. My last employer (4 or so years ago), which is a $60 billion+ privately held Megacorp, started the abandoning process in about 2002 or so, and as I understand it now has completely dropped it. I know few people now that work for companies (outside of guvment) that have DB pensions. Unfortunately, just seems to be dying thing of yesterday.

I tell my 23 and 25 YO DD's that they need to be sure to fend for themselves, the companies won't do it.