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Old 07-19-2015, 08:57 PM   #41
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Years ago I posted in a financial blog that I could see pension reductions coming..man did I get a tongue lashing... It isn't I told you so... It's about my country on a never ending spending binge... We in the RIP household are financially responsible...



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Old 07-19-2015, 10:29 PM   #42
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Originally Posted by rayinpenn View Post
Years ago I posted in a financial blog that I could see pension reductions coming..man did I get a tongue lashing... It isn't I told you so... It's about my country on a never ending spending binge... We in the RIP household are financially responsible...



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Its a sensitive subject. And more complicated than just a government spending binge.
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Under funded pension plan tidal wave ...
Old 07-20-2015, 05:29 AM   #43
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Under funded pension plan tidal wave ...

With all due respect- it is the height of simplicity
- Spend more than you take in and eventually your Greece. The only complexity are the poor retirees of Chicago, Detroit will and have fought for what is due them. There's a problem though...

Oh the municipality can say we agree to pay 95% of your pension but what happens when the populace up and moves... No income (tax base), no assets of note equals no pension. Simply put: Can you name one ghost town that is paying pensions?

I believe our government should operate with the same fiscal discipline that successful individuals exercise. In my household it means we don't spend what we don't have. Oh and we don't retire with '20 years in'.

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Old 07-20-2015, 08:12 AM   #44
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My personal opinion? I think it's a bad idea that my IL pension is untaxed by the State. I've enjoyed (much of my life) the great things about IL and what it offers and I believe I should pay my fair share.

But that's what it is now. I'll do my (maybe) first-and-only Roth conversion in 2015 since IL tax will not be applied, but I will pay another state's tax thereafter.
I agree. Why should anybody get free income. At least this way the wealthy elite has to participate.
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Old 07-20-2015, 08:48 AM   #45
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With all due respect- it is the height of simplicity
- Spend more than you take in and eventually your Greece. The only complexity are the poor retirees of Chicago, Detroit will and have fought for what is due them. There's a problem though...

Oh the municipality can say we agree to pay 95% of your pension but what happens when the populace up and moves... No income (tax base), no assets of note equals no pension. Simply put: Can you name one ghost town that is paying pensions?

I believe our government should operate with the same fiscal discipline that successful individuals exercise. In my household it means we don't spend what we don't have. Oh and we don't retire with '20 years in'.

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First of all, I don't know any public employees who retired after 20 years. The fiscal discipline you speak of would have been governments being responsible for their portion of money they were supposed to put into pensions yearly. Instead they took pension holidays and used the money for services, roads, bridges, what have you. That is why Illinois had an artificially low flat tax of 3% for years.
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Old 07-20-2015, 08:59 AM   #46
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First of all, I don't know any public employees who retired after 20 years. The fiscal discipline you speak of would have been governments being responsible for their portion of money they were supposed to put into pensions yearly. Instead they took pension holidays and used the money for services, roads, bridges, what have you. That is why Illinois had an artificially low flat tax of 3% for years.
In NJ I know there are some. Can't say for sure how many, though.
M-I-L put in 240 months and gets two thousand each month from the public fund.
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Old 07-20-2015, 09:11 AM   #47
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I'm one (23+ years, one place). I never made anywhere near a six-figure salary (couldn't see it down the road even with the headlights on bright). But I was in an academic position and valued that environment.
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Old 07-20-2015, 09:51 AM   #48
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Not sure if I saw this article mentioned here or somewhere else but it does show that a city can run out of money and the pensioners just get screwed. While small towns in Alabama are far different than a world class city such as Chicago, when the money is gone the money is gone.

http://www.nytimes.com/2010/12/23/bu...hard.html?_r=0
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Old 07-20-2015, 10:07 AM   #49
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Prichard, Alabama, is not a city that is "too big to fail".

The following excerpts summarize the story.
This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry...

... the retired fire marshal who died in June... was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,”...
The pensions were nowhere as generous as we read about in California and bigger cities.
... Its biggest pension came to about $39,000 a year, for a retired fire chief with many years of service. The average retiree got around $12,000 a year. But the plan allowed workers to retire young, in their 50s....

Workers paid 5.5 percent of their salaries into the pension fund, and the city paid 10.5 percent. But the fund paid out more money than it took in, and by September 2009 there was no longer enough left in the fund to send out the $150,000 worth of monthly checks owed to the retirees. The city stopped paying its pensions.
The problem is also due to demographics.
The city’s rapid decline began in the 1970s. The growth of other suburbs, white flight and then middle-class flight all took their tolls, and the city’s population shrank by 40 percent to about 27,000 today, from its peak of 45,000. As people left, the city’s tax base dwindled.
Demographics problem will hit all developed countries in the next few decades, though it will not be as bad as above.
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Old 07-20-2015, 10:59 AM   #50
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Another way to say it is:

"Chicago has a cloud tax on streaming services like Netflix."
Now if they would institute a "clown tax", budget problems solved! Heck, they might even run a surplus...
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Old 07-20-2015, 12:12 PM   #51
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I believe our government should operate with the same fiscal discipline that successful individuals exercise. In my household it means we don't spend what we don't have. Oh and we don't retire with '20 years in'.
Isn't the real issue for us private sector folks Fed gov't pensions and SS? With state, county and municipal pensions, eventually those that contributed to and earned the pensions are the ones that will get screwed. When the local gov't runs out of money in the fund, refuses to contribute more (common in Illinois where pension funding holidays are the norm) and simply stops paying.


With the fed employees, they'll always be paid because the fed gov't can simply "print" money through deficit spending. Private sector folks will pay the bill through taxes or inflation, whichever it takes.
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Old 07-20-2015, 12:12 PM   #52
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First of all, I don't know any public employees who retired after 20 years. The fiscal discipline you speak of would have been governments being responsible for their portion of money they were supposed to put into pensions yearly. Instead they took pension holidays and used the money for services, roads, bridges, what have you. That is why Illinois had an artificially low flat tax of 3% for years.
Fire and police do it all the time....

I met a few when a coworker's spouse was in LE.... some were pretty young....
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Old 07-20-2015, 12:23 PM   #53
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Fire and police do it all the time....

I met a few when a coworker's spouse was in LE.... some were pretty young....
How about the military? And SS? It only takes 40 quarters to get SS for a worker. And a divorced spouse can collect SS if she/he was married ten years but never worked a minute or contributed a penny. What a ripoff!


And the MegaCorp I worked for offered vested pensions with ten years of service. That sucked! To say nothing of start-ups who offer stock packages to early-on employees who then become zillionaires after only a few years?


I tell ya, all this not having to work until FRA is killin' us!
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Old 07-20-2015, 02:52 PM   #54
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With all due respect- it is the height of simplicity
- Spend more than you take in and eventually your Greece. The only complexity are the poor retirees of Chicago, Detroit will and have fought for what is due them. There's a problem though...

Oh the municipality can say we agree to pay 95% of your pension but what happens when the populace up and moves... No income (tax base), no assets of note equals no pension. Simply put: Can you name one ghost town that is paying pensions?

I believe our government should operate with the same fiscal discipline that successful individuals exercise. In my household it means we don't spend what we don't have. Oh and we don't retire with '20 years in'.

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You are an individual and you can control your household. I do the same.

Its the "take in" part that gets complicated for large states like Illinois.
Many things have happened in our economy and society in the last 35 years that have helped us get to this bad fiscal place.
Its easy to point fingers now.

I just think comparing your own personal household budget to a State budget with millions of people involved is not realistic.
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Old 07-20-2015, 05:58 PM   #55
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You are an individual and you can control your household. I do the same.

Its the "take in" part that gets complicated for large states like Illinois.
Many things have happened in our economy and society in the last 35 years that have helped us get to this bad fiscal place.
Its easy to point fingers now.

I just think comparing your own personal household budget to a State budget with millions of people involved is not realistic.
Of course it's different in lots of ways, but ultimately it comes down to will, personal or political.

Here in Ohio (not far from Illinois with much same the economic issues) the last governor was accumulating the largest deficits ever and had drawn down the "rainy day fund" to nothing. A new governor was elected who had quite different priorities. He eliminated the deficit and rebuilt the rainy day fund to around $2B.

It can be done, it just takes the will to do it.
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Old 07-20-2015, 06:56 PM   #56
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First of all, I don't know any public employees who retired after 20 years.
It is common in the military. I started my IT career working for Lockheed in 1987. We had a LOT of folks there who enlisted out of high school, put in their 20, then retired and went to work for Lockheed while receiving a military pension as early as 38.

Some of them were actually "triple dipping" -- spent 20 in the service, then 10-20 as a Lockheed employee, then retired from Lockheed and stayed there as a contractor while taking in two pensions. (And they had a high hourly rate since they had no benefits, but they had plenty of retiree benefits.)

I don't blame anyone for doing anything legal that benefits them. And it's not clear to me that the taxpayer is worse off overall than if they stayed retired and let someone else have that job. If anything, it probably put them in a higher tax bracket and they paid more taxes.
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Old 07-21-2015, 10:31 AM   #57
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Of course it's different in lots of ways, but ultimately it comes down to will, personal or political.

Here in Ohio (not far from Illinois with much same the economic issues) the last governor was accumulating the largest deficits ever and had drawn down the "rainy day fund" to nothing. A new governor was elected who had quite different priorities. He eliminated the deficit and rebuilt the rainy day fund to around $2B.

It can be done, it just takes the will to do it.
Unfortunately the political will here in Illinois is non exist. They really only want to appease lobbyists and special interest groups that can line the pockets of their wealthy elite friends. I hope I didn't offend any of the moderators. I am referring to Illinois politicians only and not intending to offend any of the members of this distinguished panel.
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Old 07-21-2015, 10:33 AM   #58
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Unfortunately the political will here in Illinois is non exist. They really only want to appease lobbyists and special interest groups that can line the pockets of their wealthy elite friends.
Which they can spend after their sentences are up...
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Old 07-22-2015, 12:18 AM   #59
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Which they can spend after their sentences are up...
Blagojavich was the worst of the pension fund plunderers. He just yesterday received a favorable court ruling regarding the beginning of the process to reduce his sentence.
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Old 07-24-2015, 08:38 AM   #60
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Under funded pension plan tidal wave ...

Since much of the discussion in this thread has centered on IL-specific issues and retirement income. I want to add one more thing I thought of this week.

IL has a flat tax, currently 3%. That IS spelled out in one of the Articles of the Constitution (the language used is "non-graduated rate").

One can think what they like of that but political stomping of feet is best taken outside, not on this forum, I imagine.

But my naive thought is that this would apply if taxation of retirement income were considered. Again, everyone is entitled to their personal opinion, of course.
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