Pensions - Got one?

[Co2012]

I have a state pension that pays 80% of my last three years salary(actually five years service as I had not had a raise in 5 years) with a 3% cola. I had to work three long---long years extra and buy 2 years service from another system to reach 35 years service so that I could make that 80%. Actually I see more money than when I was working. Reduced taxes, no retirement deductions, no union dues, gas, clothes, lunches, etc.

We took the 100% survival rate. When I retired, it puzzled me that so many said they were not taking the 100% survival rate. It costs me about $300 a month but already in two years of retirement, I almost have that back and next year, I will have it all back. Actually, I had no choice in the matter as my husband would not agree to anything else. I was more than fine with that because he was self employed and his SS is not that much. He worked so hard and deserves to have a worry free retirement.,

Also have two other retirement accounts.

 

[check6]

Another lucky one here. Non COLA 60% of FAE but reduced to 50% due to pension freeze for all employees. Last in my industry to receive a DBP.

 

[cranberryjoe]

My megacorp froze its pension about 10 years ago. When I FIREed at 55 last year I had the option of taking the monthly annuity non-COLA with no benefit to waiting, or a lump sum that would increase if I waited. Given recent financial difficulties with the company, I chose to take the lump sum immediately into an IRA. I don't need the pension money right away so it can grow without fear of a PBGC takeover/reduction in benefits.

 

[Derslickmeister]

No pension for me. Just a 401k with 6% match. My first employer got out of the pension business back in the early nineties, my current employer never offered one. My wife has a pension though, and a pretty good one at that

 

[Derslickmeister]

Unfortunately no, they phased out the voluntary retirement plan in 1992. I bought in in 1981 because my father said it was the smart thing to do. My 1992 line manager was my hero because he forced all the dumb young engineers to opt in before they closed it in '92.

I still think it's a great company for engineers, although you pretty much are resigned to locate to Texas now. Starts with an R and ends with an N. Though when I started it was H and S respectively.

Wow, I worked for that company in Texas in the late 90s after they bought my previous employer. They shut us down and moved my facility to AZ, sound familiar?

 

[Dash man]

My pension is about 15% of my final salary and there is no COLA. I only worked for them for 16 years, so I'm happy to have it.

 

[PERSonalTime]

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

 

[Dash man]

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

In my case my wife is still working for another year, so we're on her plan. Once she leaves we'll go on Cobra for 18 months, then we'll have a choice of going on my former employer's retiree health plan, which today would cost us $1,500/month or finding our own plan. We looked on eInsurance.com and the options ranged from $900-$1,600 per month with high deductibles and out of pocket expenses for all of them. We have 7 1/2 years until Medicare kicks in.

 

[obgyn65]

In my case, I will get COBRA until I reach 50, at which stage I will have retiree benefits including a high deductible healthcare plan, which cost will be very reasonable.

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

 

[Walt34]

The pension came with BCBS health insurance which includes prescriptions. I usually pay $5 for those. While working I paid 20% of premiums and at retirement I could pick none, continue paying 20% for one year after retirement for every year of service after which coverage would end, or pay 30% of premiums to continue coverage for life for me and DW. That one was a no-brainer. I pay 30% of the premiums. This becomes secondary to Medicare at age 65 for both of us.

A possible "gotcha" on this is that while they maintain that the policy is to continue doing that they reserve the option to discontinue it. If that happens there will be yet another court battle since it appears to be covered under the union contract. In the past the employer has not done well in court battles. The last time the judge told them he didn't want to see them again and if he did it wouldn't be pretty. Still, it would add a stress level no one needs.

 

[Mulligan]

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

I had the option of staying on group plan until Medicare when I retired 4 years ago, but the individual market was dirt cheap at the time, so I declined it and went the individual, high deductible, HSA method. Accounting for the HSA tax deduction, I have actually made money each year on buying my own health insurance. After this year's exemption ends, that will not be the case anymore thanks to the ACA. So it's pay more, have a higher deductible, and stay healthy until 65, then get my revenge with assorted body part replacements!

 

[Rpharmer]

I have a very small pension, from Retail Food and Commercial Workers Union, where my first job was as a minmimum-wage-plus-5-cents cashier at a drugstore in the eighties! Only good thing I can say about that experience is that the low pay and benefits eventually propelled me to get off my a$$, go back to school and become a pharmacist.

I do get a kick out of that little $100 check every month. Hey, it'll add up to $42,000 if I (and the Pension Fund!) live another 30 years. Ironically, that $42K is roughly what I earned there, at $3/hr for seven years! (There were some nickel and dime raises, but I suspect inflation ate 'em.)

 

[Rustic23]

Military pensions include health care. Tricare prime $550 for the family. Includes drug plan. Tricare for life, Medicare sup., free.

 

[Co2012]

We decided to go this direction, with DH's COLA'd pension. Now I have regrets and I'd suggest anyone considering this really look at all sides.
I was so submerged in work, I just didn't do the research and think through this as I should have. (After all, I had my own (non-COLA) pension and 401k and stock options, and retirement was years ahead for me.)

We agreed DH would get a 15-year life insurance policy, enough to pay off the mortgage and bills, should something happen to him early on.

What didn't kick in for me at the time was my pension isn't COLA'd. And my retiree med subsidy before Medicare is being reduced or may go away(though ACA might help if necessary). As mentioned before, it's not necessarily true that expenses get cut that much if you lose your spouse, and taxes may actually go up. Oh, yeah, and the stock options have been a bust.

That aside, I should be ok with the IRA back-up and we've paid off the house, but should something happen to DH, my SOL will be significantly adjusted. Just a caution to anyone considering signing away the survivor benefits.

I, too, would suggest to anyone to think about it carefully before you pass over the 100% survivor option if you have a spouse. Sure you may be able to buy life insurance but if your spouse is older, it is doubtful if you could buy enough equal to what you'd gain--especially if cola'd.

Say, you get $3000 a month with 3% cola. If your spouse lives 20 more years, that would be over $700,000 and that is without the cola. (my math may be off). If you can find a life insurance at a reasonable rate that will guarantee that then fine. Beside if the spouse dies, your payout goes back to what it would have been if you had not taken the option. You don't get the money back but you start fresh. If it cost you $300 a month for this option. You get that back.

In discussing with a coworker who was retiring around the same time as myself what option she was taking. She said she was taking the $100 a month dollar survivor option. I asked her why and she said she wanted to get as much as she can get. Yet she told me that her husband made very little from his SS--something like $1200 with a pension of $70 dollars. She had a high paying job and and if she were to die her husband could get as much as $5000 a month. Heaven forbid if she were to die before he does, he's only be entitled to $100 a month of her pay and be stuck with a small Soc Sec. I asked if he was agreeable to that and she she yes--he'd better.

 

[akck]

In addition to the pension question, how's everyone dealing with their healthcare costs? Did healthcare come with any pension package, HSA, or do you just pay those costs out of pocket? What's your particular situation?

My pension came with paid medical. It becomes supplemental to Medicare, when I'll then have a medical expense for part B. I'm purchasing dental-vision-audio and long term care insurance. I figure it's a push between premiums and dental-vision expenses each year. Once I have some history of what they actually cover, I'll decide whether to continue it. I've gone back and forth on long term care insurance. The deciding factor was to keep the non-LTC user from becoming destitute while trying to cover LTC costs. Once there is only one of us, we'll evaluate whether it's worthwhile to keep it.

 

[Mulligan]

I, too, would suggest to anyone to think about it carefully before you pass over the 100% survivor option if you have a spouse. Sure you may be able to buy life insurance but if your spouse is older, it is doubtful if you could buy enough equal to what you'd gain--especially if cola'd.

Say, you get $3000 a month with 3% cola. If your spouse lives 20 more years, that would be over $700,000 and that is without the cola. (my math may be off). If you can find a life insurance at a reasonable rate that will guarantee that then fine. Beside if the spouse dies, your payout goes back to what it would have been if you had not taken the option. You don't get the money back but you start fresh. If it cost you $300 a month for this option. You get that back.

In discussing with a coworker who was retiring around the same time as myself what option she was taking. She said she was taking the $100 a month dollar survivor option. I asked her why and she said she wanted to get as much as she can get. Yet she told me that her husband made very little from his SS--something like $1200 with a pension of $70 dollars. She had a high paying job and and if she were to die her husband could get as much as $5000 a month. Heaven forbid if she were to die before he does, he's only be entitled to $100 a month of her pay and be stuck with a small Soc Sec. I asked if he was agreeable to that and she she yes--he'd better.

$100 a month option? I never heard of such a thing. I bet that might lower her pension check a dollar a month. The ultimate sacrifice!

 

[kz]

Dh and I both have state non-cola pensions.
Our other retirement income streams are SS (he's collecting, I have 3 more years til I can collect), part-time job for him, savings, and Roth IRA accounts for both of us. We haven't touched the IRAs but they are there if needed.

 

[Dcharles]

some of my older friends still working are jealous!

 

[vttlarry]

I have a state pension with limited cola. Wife has no pension but has IRA.

 

[PERSonalTime]

Dh and I both have state non-cola pensions.
Our other retirement income streams are SS (he's collecting, I have 3 more years til I can collect), part-time job for him, savings, and Roth IRA accounts for both of us. We haven't touched the IRAs but they are there if needed.

Kz,

You guys sound like you've got it made.

Congrats.