True Life Retirement Tales

D

daystar

Recycles dryer sheets
Joined
Aug 27, 2004
Messages
134
Location
Metro DC Area
I do some retirement counseling as a regular part of my job.

Tale #1: I'm talking to a 55 year old lady that has 28 years of government service. She's in the old retirement system (CSRS) so you think she would be getting a lot of money. Wrong! She's a GS-3 and she'll be getting $800 a month with her health insurance paid. Her husband doesn't work (didn't ask why) and she supports the both of them. She'll be receiving minimal or no social security because CSRS employees don't contribute to SS. I wanted to start crying when I heard that sad story.

Tale #2: A 62-year old employee wants to retire when he's 65. I calculated his CSRS annuity, SS, and TSP annuity for him. He'll be making $50,000 a year in retirement. His wife already retired from civil service and she's getting $30,000 a year. So, with a combined total of $80,000, this guy was worried about paying the bills. Apparently his wife wanted him to build her a "dream home." So, he built her a 4800 square foot home!!! I mentioned that the home was a castle or a mansion and it seemed really big, especially since they don't have any kids at home. The guy says, "you don't understand....when you have a wife, you'll understand." I should have asked how much the mortgage was, but I didn't want him to catch on to the fact that I thought he was an idiot.
 
lot of money. Wrong! She's a GS-3 and she'll be getting $800 a month with her health insurance paid. Her husband doesn't work (didn't ask why) and she supports the both of them. She'll be receiving minimal or no social security because CSRS employees don't contribute to SS. I wanted to start crying when I heard that sad story.

I guess the simple answer for her is to keep on working for a while. 55 is young to retire inless you have saved a big nest egg somehow. I don't really feel that bad for someone that wants to retire at age 55 and finds they don't have enough money.

Why is it that only government workers feel they should be able to retire at 50-52-55 years old and depend on the taxpayers to fund their retirement?

I see the stories all the time in my local paper "joe blow of the city highway department is retiring after 25 years of service with the department..." etc. 25 years seems like a long time, but the average non-government employee, assuming they start working at 22 after college is looking at 43-45 years of work before they can collect SS. Very few get to retire early.
 
Why is it that only government workers feel they should be able to retire at 50-52-55 years old and depend on the taxpayers to fund their retirement?
Click to expand...
What a load of bull! Govt. employees retire early the same way others do - they pay into a pension, they save like hell, and they pay into SS, just like everyone else. I'd guess many choose to retire early because people like you resent their making a living and demonize them at every opportunity. Get your facts straight. :mad:
 
Yeah, farmerEd, you needed to be thumped on that post.
As anti-government as I am, I don't fault anyone for
choosing to work in that sector, nor to take advantage of whatever benefits are available to them. It's called
watching out for yourself. Now, you might say that you don't
want your tax money to pay for particular government
programs, but that doesn't support your position as the government is funding all kinds of stuff that you don't like. Look,
chances are good that once the government gets its hands on your money, it will be wasted, or even worse, used for something you oppose strongly. That's the way
it works, but we shouldn't gig our fellow ERs and ER
wannabees for taking what they can get.

John Galt
 
Oh good, a hot-button issue!

I've always perceived government pensions, at all levels of government, to be much more generous than private sector plans. I figured this was offset somewhat by salaries that were lower than those in the private sector, so I don't gripe about it that much.

But I think there's a relatively new trend: government is attempting to be salary-competitive with the private sector, especially in high-demand jobs. And the government pensions keep getting better all the time -- take the example of San Diego, in which they cranked up benefits during the dot-com bubble years. I can guarantee you that this was not an isolated case.

Somebody tell me -- where are the checks and balances that keep government employee compensation in check? There's certainly no darwinian pressure, as there is in the private sector. And it doesn't seem to matter who we vote in as overseerer....
 
Hmmmm - dumb question - aren't some govt. pensions funded by putting money in a trust fund with trustee's investing in stocks/bonds/cash and yet others dependant on the taxpayer X years hence ala SS? Who is which?
 
Oh good, a hot-button issue!

I've always perceived government pensions, at all levels of government, to be much more generous than private sector plans.    I figured this was offset somewhat by salaries that were lower than those in the private sector, so I don't gripe about it that much.

But I think there's a relatively new trend:  government is attempting to be salary-competitive with the private sector, especially in high-demand jobs.   And the government pensions keep getting better all the time -- take the example of San Diego, in which they cranked up benefits during the dot-com bubble years.   I can guarantee you that this was not an isolated case.

Somebody tell me -- where are the checks and balances that keep government employee compensation in check?   There's certainly no darwinian pressure, as there is in the private sector.   And it doesn't seem to matter who we vote in as overseerer....
Click to expand...

Exactly...show me another private sector job where rank-and-file employees can go to work at 22, retire 25 years later and get a pension and guranteed health insurance for the rest of their lives....

Government pension plans are WAY more generous than the average pension plan available to non-taxpayers...and the tax payers are paying for it.

Do I fault the individual emplyee for taking advantage of what is offered? no...but I sure as hell can complain about them using my tax money to pay for overly generous compensation for the govt employees.
 
 
This is not passing judgement about (some) government employees and their pensions, but... :-/
my brother-in-law spent thirty years working for the Feds as a Secret Service agent and then as an in-field agent/investigator for the U.S. Customs Service, fighting the drug war, which, last time I checked, we were still losing.

He was able to retire at 54 with a pension that's creeped up to almost $80,000 per year (he's been retired eight years and is 62). The most he ever made when he was working full time was $80,000. Of course, most of us working stiffs would have to squirrel away millions of dollars to generate that much money per year for thirty or forty years or however many we have left.

Now he and some of his retired customs cronies have brought a class action suit against the government for "back pay", saying that while they were driving to and from their jobs they were actually "on duty" and are entitled to additional compensation. My brother-in-law says it could be worth as much as $225,000 to him. When we're together we avoid the topic because it's such a hot potato.

Correct me if I'm wrong, but I bet that for every person like my brother-in-law there are fifty federal, state, county, city workers whose pensions are far less generous.
 
Traveler, you have come to the right place to get educated. Many (not all) government employees
don't contribute much and are merely sucking at the
federal "teat". Your brother-in-law is merely trying to
line his pockets at taxpayer expense. This is standard
procedure. Many (not all) government employees
are merely taking up space and would have no idea
where to start if they had to fend for themselves.
My apologies to anyone who is offended, but
the truth hurts.

John Galt
 
My sister is a government employee who will be eligible to retire at age 55.She does not worry about saving because she says she will be fine with her pension. I don't resent that at all. But, here's the part that annoys me. I have no pension, so of course, my husband and I have put as much as possible into our 403B accounts. That will take the place of a pension. But, if one of us requires long term care, the 403B savings of the other can be all but depleted to pay for it. Not so when someone has a pension. I don't understand how this is OK.
 
Now Smoochie, come on. You are "annoyed"? Why?
I have no pension and I am not whining. It's "OK"
because your sister made her choice and you made yours. Everyone is not equal, in any way. The
government would like to make it so, but it can never
happen in its purest form. You need to get a grip.

John Galt
 
I am amused at the perception some have the federal employees collect extravagant pensions. The facts are that employees under the old CSRS system (for employees hired before January 1, 1984) receive 2% of their salary for every year of federal service; i.e., if you have 20 years of federal service when you retire, you will receive 40% of your "average high 3" (i.e., take your three highest years and average them). So, if during your last 3 years of service you made on average $50,000/year, you could expect a pension of $20,000 per year. Those belonging to CSRS receive NO Social Security benefits and typically have had 7% of their salary deducted to help fund their pension benefits.

Employees hired after January 1, 1984 belong to FERS. FERS employees do make social security contributions; thus they are entitled to collect social security benefits. However, their pension is calculated at only 1% per year of federal service. Using the example, above, a FERS employee would collect $10,000 per year after 20 years of service, or $15,000 per year after 30 years of service. Given the fact that government salaries are lower than the private sector, I don't view these pensions as excessive.
 
Geez, you guys are angry about government pensions. I think of the pension as a way of being rewarded for being paid less than market value for your entire career.

The woman I was talking to last week kept saying "that's all I'm gonna get." It broke my heart to explain to her that she's only going to be receiving that $800 a month and no SS. Even worse, I'm pretty sure she will be laid off if she doesn't take the retirement. So, she's 55, has nothing in savings, has few job skills (she's a GS-3) and she's got to support her family on $800 a month. She also still has two kids under 18, although one kid is 16, so he could get a job.

I thought more of you would have something to say about the guy that built the 4800 square foot mansion. But perhaps you guys feel he is entitled to his mansion, but the other employee is not entitled to her $800 a month.
 
A couple comments on each end of the bell curve.

It amazes me that an employee with 28 years of service is still a GS-3. What career planning did she do for almost three decades?!? Were there no opportunities for education or advancement? This reminds me of th's comments on the man who skipped college for a "great job" soldering IC boards while spending every paycheck... and now, after the tech-wreck layoffs, he's driving a courier's truck and can't understand what happened to his American Dream.

As for the other guy, watch HGTV's "Dream House". That show makes 4800 sq ft look like a sharecropper's shack. While a lot of people have spouses, too few of us have partners...
 
Hello Nords. I may have posted this before, but the 4800 SF house struck a nerve. A big new house was about
the most important material asset to my former spouse,
which is a big reason she is my former spouse. Now,
7 years after the split, we are both remarried. I live in an 1100 SF cottage in the country. She lives in one of
the biggest most expensive houses in a nearby town.
I assume they have a big mortgage too. Anyway, her
house is a metaphor for the need for each of us to go our own way.

John Galt
 
But, here's the part that annoys me. I have no pension, so of course, my husband and I have put as much as possible into our 403B accounts. That will take the place of a pension. But, if one of us requires long term care, the 403B savings of the other can be all but depleted to pay for it. Not so when someone has a pension. I don't understand how this is OK.  
Click to expand...
I'm with you Smoochie, it annoys me too. One of the downsides of saving is that you then have something to be raided. You can do several things though. One is to get divorced. I don't think your boyfriend is liable for your debts. Another in some cases is to create irrevocable trusts. Another might be an annuity. These all need to be done with an attorney who knows his way around.

The trusts are brutal tax-wise. If you price annuities, you will see that your sister's COLA annuity is way better than what you can buy for any normal amount of money.

Mikey
 
I do some retirement counseling as a regular part of my job.

Tale #2: A 62-year old employee wants to retire when he's 65. I calculated his CSRS annuity, SS, and TSP annuity for him. He'll be making $50,000 a year in retirement. His wife already retired from civil service and she's getting $30,000 a year. So, with a combined total of $80,000, this guy was worried about paying the bills. Apparently his wife wanted him to build her a "dream home." So, he built her a 4800 square foot home!!! I mentioned that the home was a castle or a mansion and it seemed really big, especially since they don't have any kids at home. The guy says, "you don't understand....when you have a wife, you'll understand." I should have asked how much the mortgage was, but I didn't want him to catch on to the fact that I thought he was an idiot.
Click to expand...

Sounds like my worst nightmare unless she's getting a housekeeper, gardner, and maintenance man in the deal. I can't imagine wanting to maintain a home that size in retirement. I know a few DIY-ers who like to do remodeling work as a hobby, but then they don't build brand new homes and they also tend to make money by buying rentals. As for me - more than one bathroom to clean and I'm over the edge. Maybe I'm lazier than most.

I think a lot of women get caught up in the shelter fantasy that if you have a great house the rest of your life will also be great, sort of a "build it and they will come" philosophy. Example: my mother-in-law (a single woman with no kids at home) bought a ridiculously huge home with the idea that we would come visit her more often if we had our own guestrooms with private baths. It didn't work, mostly because she failed to take into account the fact that we had very real limits on our time and money, and frequent cross country flights just weren't in the picture.

She also thought that having a gourmet kitchen and huge dining room would lead to the sort of fun and fabulous dinner parties that you read about in Martha Stewart's magazine. The problem is that when you're working 60 ours a week to pay for that kind of house you don't have time to make a lot of friends and the idea of having people over for dinner is an exhausting proposition.

Eventually she came to her senses and sold the thing, but a lot of women don't.
 
In my single days I dated a woman who bought a 4 bedroom bilevel for herself and one dog. She had lots of money, but I thought it was nuts.

John Galt
 
I think a lot of women get caught up in the shelter fantasy that if you have a great house the rest of your life will also be great, sort of a "build it and they will come" philosophy.
Click to expand...

Another thoughtful post from you Flowgirl. I think a similar sort of confusion tends to happen with men and big boats. Possibly more men truly have fun in a canoe than a 40' Bayliner, but more men lust after Bayliners.


In my single days I dated a woman who bought a 4 bedroom bilevel for herself and one dog.  She had lots of money, but I thought it was nuts.
John Galt
Click to expand...
Now John if this lady had a plasma TV in that big house, she sounds like a great date. But maybe not a good life partner for an ER.

Come to think of it, I like to visit anybody with good TV and a warm house.
Mikey
 
I think a similar sort of confusion tends to happen with men and big boats. Possibly more men truly have fun in a canoe than a 40' Bayliner, but more men lust after Bayliners.
Click to expand...

Whenever I see a topic about boats, I am always reminded of the saying. There are only two happy days when you own a boat - The day you buy it and the day you sell it

I got rid of my 12 foot fishing boat and bought a float tube that I can throw in my trunk and launch in any Bass or trout pond that I come across! :)
 
In my single days I dated a woman who bought a 4 bedroom bilevel for herself and one dog.  She had lots of money, but I thought it was nuts.

John Galt
Click to expand...

Funny, I was this :eek: close to being this woman. Not JG's date, ;), I mean a single woman with a small lap dog in a big house.
 
As for me - more than one bathroom to clean and I'm over the edge.  Maybe I'm lazier than most.
Click to expand...

You and I both. I don't like housework and cleaning 3500+ sqft house will drive me crazy. Everytime I see a McMansion I keep thinking of how much cleaning I'll have to do and I feel sick.

Jane
 
I just downsized to a 1670 sq foot house in March. Sold the larger house 2 story with a pool. As soon as my kids move out (probably thsi summer ) I might think about downsizing again, after cleaning the hardwood floors yeaterday I'm thinking this one is too big....
 
I agree on the boats. Unless one is filthy rich, it's hard to justify a large boat. I have had many good trips with canoes, especially in North Arkansas. Beautiful country along the Buffalo River, then go down the White for some trout fishing.
 
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