State pension or increased earning potential?

[redoak]

Hi all,

This is my first post, but I have been reading the catagories for many months. I have gained much insight into a variety of topics and would like to thank all involved with the forums.

My question: I currently have a good job in law enforcement with a state pension (retire w/20 years of service at 50% of the average of top 3 earning years as well as a possible health care subsidy) I am about 5 years in right now.

I have a great deal of admin. work in my position and seem to have an aptitude for project management and budgeting. I have been thinking about getting a master's degree in forensic accounting and giving the corporate world a try.

I am a firm believer in LBYM and hence am in a good position as it stands right now, even with a modest salary. However, as I have seen in other jobs I have held, low salaries, even with an employer match for 401's or 403's or even pension plans simply do not allow one to save enough to create significant wealth.

My thought is that with increased earning power and pathalogical LBYM I could most likely RE even earlier than the 20 years of service mark. Thoughts?

 

[lets-retire]

This has been talked about a lot on this forum. You should receive a lot of good information.

I am also currently in the same type of retirement program. Mine is 25 and out or 20 at 52 years old with 3% per year of service. In my case the pension is free. If our bargaining unit were able to continue the increases as we've had for the last 9 years, then my retirement would be very comfortable, without me saving anything. I would also receive an insurance subsidy. There is a lot to be said for the security of a pension.

With that said, when I was looking a completeing my degree I was contemplating a minor in either accounting or business managment along with the CJ major. I was talking with several secuirty type (corporate not the security guard) people in banking. The general theme I recieved, was if I could find the opening my income would easily triple going in. The positions don't come open often and there are typically very few people with expeirence/education in both disciplines. Since I was LBYM I viewed the increase as all savings and I could retire much earlier than staying in this job.

I found my aptitude for business required a classroom learning environment so the minor idea was thrown out in order to complete the degree.

My thoughts, if you have the aptitude for an in demand area and are willing to take the risk of the corporate world for the higher pay jump ship.

 

[Bimmerbill]

One of the things you have to check on is if the pension comes with health benefits.

 

[Leonidas]

When my agency put everything on computers in the early 80s, they put games on the machines to lure the Luddites in. One of the toys they had was a "how much will my pension be?" game. If you answered the question about your length of employment with anything more than three or four years from retirement the response was "what are you looking here for? You could be fired or indicted next week, get back to work!" Some sense of humor huh?

Seriously, the pension is a very nice thing - provided you make it there. Most do, but there was one point I was not clear on from your original post. Do you carry a badge and are just working in admin, or are you a civilian support person? The difference being that politicians are loathe to layoff cops because of the heat they get from the public. Civilians are less protected generally, and here we have a long history of civilian positions being an easy target for budget cuts. They lay off support staff and then pull cops off the street to have them sit at desks. Stupid, but you seldom see any numbers on where the badge carriers are assigned - just a proclamation that "we have xxxx police officers!"

I have had a lot of friends and coworkers leave over the years for the greener grass of higher salaries in the civilian world. Especially when the economy was really booming here locally. But, while some of them suceeded a lot of them came back (or wanted to). For some the boom ended and they were laid off along with a lot of other folks, or their fledgling business tanked as the money dried up. Others found that, like the guys in Ghost Busters, in the private sector "they expect results!". Those were the guys who were cut out for civil service jobs, or as some have said "I became a cop because that work stuff looks hard". As a cop, one tends to get used to a certain degree of job protection through civil service laws. They can still screw with you, but you in most places they have to make a really good case to fire you. In the private sector it takes a lot less for you to be cleaning out your desk. A few of those that left found they were barred from re-employment here because of medical conditions that they developed while working here (vision and hearing being the most frequent problem for some).

If you get to keep your health insurance after you retire, well that is a very, very good thing. One friend of mine left to be an accident reconstructionist. The insurance companies were just throwing money at him because he was good at what he did. In fact, he kept raising his prices just to try and keep the phone from ringing so much. Then, after doing that for five or six years, he had a heart attack. The insurance paid only so much and then it was all coming out of his pocket. His condition was relatively minor and he rehabed very well (better condition that his chubby butt had been in ever before) but he could not buy insurance at anything less than a rate that would bankrupt him. He came back to the PD and as he had been gone so long he had to go back through the 6 month academy. It was the only way he could get insurance.

My intent is not to scare you away from jumping ship and making the big bucks, but just to point out to you some things to consider. There are a lot of success stories out there. The ones who seem to do very well are the ones who are self-employed. Private investigators, lawyers, construction companies, and even one multi-millionaire who sells after market auto accessories in a big way.

 

[redoak]

Leonidas,

Thanks for your insights!

I actually work in the black sheep of law enforcement - corrections. and I am a certified officer.

I enjoy the challenge and the excitement of the work and do not have many dull days.

Your comments reference making it until retirement age are well taken. It is a long and difficult road. I have seen several colleagues retire and in most instances cannot ignore the physical and psychological toll that the job has taken on them. Lots of research links high stress dangerous work directly to shortened life expectancy.

Right now there is a health care subsidy for retirees. Being a state funded plan it is subject to the whims of the legislature. Based current trends I don't have a good feeling about a health insurance subsidy being there when I have enough time in. I imagine that health care will be a problem no matter what type of retirement you have for my generation.