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Old 03-11-2014, 07:11 AM   #21
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The frustrating thing about DB pensions is that they are so back-loaded in many cases. A pension with 10 years of service often isn't as large as half of what you'd get for 20 years, or a third of what you'd get after 30. That's why staying for the pension is such a crapshoot, given that (a) the pension be frozen at any time and (b) the job and/your bosses can start sucking so much that staying for the pension feels like a prison sentence. Even with the same salary history, three pensions for 10 years of service won't likely come close to one pension earned for 30 years of service. That kind of sucks and it's one of the most frustrating things about DB pensions today where there are few "jobs for life".

Yeah, pensions can be a wonderful (and are after you've earned them), but I do know many people who are stressed and miserable because they hate their jobs but feel absolutely trapped by the pension pot of gold at the end of the "miserable job" rainbow. So there is that to consider as well. (You said you've been there for 5 years. How long does it take until you are vested? In my first Megacorp it took 10 years, and they froze the pension after I'd been there nearly 11 years, so I barely made it.)

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The contract I was under provided for "Inverse seniority layoff" ( you could request to be laid off , in place of the lowest , and get the rif package, 6 mo free medical, and un-employment insurance , also 26 weeks at the time). I jumped. Best thing I ever did.
My dad was in an aerospace job and he jumped at an early retirement incentive back in 1992. His was similar to yours, but better in two ways: first, it gave fully employer-paid health insurance for him and my mom until they reached age 65; second, they added five years to his service time for pension purposes. I suppose most miserable folks grinding toward a pension can only dream about such a deal these days. The funny thing is that he almost retired as soon as he hit 55 and could get the pension and retiree health insurance, but his bosses regularly emptied out his BS bucket (or prevented it from being filled) because they didn't want him to retire. And he was actually pretty happy there for his last three years as a result, but this retirement incentive proved too good to pass on.
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Old 03-11-2014, 08:58 AM   #22
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How true. I am vested in one pension with a credit of 11 years. The company "right-sized" and I was gone. I was just a few years from reaching the magic "Rule of 80" which would have given me a full pension after that. I was one of many just over 50 yo "right-sized" out of the organization. The senior people left just happened to all be people who had already reached the magic age/years of service total. I was far enough from the magic number that I knew I couldn't go after the company for age/pension bias but I was high enough up in the organization to know that the topic of pension costs/vesting was frequently discussed.

This kind of thing is why I hope we will go to a transportable retirement system (note that I tactfully avoided using the word 'pension') that is controlled by the individual and not by government and/or employers.

Ideally both employee and employer would make contributions and hopefully the withdrawals would be tax free/advantaged. Combine that with meaningful medicare reforms and a more enlightened attitude towards retaining older workers and the 'retirement' problem would be greatly reduced.
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Old 03-11-2014, 09:03 AM   #23
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Your greatest wealth build tool is your earned income over your entire career. Maximize it via promotions and job transfers. All the rest of the benefits are important but supplemental.

I would add the ability to live below your means.
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Old 03-11-2014, 09:15 AM   #24
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Back in late 1999, I was encouraged to leave Boeing, and join up with a smaller company that was a partner on our contract. With Boeing, I had the pension, but the 401k only had a 1% company match. We were actually the "bastard children" of McDonnell-Douglas, so they treated us differently from other Boeing employees, so if we were Boeing-proper, the plan might have been different. The new company offered no pension, but the company match was better, at 3%, and a better variety of funds. Plus, I would get a 10% raise if I went to the new company. And the final bonus, was that Boeing would technically lay me off on the last workday of 1999, and give me one week of severance for every year I was with the company (came out to 7 years), but then the new company would pick me up on the first workday of 2000.

Needless to say, I followed that encouragement! If I had stayed on with Boeing, provided I was still working with them, I'd have 21 years of service. I wonder what that pension would have been up to by now? For those 7 years, I'll get $349.21 per month, non-COLA'ed, starting at age 65, in 2035.
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Old 03-12-2014, 08:47 PM   #25
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I'll be vested in the pension this year. Agree that the pension is only one factor among many. The benefit is really back-end loaded and makes ER difficult - if you leave at 45 or even 50, the value of the pension is significantly reduced.
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