Poll: Do you have a pension?

[Nature Lover]

Yes. 2 modest pensions. Both have some COLA. Combined, at retirement, they totaled ~45% of final year's regular compensation. I'll also have SS in the future.

 

[old medic]

State pension.... Well not yet... get my 1st check in Jan.... SS and a 401K equal to about 6 years retirement salary

 

[skyking1]

I can opt for a cola on my larger pension, but they just pull money out of the front end to pay you in the back end. That's really bad math in my opinion, in case I don't survive to the back end LOL.
We are just planning on it having a dwindling effect on our overall costs as time goes on. It's one of the reasons we're delaying taking SS until 70 for me and probably 66 for DW. We will use some of our investments to bridge that gap.

 

[skyking1]

Dp

 

[phil1ben]

I have a state pension but it represents less than 1% of my annual earnings post-retirement. So I answered the question "yes" but hardly.

 

[Amethyst]

For those who envy the CSRS pension, keep in mind that it is taxed at ordinary income rates, unlike investment withdrawals and capital gains. Also, one doesn't get SS except in certain situations; unlike FERS, the pension contribution was 7% of salary in lieu of FICA.

 

[skyking1]

I think you put the dividing line in the wrong place. Early retirees with "mini-pensions" have most of the same concerns as those without. All the lessons about AA, SWR, SORR and all the other lovely investing acronyms we toss around here are equally relevant to these folks. The little bit of stable income certainly helps, but establishing, growing and spending from their nest eggs is a key component of their retirements too. Only those fully supported by pension income seem to be in a different category where these lessons don't really apply.

I look at it this way, open social security website puts a value of our two SS accounts at around a million dollars.
Using that same logic my pension is worth maybe a million and a half. We still have significant investments of our own to manage.
The pensions and SS may pay the bills, but our investments will provide for LTC, and fun!

 

[skyking1]

For those who envy the CSRS pension, keep in mind that it is taxed at ordinary income rates, unlike investment withdrawals and capital gains.

Yes and that detail has provided a tightrope for me to walk. I can stay in longer increase my pension increase my taxable income. The downside is DW's retirement is all in 401ks and 403bs. Should she survive me she's going to be facing a tremendous tax torpedo. I'm really going to stick to my guns so that we have a good 7 years between retirement and taking SS, expressly for the purpose of doing Roth conversions. My hope is to surf right at the edge of the 12% bracket.

 

[Dtail]

No pension. I've sometimes felt that there should be parallel forums for folks w/pensions and those without. When you have no pension, you only get one chance to get it right. The other important thing is that most Americans with government pensions and some with corporate & union pensions, is that they usually get subsidized and guaranteed health insurance along with their pension. Those of us with no pension in the USA often had to deal with the ACA and the high premiums in the years before Medicare begins, as well as occasional nail-biting when there have been attempts to end the ACA. I'm thankful that the ACA began its existence when I wanted to ER.

I'm always amazed when I talk with government employees, at how many are completely clueless about the fact that pensions have largely ceased to exist in the private sector. And don't get me started and say "well why didn't you get a government job?". I had been working for a megacorp for over 10 years when I went into work one morning and found a memo stating that the pension plan and retiree healthcare were ending immediately, except for those employees who were already vested (25+ years IIRC). I got some piddling "cash value" for my 10+ years which I rolled over to my IRA. Folks who were within a year or two of being vested were really screwed.

I know of one retired GS-15 federal employee whose CSRS COLA'd pension began in the low 6 figures, and this person was genuinely worried about being able to live on that!

As for those federal employees with less insanely generous FERS pensions, that COLA'd pension is probably still far better than 98% of other Americans' retirement incomes, but they also will get Social Security, so they should be sitting pretty.

The lack of a pension is one of the reasons I'm waiting until age 70 to start collecting Social Security. I want to maximize the monthly amount.

Gov't type pension is all relative.
No chance that any gov't job related to my skills could have paid me what I earned in the private sector.

 

[pb4uski]

For those who envy the CSRS pension, keep in mind that it is taxed at ordinary income rates, unlike investment withdrawals and capital gains.

I'm struggling to see the relevance of this post as private pensions are ordinary income too... as are withdrawals from tax-deferred savings which is what replaced many corporate pensions over the years.

OTOH, IF someone's retirement savings are taxable account money AND are invested in equities, then that money is eligible for preferential rates.... but IME there are relatively few ERs in that situation... the one's I can think of are entreprenuers who grew and then sold a business so have significant taxable account savings.

 

[MissMolly]

Although I have a state retirement pension, I was surprised to receive a letter a couple of years ago (when I turned 65) telling me I was now eligible to receive my pension from a company I worked more than 30 years ago. The company had been bought out by another which also was closed so I had no idea I had a pension out there. My choice was $84/month for my life or $12,000 after they withheld taxes. Since I would never notice the $84/month I chose the lump sum and split it between my kids. They were happy. I was happy. Found money is fun.

 

[MBAustin]

I didn't answer because I took a buyout of my pension before I started drawing it.

 

[Golden sunsets]

For those who envy the CSRS pension, keep in mind that it is taxed at ordinary income rates, unlike investment withdrawals and capital gains. Also, one doesn't get SS except in certain situations; unlike FERS, the pension contribution was 7% of salary in lieu of FICA.

There is actually a third type of government pension, called CSRS Offset. Example: DH spent 21 years under CSRS. He left federal service, but did not cash in his pension. He spent 10 years in the private sector. He then rejoined his old agency for an additional 8 years and became CSRS Offset, paying in to SS but continuing the same pension. So he ended up with a federal pension based on 29 years(actually 30 after adding all of his sick leave to his # of years) and another 20 years under SS.

His SS is not as large as it would have been if he had been in the private sector for his entire career, but it is not insignificant.

 

[unclemick]

small non COLA pension (55) and small CRP at the farm ends 2021. Early SS.

Portfolio is the heavy lifter ala 60% plus depending on expenses a given year.

Heh heh heh -

 

[Freedom56]

Corporate pension with level income that is reduced by the SS amount at age 62.

 

[latexman]

DW and I will each have a MC pension and SS. By the time everything is flowing, age 70, we’ll have about 100% of our current income.

 

[socca]

... I was surprised to receive a letter a couple of years ago (when I turned 65) telling me I was now eligible to receive my pension from a company I worked more than 30 years ago. ...

Same thing happened to me. I had written off the idea of receiving any kind of pension from the old megacorp, but they contacted me out of the blue and said I had a modest non-COLA pension coming. I can start it at any time, but it's worth 8% per year for me to delay until age 70. Currently, my pension would pay for an excellent 2-week annual vacation in some exotic locale. After a bout of hyperinflation, it may not pay for a bus ride. The primary contribution that my pension will make to my life after I start receiving payments is to remind me each month that I'm OLD ENOUGH to receive a pension.

 

[Walt34]

I have one of those disappearing fully COLA'd pensions with heavily subsidized health insurance. At last report a couple of months ago the pension plan was 99.5% funded so we sleep well on that score. It is from a county government, not state, and the county stopped offering that plan about 1983. It has been changed several times since. I was grandfathered into it because I started in 1973 and elected to stay in it.

In 1983 the pension plan participants were offered a deal. If they enrolled in the new pension plan they would get back 50% of all their previous pension plan contributions AND future pension contributions would be cut in half too. Of course, the new pension plan was not fully COLA'd (I think the cap is 3%) the payout is not nearly the same, and the medical coverage is not as good either. A lot of guys took the bait and bought new toys - cars, boats, etc. and later regretted it when they retired. One of the big red flags on this deal to me was that the decision to go into the new pension plan could be done at any time, even up to the last day before retirement, but once you signed on the dotted line the decision was irreversible. So I declined, and continued paying the high pension premiums. Now my former employer is eagerly awaiting my demise to get me off the books. I have every intention of setting a new record for longevity. We'll see how that works out.

There was (and remains) a downside to this deal. Remember the high inflation of the 1970's and '80's? When folks in private industry were getting 15% raises and more, we were doing well to get 2%. One year the pay increase was 1%. Annual bonuses? Never saw anything like that either. I figure it all more or less works out.

 

[LRDave]

I only voted once and I voted for government pension. DW get teacher retirement from the state of GA. About $2300, of which amongst the withdrawals is a direct monthly healthcare premium for a retirees plan - about $275 for a bronzish plan from BCBS. It is COLAed.

I get a monthly annuity payment from megacorp labeled as a "pension" - $395 - beer money........

 

[TheWizard]

No pension, per se, but I did pensionize (annuitize) my employer's contribution to my 403(b) with TIAA to the tune of around $8000 per month...

 

[tmm99]

Small $400 per month corporate pension I have been collecting since 2001 from a 7 year employment at a German company in the US. DW gets $210 per month since 2002 for a 30 year employment at a major US bank.

Mine is like yours - $365/mo - corp pension (no COLA). It is so tiny but it is still much better than a kick in the butt .

I haven't spend any of it yet, and it's not in my retirement budget/calculations.

 

[street]

Yep, I took it in a lump.

 

[Gumby]

No pension. I've sometimes felt that there should be parallel forums for folks w/pensions and those without. ....

I think we can all live harmoniously in a single forum, but it is a good reminder that it is basic human nature to look at things through the lens of our own personal experience. When I post, I try to keep in mind that my situation may not be like yours, but I'm sure I'm not always successful. The best we can do is try to be aware of the fact and how it might affect any advice we may be giving.

 

[WestUniversity]

Corporate pension. Did analysis on annuity vs lump sum. Took it in a lump sum…

 

[RetireBy90]

DW and I are both retired Army and DW draws a small school system pension.