A look at Pensions

[Sunset]

......
I found the following quote from doing research into my potential future retirement state.

"As Tennessee does not have a standard income tax, all forms of retirement income are untaxed at the state level. This includes Social Security and income from retirement accounts. Additionally, property taxes in Tennessee are quite low, with an average effective rate of just 0.75%."

Tennessee does make up this difference with a high 9.46% sales tax between local, and state (which is the highest in the nation) I guess I will have to buy groceries in Kentucky. (or grow my own).

It's not the highest at all, A quick look shows State of LA and many others to have higher sales tax.
Sales Tax Rates

IL also has the highest or second highest property tax, and a 5% flat State tax on work income.

 

[ERD50]

....Maybe leaving it alone is a good idea?

Sure, the best way, the only way to deal with a complex problem is to ignore it. Maybe it will go away? [/satire]

-ERD50

 

[ERD50]

Originally Posted by ckelly78z
......

Tennessee does make up this difference with a high 9.46% sales tax between local, and state (which is the highest in the nation) ...

It's not the highest at all, A quick look shows State of LA and many others to have higher sales tax.
Sales Tax Rates

IL also has the highest or second highest property tax, and a 5% flat State tax on work income.

Yep, at that site I counted ~ 14 communities in IL with rates higher than 9.46%, and up to 10.75%. (edit - that was just among the 'popular' searches, there are far more, and they go up to 11.00%)

-ERD50

 

[hopefullyoneday]

I have been involved in online pension debates for at least 15 years, and during that time have noticed one common theme in pension themes - misinformation. People from 'either side' can get graphs and states and 'facts' that support their position. The vast majority of people have no idea of how changing a statewide pension system effects government accounting, invested income, or future outlays by the government for active employees - but everybody has an opinion. The issue is far too complex for a threat on the internet, even on a site such as this with so many financially wise people. The normal online thread devolves into a shouting match of us vs them, and nothing comes of it as 99.9% of people who think they know something/anything about the issue have next to zero clue. Maybe leaving it alone is a good idea?

That is the best answer ever. I agree. Nobody here can fix it and we all just argue about how it got to be a problem.
In the end we ALL pay for everyone's retirement one way or another.

 

[CRLLS]

The public employee unions contributing and working to get the politician elected that gives them a raise or pension benefits. Sounds like a conflict of interest.

Conflict sure. If you were a part of that public employee union or the politician, I'm sure you would like it. I know I would. But even if you didn't, the unions acts for you. That's is the way it works. Like it or not.

I worked in the private sector where I never got one of those big pensions. Truth is, I got a small one that I quickly rolled over when I could and didn't look back.

 

[Sanbenito1]

Need to reduce pension costs,, but if pensions are eliminated, public sector salaries would then need to be raised to compete with the private sector, at least in Civil Engineering, IT, accounting and other specialties. I worked for the private sector, then went to government for awhile to diversity my resume- public salary was about 25% less than I had been making so back to consulting I went.

 

[Mulligan]

The bottom line for pensions to work, they must be properly funded, invested to properly to meet a realistic rate of return, and have correct assumptions (correct female/male ratios for life expectancy, correct assumption for age retiring, years worked before retiring, etc. etc). And the bottom line if not done correctly that is where the liability problems begin. The bottom line is they are not cheap to fund properly (of course this also depends on how robust the pension payment is also).
My pension is a robust one and is properly funded also. But this is because 14.5% is deducted from ones salary and also matched 14.5% by the employer. That is a lot of contribution money...But still over time the assumptions are about 2/3 of every pension dollar from my system is being generated by the investment returns generated over that time and 1/3 by the actual contributions.

 

[Live Large]

Public service a tax burden?

We all face choices, public or private employment. Sure, some promises made today are broken tomorrow, but at what costs? CA, we will sustain.

Fortunate to have had an opportunity to complete undergrad college studies to completion as military service was the next option. Took a para-military position with a local law enforcement agency.
Early pension much like the military after 20 years of service was the promised benefit. A job facing personal risk of danger from from other human beings as a inherent possibility. Did 30 years retired age 51 last April, fortunate thanks, but was at the funeral of Corpl Ron Singh, he didn’t make it, he gave all he had. So, argue all you like if the sentiment is a cop pension is a tax burden. I’ll enjoy my ER and hope I can live back some of those 365 days 24/7
protecting and serving others safety.

 

[hopefullyoneday]

We all face choices, public or private employment. Sure, some promises made today are broken tomorrow, but at what costs? CA, we will sustain.

Fortunate to have had an opportunity to complete undergrad college studies to completion as military service was the next option. Took a para-military position with a local law enforcement agency.
Early pension much like the military after 20 years of service was the promised benefit. A job facing personal risk of danger from from other human beings as a inherent possibility. Did 30 years retired age 51 last April, fortunate thanks, but was at the funeral of Corpl Ron Singh, he didn’t make it, he gave all he had. So, argue all you like if the sentiment is a cop pension is a tax burden. I’ll enjoy my ER and hope I can live back some of those 365 days 24/7
protecting and serving others safety.

Thank you for your service, you deserve your retirement.

 

[Vacation4us]

+1

I was at the funeral of Ronil Singh too. Proud to sit next to my hard working spouse.
Another law enforcement tragedy. There seems to be far too many of them in NCal.

Zero guilt once I can get hubby to walk away. He should have retired with 30 years this past November. Hopefully 2020 will stick, He was called outta bed again last night due to an officer injury.

Pensions should be funded appropriately but the only abolitionist aren't receiving one
And didn't do the work needed to receive one.

 

[couch]

Canada's response to under funding

For the Canada Pension Plan(CPP, which I think covers all of the provinces except for Quebec) they identified in the mid-80's that their ponzi scheme wasn't sustainable. So what did they do?

1. Increase immigration of young people. This would prop-up the scheme as long as we keep it up for 100 years or so.

2. Increase payments from 3.6% to 9.9%

3. Decrease some benefits in ways that not too many people would complain about.

4. Take their fingers out of the pot. They created an independent organization to handle the investments.

Apparently we are good for another 75 years at this point and as long as immigration continues we should be fine.

Things can be done, but these things need to be looked at in 100 year time ranges.

 

[Teacher Terry]

Police and firefighters deserve their pensions younger because they often have a shorter life expectancy because of the physical toll the job takes.

 

[Live Large]

An honor to Protect & Serve

+1

I was at the funeral of Ronil Singh too. Proud to sit next to my hard working spouse.
Another law enforcement tragedy. There seems to be far too many of them in NCal.

Zero guilt once I can get hubby to walk away. He should have retired with 30 years this past November. Hopefully 2020 will stick, He was called outta bed again last night due to an officer injury.

Pensions should be funded appropriately but the only abolitionist aren't receiving one
And didn't do the work needed to receive one.

God Bless your husband, may he soon find his path to his “deserved” pension as was posted. I never posted before this tread but it compelled me to comment. Thank him for his service.

 

[Chuckanut]

I knew of a guy who worked as a prison guard. It is a very high stress job and they are required to retire after 20 years.

 

[Vacation4us]

Police and firefighters deserve their pensions younger because they often have a shorter life expectancy because of the physical toll the job takes.

Statistically true, but I sure hope my hubby bucks that trend! He's the happiest person I have ever met and he doesn't hold his emotions in. Cried yesterday at a MADD event....ps don't tell him I posted that

God bless all those who serve others!

 

[stepford]

And inevitably, just like every other pension discussion, this one eventually boils down to some folks having sacrificed so much that the rest of us should feel horrible for even thinking about the fiscal consequences of their pensions.

Sometimes it's military, sometimes police, sometimes firefighters, sometimes teachers. Every one of them sacrifice and every one of them deserve the pension they were promised - as does every other worker who was similarly given a promise.

None of that means, however, that the costs and consequences of these pensions shouldn't be discussed or that, going forward, a different plan might not be more equitable.

 

[Vacation4us]

And inevitably, just like every other pension discussion, this one eventually boils down to some folks having sacrificed so much that the rest of us should feel horrible for even thinking about the fiscal consequences of their pensions.

Sometimes it's military, sometimes police, sometimes firefighters, sometimes teachers. Every one of them sacrifice and every one of them deserve the pension they were promised - as does every other worker who was similarly given a promise.

None of that means, however, that the costs and consequences of these pensions shouldn't be discussed or that, going forward, a different plan might not be more equitable.

Clearly you only see what fits your narrative.

I think we all advocate fiscal responsibility. The state of California has required and taken a pension contribution from spouses paycheck for 30 years.

Since he has already maxed out his pension he is currently working for .20 cents on the dollar. That should warm your heart a little. It's called dedication not juicing his pension.

PS due to WEP he can't even get my SS so when I die my SS dies with me. That'll save the government a dollar or 2, oh and we'll be paying the max for Medicare too! Cause the politicians took away his health benefits at 65 but left their own intact.

 

[imoldernu]

In case you missed it, here's link to the connection of failed businesses to the PBGC. Post 87.

http://www.early-retirement.org/forums/f27/goodbye-sears-95449.html#post2180781

 

[stepford]

Clearly you only see what fits your narrative.

I see you missed the part where I said he deserved everything he was promised - or perhaps that doesn't fit your narrative.

 

[Vacation4us]

I see you missed the part where I said he deserved everything he was promised - or perhaps that doesn't fit your narrative.

I read your comment as snark, I apologize for misinterpreting your meaning.

 

[Quantum Sufficit]

Maybe, but that is not the employees fault. I would not turn that down if offered to me.

Yah... Of course you wouldn't. Problem is that it is UNSUSTAINABLE

 

[Quantum Sufficit]

With all due respect, I hope you have another more convincing example. “Tens of thousands of dollars” is absolutely trivial compare to unfunded pension liabilities. IL is up to $133.5B now...

https://www.reuters.com/article/us-illinois-pensions-idUSKBN1O62KC

The article also supports my earlier assertion that it’s not lower returns that have been the primary issue, it’s curtailing annual contributions mostly. That should be a crime, evidently it’s not. Politicians, voters and public retiree all share “blame” for the predicament, and kickin’ the can down the road year after year.

I disagree. The crime is lavish pensions funded by taxpayers who have no choice but to bend over

 

[gooddog]

This thread is going as I predicted. To quote Trump: SAD!

 

[Chuckanut]

Opinions vary.

 

[braumeister]

Thanks for the interesting discussion.