I read about the 100K COLA adjusted public pensions and admit some envy, but I actually would be ok with public employees getting that and their subsidized health care in retirement if those of us in the private sector could contribute more to our 401K plans. $16,500/yr is not nearly enough to create a retirement close to that of a 100K pension.
Say you finish paying off your student loans, saving for a down payment for a home, and get enough experience by age 30 to finally be earning enough to afford 16,500/yr contribution. Maybe you get a match, so call it 20,000. If you do this every year then by age 55 you have 500,000 in contributions. If you got lucky during that 25 years, maybe you have 1,500,000 in your 401K plan (could be much less if you are unlucky which time period you worked). What size COLA annuity can you buy to start paying at 55 with your 1,500,000? I bet it is nowhere near 100K. Probably something along the lines of 50K, and with no COLA.
30 to 35 years work and this is what you get?
401K limit needs to be immediately adjusted up to 30K a year. Then I will quit having my pension envy.
Say you finish paying off your student loans, saving for a down payment for a home, and get enough experience by age 30 to finally be earning enough to afford 16,500/yr contribution. Maybe you get a match, so call it 20,000. If you do this every year then by age 55 you have 500,000 in contributions. If you got lucky during that 25 years, maybe you have 1,500,000 in your 401K plan (could be much less if you are unlucky which time period you worked). What size COLA annuity can you buy to start paying at 55 with your 1,500,000? I bet it is nowhere near 100K. Probably something along the lines of 50K, and with no COLA.
30 to 35 years work and this is what you get?
401K limit needs to be immediately adjusted up to 30K a year. Then I will quit having my pension envy.