Do Pensions Make a Difference in Retirement?

[@blockmasterscott]

Oh yes, pensions matter. I got hurt at work at the very end of my 20 years in a school district and had to retire, and luckily for me, I have that 20 year pension to support me. I had relatives look down on me because I was a custodian with no college education, but I'm not even 60 years old yet, retired with that pension, and enjoying life. The same people that put me down 20 years ago are stuck working. Go me! Sometimes in life you have to pat yourself on the back and tell yourself "well done".

[@2_572]

How do you apply to be a custodian?

[@blockmasterscott]

@@2_572 Unfortunately, I do not know. When I applied, everything was done on pen and paper. It’s all online and automated now. Sorry.

[@2_572]

@@blockmasterscott thanks for your input 👍

[@gratitudetouniverse3754]

@blockmasterscott Is your pension livable in today's inflation and cost of living ? Do you still get SSS when you turn 62 y/o. Thinking of applying at State hospital. Thanks.

[@RNAvirus]

A good friend of my started as a custodian at 18. He is going to retire at 50 and have the quite life he has always wanted. He did change jobs to streets and sanitation, but his pension followed him. I went the college route, while I do have a government job and have a nice pension coming, I am willing to bet overall he will have had a better work to life happiness balance and in the end we will get a retirement check of roughly the same amount.

[@kenjones7240]

I’m a law enforcement officer in NC. We receive a law enforcement supplement to our pension which makes our pension 100% of our top 4 year income. Also have $350k in my 401k which the state contributes. Also we have the state Heath care for life at the whole group rate which is $50 a month. With 6 years left, I currently make 83k a year. I’ve had people look “down” on me for my job and the fact that I do not have a college education. I think I made out ok…

[@nighthog1]

Hi Ken. I too retired as a LEO in North Carolina without a college degree. Two things I need to bring up since you did not mention it in your comments. At 3 months before you reach 65 years old, you will be required to sign up for Medicare. State insurance will become secondary insurance and you will begin making monthly Medicare payments to the Federal Government. At age 62 your supplement check from the retirement system goes away and you have to decide whether to start social security payments or continue to work somewhere to make up for it. Best of luck to you!

[@HowToRetire]

Ha! Y'all definitely earned every bit of that! Thanks for keeping our communities safe. 🙏 I grew up just south of Charlotte.

[@jasenwm]

Those same people aren't working holidays, nights, weekends, missing family events, seeing dead bodies, risk of getting sued or killed and dealing with the low rents of society. I hope you live to 100 so you can milk the hell out of the town you worked for and you earned every penny of that pension. Oh and those people could have put an application in but they didn't

[@jasenwm]

@@nighthog1 most of the time if you contribute to a pension you weren't paying into ss

[@dking1362]

You deserve every penny. Many years working with the worst of our society and daily risking your life....enjoy your retirement, and thank you for serving.

[@gerardmorris6191]

Pensions are huge! My military retirement and VA disability totals $7000/month and I am 6 years away from collecting social security. After collecting social security, my total retirement income will be a little over $10,500/month.

[@HowToRetire]

That's amazing, Gerard. I know you earned every penny of that! Thank you for your service! 🙏🇺🇸

[@erikmartin4996]

He takes 7 minutes to get to what everyone already knows. Having a pension is the best way to go. That’s why all the companies got rid of them.

[@ianstephens333]

So true

[@fallback8314]

😊and that's why heartless repubs HATE them

[@dangeles95]

Thank you

[@gelarojr]

But you can't pass a pension on to your children and grandchildren. You can pass a 401K or IRA on.

[@mountainbiker4450]

agreed. Of course, a pension makes a difference. It is a benefit of your company. You don't even have to contribute to it. Not sure this should even be in question.

[@GillerHeston]

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.

[@joshbarney114]

This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha.

[@rogerwheelers4322]

It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $475k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.

[@FabioOdelega876]

@@rogerwheelers4322 I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.

[@rogerwheelers4322]

@@FabioOdelega876 I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with “Colleen Janie Towe”, and she's is widely recognized for her proficiency and expertise in the financial market. With a comprehensive knowledge of portfolio diversification, she is acknowledged as an authority in this field.

[@FabioOdelega876]

@@rogerwheelers4322 Thank you, I just looked her up on the internet and found her webpage and also looked into her credentials. which seems really proficient. I wrote her a mail outlining my financial objectives and planned a call with her.

[@easterlake]

My USPS pension is only about $1800 a month but my health care follows me in retirement. My biggest asset is the 1.2 million that I've grown in my TSP.

[@HowToRetire]

Oh wow -- that healthcare benefits is huge. Thanks for the great comment! 🙏

[@sammondaw]

Awesome tsp!!!!!!

[@RenePerez-pu4cj]

I'm actually going to start a career with USPS myself. Previously build a bit of retirement with my local municipality employer. Would you happen to know if it can roll over at all?

[@jojowhite9296]

I retired two years ago from the USPS. My FERS pension is currently $2400/mo and S.S. is $2200/mo. You've doubled my TSP ($550K) but living in Ohio, I haven't nearly had to dip into my TSP. It helps that my wife is currently a public school middle school teacher but even w/o her income, I can live worry free. Can't beat FERS!!

[@TheLifeofRicky]

I have tsp and looking for more supplemental income

[@CliveBirse]

How do people manage in retirement since 401ks are nothing to write home about? Inflation has skyrocketed My 600k turned to 350k in no time. Im 61, won't one work till they die at this pace?

[@DanielMullins053]

I worked until 72, I was at the top of my income game, liked my work, and we could both go on Medicare. I ALMOST fell into the “only one more year” trap.

[@mikegarvey17]

@@ThomasChai05 How do you apportion savings, investment and expenditure?

[@mariaguerrero08]

@@ThomasChai05 I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?

[@JackBJacobs233]

I've taken the initiative to research her online and verify her credentials. I'm impressed with her expertise, and I've reached out to her to share my financial market goals in detail.

[@bukboefidun9096]

I retired at 65 1/2, spouse years earlier at 62. Had group ins until retirement 65. Spouse has a 401k partially converted to guaranteed anniuity...$25k, and RMD of $8k, I haven't touched my 401k but have $8k inherited IRA... Get $40k from SS... bank spouse's SS. Actually do not spend enough enough... so the windfall winners will be heirs. What am I doing wrong?

[@mattl1758]

Thx for sharing. I’m fortunate enough to have a pension in the private sector. I’m 22 yrs into a 32 yr pension program at 44 yrs old. Everyday I’m thankful for this. If there are any young people reading this, please try to pay attention to retirement benefits at work. It may not matter to you now, but one day you’ll wake up and realize you’re half way there. Good luck to everyone in retirement

[@HowToRetire]

Great point, Matt. As a young person, I remember struggling to get my head wrapped around all of the things I was supposed to do for retirement. It's certainly worth the effort!

[@jojowhite9296]

Many private pension plans go "belly up" and when the government takes over paying that pension it can be quite a difference. My mother-in-law worked for and receives a small pension from Diebold. They are constantly reminding her that the pension may have to be taken over by the federal government and to work on spending habits.

[@AMJDG]

I retired from the USAF at the age of 44 and have received a pension ever since. Yes, pensions make a difference. Mine has allowed me to own a home and maintain the standard of living I had all of the years I served. My father also retired from the USAF and though he died much earlier than he should have, his pension permitted my mother to keep their home and live fairly well for almost 20 years until she passed away. Not every job provides the opportunity for a 401k or other type of retirement account. I had served for almost 15 years when the military finally began offering a type of retirement account, so I missed out on it - but the future generation have it and are still able to retire at 20 years of service if they wish.

[@FaintlyTapping]

I retired in 1992 at 39 after over 20 in US Army. The benefit of that military retirement is like being a millionaire and drawing the monthly interest for life. I continued to work and then retired at 68 with Social Security. Military retirement has proven to be one of the best decisions I ever made. But remember, it’s not really a pension, it’s actually military retirement pay because we are technically still serving members of the Retired Reserve subject to recall depending on your age. One final thought, never let them tell us that those are entitlements, Social Security are earned benefits and military retirement pay is still being earned until they bury us in the ground.

[@DianaCampbell-fu5dp]

That’s great 🎉

[@RNAvirus]

I tried going AF after college, but was denied service because of an eye condition. Pension always seemed better than private sector jobs.

[@judynewsom1902]

I have been retired for five years now. Although I've been adhering to the 4% rule, things are challenging as I did not anticipated. I have another $460K to put into st0cks. How can I profit from the market's resurgence.

[@AddilynTuffin]

Now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.

[@Redwood4040]

This is really nice. I worry that I have a couple more years before retirement, and I want to switch to using a financial advisor, I could really use the expertise of this advsors.

[@Redwood4040]

I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.

[@kevo212]

what’s up with all these scambot conversations?

[@CapeSIX]

Buy one month treasury bonds at 5%. You will be making a guarantee $23000 from the government right now. Ride the free money wave while it’s good

[@mikechance3138]

I paid 7% monthly into my pension over 32 years with a county. It earned 8% annually and upon retirement (I was 53 years old) the county matched my contributions and interest at 225%. My current pension nearly matches my net salary (take home). I have additional investments, a Roth IRA and savings. My point is that not all pensions are the same.

[@garrett7101]

Mine is almost exactly like yours at my job with the county.

[@stephencullum8255]

My pension is about 75% of my take home pay. With SS I make more now than when I worked. I also saved money aggressively in a 457B plan. My job was with a Municipal own Utility ran by a commission.

[@HowToRetire]

@Mike Chance -- take that deal all day long!

[@mariex800]

Very nice, Mike. Retire at 53 that is so awesome.

[@mikechance3138]

@@mariex800 it does not suck

[@dawannwilliams6301]

Agreed 34 years ago everyone said l was making a mistake taking a federal government job vs going to college. I wanted to work so went to college in the evenings, worked my way up the ranks and on track to retire in 3-4 years at 56-57 with a pension, a supplemental payment and tsp account. Because no one is paying pension today everyone wants to work for the federal government and you can’t get through the door 🚪 without a minimum 4 years of college. I am grateful l made the decision.

[@HowToRetire]

Dawann -- can't argue with the benefits!

[@warrenpuckett4203]

Know of a few that also college grad and took a Zero and also did 20 in the military. How does $2500 to $4000 a month checking deposit sound at the age of 42? Even enlisted is not that bad. $1500 to $2500 on average. Yes a E-7 at 20 years gets about the same as a captain or navy lieutenant. You can still go with .gov +.mil combined but even if you get more than GS-12. It will not make up for what combining .mil & .gov gets you. Every 10 years of .gov gets 20% of what the equivalent .mil gets. The good part with .gov is you most likely will end up living where you started. You may not want a all expenses paid tour of the world. Unless you do go for State Department.

[@sammondaw]

Mostly same here. Did 4 years military, stayed reserves and a federal civilian. 35 years military, ( 4 active ,31 reserves), 33.5 years federal civilian . Retirement in 2 months age 56 ,4 months. Federal pension, supplement, TSP/401k. Reserve pension in under 4 years. Wife collecting 2 pensions plus social security. I look forward to being done.

[@ootenyafoo6935]

I've been retired for almost nine years now on a State pension combined with SS for me and my wife - I'm in my mid 60's. I believe that the key to a successful retirement is first and foremost be debt free at retirement time. Keep your expectations realistic - there is no "care free" retirement as long as you are still alive, life will always give you new "challenges" to deal with. It's great not having to deal with the BS of the office anymore as well as stupid things like annual performance reviews with "goals for the next year" crap forced on you. Keep a rainy day fund of at least three years worth of expenses just in case.- life has an ironic sense of humor. So far so good!

[@christopherhennessey8991]

County Hospital retired RN here ,and have a state pension.Consider myself very lucky indeed. Retired from the bedside at 55,8 yrs ago. Claimed Social Security benefits at 62 .Agree with you being as debt free as possible.Became debt free Sept 2021 ,thanks to the 1-2 punch of my pension and Social Security benefits. The state retirement system offers a pension vs investment plan,I suggested to former coworkers to stick with the pension plan.

[@mikeblack6953]

@@christopherhennessey8991 My mom was a nurse’s aid for 36yrs in a MA state hospital, retired in her early 60's due to medical reasons, her body just broke down. She found out she was 4 quarters short to be eligible for SS, so she only gets her pension. I don’t know how much she paid into SS over 36yrs, her contributions may have changed with different union contracts over time, but she worked 36yrs straight, with no periods of leave before retirement. I’m thinking about having a lawyer look into this before she passes on, as she’s in poor health, it just doesn’t seem right to me.

[@cnwil4594]

Jeez, you sound just like me, my friend👍

[@rc6149]

We can't double dip in Ohio😢

[@beatricerights]

@@mikeblack6953 You can get a transcript from SS to find out her earnings over the years.

[@billklein5225]

Both my wife and I planned our careers around pensions. I retired from the military and then retired from the state. My wife retired from the state. We both collect social security. On top of that, we both retired with @ $250,000 each in IRA's. We've been retired for more than 10 years and our IRA's have more than doubled even after taking out funds for European travel and cruises. We only take money from the IRA's for travel and to help our grandkids with education expenses. Our retirements completely cover all our living expenses and we still save @ 3000 per month. You could make a point that my income could have been much more in a private setting allowing me to invest a larger amount. But our retirements are @ $130,000 and we would have needed $3.4 mil to safely withdraw that. For us, pensions did make a difference.

[@HowToRetire]

Bill -- that's awesome! With this video, I was curious to see what kind of a difference a small pension (similar to the average private sector pension) would make. I'm hearing more and more from people who worked in the public sector. It sounds like the difference is massive. I may have to make a follow-up video on this. Thanks for sharing and congrats on a wonderful, secure retirement! 🙌

[@HB-yq8gy]

Wow, great job saving with two pensions hard to justify Roth conversions. We are MFJ wife will retire end of next year at 59. 5 y/o.My pension is $68000. We will roll over her TIAA 401k & 403b to Vanguard IRA based on my calculations we could convert $35000 yearly a stay in the 12% tax bracket. NJ state taxes are $2800 crazy for that conversation.

[@hermanrogers1325]

Well done

[@MLopez-fu8fd]

@@HowToRetire Yes, I would strongly suggest that you consider making another video with a State/Fed Pension at least around $4,500/month per individual. $1,000/month is nothing!! But that does NOT include any Medical benefits. NOT everyone that will be getting a Public Pension will also receive medical benefits as well.

[@FirstHillSeattle]

@@HB-yq8gy I'm a firm believer in pensions. But, as a recruiter I've seen a big shift over the last 25 years in what employees want. Most younger workers do not want a pension. And when you try to explain to them what it is, they continue to be uninterested. This got so bad, and we were losing out on so many younger workers over this issue, that my employer started giving a "retirement choice". Now new hires can either choose the pension plan (which is very generous) or the 401k-style plan. I'd say about 90% of all of our new hires choose the 401k-style plan. This is why only1 in 5 workers have a pension now.....employees are turning away from these in my experience, but it is inexplicable to me. I will retire in 6 years with a pension that is $120K a year. Or, I have the option of approximately a $2M lump sum payout. I don't understand why this is not attractive to workers today!

[@timesupgr.8471]

I have both military and FERS pensions. I made every mistake a person could make in preparation for retirement. Because I have defined benefit pensions, I can retire in comfort. No one has their 401k money at the end.

[@clicgear100]

35 months from my private pension and retirement. Seven years ago we were below broke, big changes have put us in a new house, debt free and ready to go. We started watching every penny and budgeting and it’s actually life changing.

[@HowToRetire]

@johnny t -- that's amazing! Congrats on your hard work!!! 🙌

[@christopherhennessey8991]

Good for you Johnny!

[@ltcwinger3123]

Do you have a segment on military high three pension vs the new blended retirement vs something on the civilian side. "Retiring" as early as 38 and starting another career seems amazing. It's hard to explain this to some of our younger generation, but the military pension at 20 years plus an education and experience seems priceless.

[@ClementRusso2]

Retirees facing financial challenges often couldn't save enough during their working years. Retirement decisions play a pivotal role. Despite my parents having similar years in civil service, my mom invested with a wealth manager, while my dad relied on his 401(k). As a result, my mom retired with approximately 3.7 million, whereas my dad retired with around 1.4 million

[@maliqmatthew1009]

@EthertonFORever Consider the potential risk to investors if we (advisors) primarily got paid on profits. Investment is a risk vs. reward equation, so if advisor income would only be based on profits, that means they'd decline to work with people who weren't young enough or comfortable enough to assume higher amounts of risk, and it might even mean trying to steer clients whose investor profile is more moderate towards pursuing riskier investment strategies. That isn't better.

[@Dave-sw2dm]

@Rodxmirixm , don't do it! I lost my shirt with her!

[@Prosecute-fauci]

Can barely buy a loaf of eggs for that…

[@philpeters8200]

After a 40 year career at AT&T I retired about 10 years ago. AT&T offered their pension payments either as a lump sum (upon retirement) or a monthly annuity. I opted for a lump sum, combined that with my 401K and rolled them both into into an IRA. I feel very, very fortunate to have received a pension. I do like that your analysis considers post retirement spending at 100% of employment spending. If you find that retirement spending is less than what you spent while working you can always adjust IRA distributions accordingly. Nice analysis.

[@sarge420]

my ex-MIL worked 20yrs at AT&T but was caught making long distance phone calls. She loss het job and pension. Dumb A.

[@sunnindawg]

Amazed you survived layoffs. Congrats

[@philpeters8200]

@@sunnindawg Thanks - dodging the annual "downsizing" event can be pretty stressful. When I finally decided to retire and hoped I would be selected for that year's force reduction with its associated termination package was the year they decided to not downsize. I retired anyhow and have never regretted making that decision. Life is funny.

[@larrydoran5749]

My Pension makes a big difference. Pension +SS+SS is 100.000/yr.

[@annabellswint5718]

My husband retired with 4 pensions at age 63. Financial advisor was shocked. I'm still in the working as an office nurse. Blessed for sure.

[@jamesloughnan8993]

Hi I retired with 3 pensions , my wife has two. Being away from the public has made retirement well worth it . Good luck

[@christophernava6685]

@@jamesloughnan8993 that's probably what I will have my military, federal government and my VA compensation I'm currently 31 have 10 more years to lock in my first pension.

[@dormandavis2767]

I have two pensions as a fire fighter retired and as a army veteran. My monthly expenses are 20% of what I bring in every month my healthcare cost from the military is a lot cheaper than through the fire department. I’m happy where I’m at and I have a small 401(k). At 62 and my house is almost paid for.

[@ralphholiman7401]

My federal pension of $61,200 a year (that I have been receiving since I retired at 52 (adjusted for COLAs) has been the best planning move I ever made. I had thought about leaving ten years from being qualified for a pension until my CPA ran the numbers for me. I would have done ten more years in prison after I saw that. With my wife's social security and my social security, and our modest 401 K added on, we're very comfortable in our retirement.

[@patriciacarlos]

We experienced the pinnacle of our era, but it is now gone. Like what happened to Rome, the corrupt administration will bring this nation to an end. My condolences go out to anyone who is close to retiring and may be worried about whether their pension will be enough to pay the rising cost of living. Insane fiscal policy, poor regulatory policy, poor energy policy, and poor foreign policy

[@stellaadams593]

50 and early retirement. I'm very worried about the future and where we're all heading, especially in terms of money and how to get by. I'm considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?

[@brendazvandasara]

@@davidjackson4437 You can look up the financial advisor using her complete name on your computer; I hire her since she looks after the portfolios of renowned investors...

[@kollykolly]

@@brendazvandasara I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look her up and send her a message. You've truly motivated me. God's blessings on you

[@georgejetson4378]

Yup, Totally agree! Trump really f*cked us good.

[@turnne]

@Patricia Carlos What year was this pinnacle that you mentioned? Form where I sit it seems like the people that have retired in the last 10 years or will recently retire have it much better than people will that have 30 years of work ahead of them They reaped the benefits of when the private sector offered a pension AND and a good 401K plan. Those days were gone a couple of decades ago

[@rockytrail3893]

Next week I start my new job with the City. I feel better about being a part of pension plan now.

[@HowToRetire]

Awesome! Congrats on the new gig, @Rocky Trail ! 🙌

[@mickydee6550]

I retired four years ago after almost 33 years with a large law enforcement agency in Southern California. I was 56 when I retired and my pension is currently 145K a year. My retirement will also pass on to my wife at the same level once I pass away. Defined benefit pensions are the best deal out there for workers, but they are rapidly going away for new hires. Pension Pete definitely has things better than Average Joe.

[@HowToRetire]

Micky -- that's awesome. You certainly earned every bit of that pension. Love that your wife will get 100% of that, too. Thanks for serving and protecting!

[@silverstar4289]

Of course the big question: have you sold your over priced home and bounced to a better State where your dollars do much more than California?

[@mikehawk9992]

Great video. My pension when I leave at 40 from the state police will be 80k a year . I maxed out my 457b as well as IRAs. I’ll be retired at 40!

[@richharr]

I just retired at 41, be preppared for the haters!

[@cg73]

My pension is such a blessing but it also feels like golden handcuffs because I really want to retire early

[@HowToRetire]

@C G -- good point. I guess they want to provide the incentive to keep you there! Hopefully, getting to your full vesting isn't too far out.

[@ayela562]

This. My husbands pension is matched by the employer and one of the best pensions in Canada . But if we want to see that money we have 18 more years and it just feels impossible sometimes.

[@MLopez-fu8fd]

@@ayela562 How old are you? 18 years sounds like a long time!! You must be at the beginning of your career?

[@jojowhite9296]

@@MLopez-fu8fd I worked 39 years with the federal government and retired at 62 in 2021. I could have retired at age 56 in 2015 but at a much reduced rate.

[@MLopez-fu8fd]

@@jojowhite9296 Right!!! That’s exactly why I’m still stuck where I am because I need the full Pension!! Cannot afford penalties.

[@dannyvera8475]

I wonder what's the best opportunities to invest now are, there are opinions but a little later I find out these opinions don't matter as a totally different turn of events plays out with the stocks they discussed therein

[@veramonique1724]

I’d suggest you look into passive index fund investing and learn some more. Buy Companies stock that you think has huge potential to grow. For me, I hired a stock expert and she provides entry and exit points on the security I focus on while I go about my other businesses. Investing has no one way to do it, eyes on the prize!!! Mistakes are expensive

[@dannyvera8475]

Hi, please could you share more insight for someone who has been in the red for too long? Also, I could use some referrals, how do I reach the expert that assists you?

[@easterlake]

The guy suggesting gold is an imbecile. Index fund investing through thick and thin is the way to go. Be disciplined. If the market drops stay invested. We've had over 25 bear markets in the last century, and the market has always come back. We're not even close to a bear market now. My wife and I have accumulated over 2 million dollars in our 401ks, and neither of us were high earners. Don't overthink it! Read some of John (Jack) Bogle's writings. He's the founder of Vanguard. It's a good place for you to start.

[@sandwichking83]

Don’t overthink it and don’t try to time the market. Key is stay in the market and contribute regularly.

[@claytonspann8032]

Wife has a very small pension for her service with the postal service of $6,000 / year. However, the big benefit for us is that we get to maintain her group health care policy, at the groups rate. So in essence her pension covers our medical needs until both of us reach Medicare age, even then we will review her current heath plan benefits vs Medicare. So that was the win for us, medical costs were managed by her pension plan. One caution for pension plans is the horror stories I have heard from some folks who saw their ‘guaranteed’ pension vanish as the company folded or was bought up by another organization. A risk assessment, pensions are a sound choice for a well-established, large organization, a bit riskier for smaller companies.

[@HowToRetire]

@Clayton spann -- having that healthcare benefit is huge, especially before age 65. You're right about some of these underfunded pensions. The PBGC will pick them up, but many participants could see their benefits slashed. Good comment! 🙏

[@Tarheelktb]

My wife and I are both retired from the Army. With our retirement and disability from the Army, we bring home over 130K a year. We both work the federal government now and plan to retire in about 5-7 years. I think our decision to stay in and retire from the Army was the best decision that we could have made for our future.

[@Prosecute-fauci]

Wait until she divorces you are takes half of your retirement.

[@scottriley9398]

I’m a pension Pete in one of the solvent Teamsters pension funds. Roughly $80/day that I work is paid into it. After 30 years I’ll receive around $50k a year plus Social Security and my current healthcare will follow me into retirement.

[@highlyillogical9399]

So glad I stayed enlisted until I was eligible for that pension. That check and my VA disability pay kicked in the day I separated (at the age of 40). It's a nice compliment to the work and investment earnings I currently make. I can't imagine the stress other people must feel trying to plan for retirement in this crazy economy.

[@patricksimon8943]

Same hear brother. Not to mention health insurance for my entire family at about $52/month.

[@HowToRetire]

Y'all earned it, for sure. Thank you both for your service. 🇺🇸

[@michaellazar4855]

One key item missing is that many pensions require the worker to contribute a sizeable portion of their pay. When I was a post-doc at a state school, they took 6% of my pay (I will ignore the fact that there was no possibility of vestment, so rather than 15% from the market, I got 1%). But usually in exchange, they offer 30% to 100% of your base pay when you fulfill all the requirements. If a person has a modest pension that gives them 30% of their highest three base salaries upon full retirement, they can get 25-30% from social security, they only need 40% from personal savings to make up the difference between their working years. This makes saving for retirement so much easier because about 60% of your income is guaranteed (almost) and since expenses typically go down because you no longer need to pay for retirement and savings goals, that can free up 20-30% of your base pay and since taxes are lower for those in retirement, that can free up another 20-30% of pay that you do not need. For example, if you make $100k per year, about $25k is taken in taxes, and if $30k goes into saving goals including retirement, that means you have been living on $45k per year. If you gain $30k from a pension and $25k from social security, you already have more cash than you had when working less the taxes. If your 401k and other investments give you another $25k per year, most of which are untaxed (if you did Roth) that is an income of $80k, your taxes are 15% of $30k ($4.5k) + 15% of 15% of $30k (I think social security is tax exempt to 85% of your earnings to a certain point, $0.7k) and no taxes on the 401k distribution. I think for the large majority of people, a pension is a good thing. It forces something to be taken for retirement because we all know that most people are clueless when it comes to long term financial planning. The pension is probably a drag on a financial guru who can probably out perform a pension plan. Government and companies that have pensions probably pay OK to well, but that is about all you can do there. Government will not give you much beyond base pay and modest bonuses and neither will established companies, but established companies can give you stock, but those will not really tip the balance in your favor unless the company experiences large amounts of growth over your career while you own a considerable amount of shares. Start-ups like Google or Tesla is where you want to be if you want to do better than the average, but that is also risky because you do not know who the next Google or Tesla will be, but if you are lucky, that payout becomes your "pension", and a good one at that if you manage it well.

[@Winkkin]

The pension reform act of 78 made sure if you called it a pension you had to fund it in some manner. It also put caps on how much you could promise to pay out. Most pensions cap out at 70% of salary if the employee is enrolled in Social Security (almost all employees after 78) which reimburses about 28% of a persons pre-retirement salary. Getting a full pension is almost like getting paid to stay home.

[@HowToRetire]

@Winkkin -- I think it all depends on how the pension plan was written these days. That was certainly the way that they used to do it years ago. I'd venture to guess that's also how most public-sector pensions work these days, though.

[@roburb73]

That's s low pension average, but it is the average. My pension is extremely beneficial and plays a large role in our investment strategy. I'm a 27 year Active Duty retired E-9. My pension + VA disability is more than $85K annually. That alone is a gold mine. It allows me to be financially independent with nothing else. An equally impressive benefit is Tricare and its cost! $50 a month for a family medical plan with a $3K catastrophic cap is worth it's weight in gold. I couldn't do that on a $27K pension, so size matters!!

[@HowToRetire]

Your pension, disability, and Tricare are well deserved, Rob! Thanks for your service! 🙏🇺🇸

[@leschurchill804]

I have a pension, and it does make a difference for me. I never made a salary of 90K; but I also have a RAccount as well, on top of everything and SS each month. It works out very well for me. Nursing hme costs can be handled with LTC insurance, which I have. Ms. L. Churchill

[@HowToRetire]

That's awesome, Ms. Churchill! Sounds like you have retirement well under control!

[@UrquidezFamily]

I'm so glad I went into the military and got my pension. Best decision ever!!

[@reversiontothemean6129]

I am Pension Pete except the pension being way more than that. My spouse is Average Angie, not Andy. What we learned is this. We made mistakes early and became self tought on finances over the years. We then focused on making sure our children benefited from time in the martket so there wasn't any more average in retirement. They had Roth IRAs at 16ish and maxed yearly, with us matching the first few years. Low costs index funds and no looking back. Then, we allowed them to gather themselves in their careers and stay at home for a few years rent free as long as they maxed retirement savings and saved for a home. So far so good (great actualy). The point is, if we can't change the past. Help the family tree by changing the future.

[@HowToRetire]

Bravo, sir! 🙌 First off, thank you for posting a comment that's positive. But most importantly, kudos to you and Angie for having the wisdom and self-awareness to set the next generation on an amazing path. This comment totally made my day.

[@davefoster2962]

Worked at big tech companies more than a decade, saved up/invested many years, became a Millionaire at age 38. I own a home as well as rental property and 401K. Then 3 years ago I moved to public sector with gov't DBPP pension for better job security. Have no regret since that I made right career move. When your 20 or 30s, go to work for big corps for higher salary but in your 40 and 50s, security and stability matters the most. Recent layoffs in Google, MS and other big techs remind me again that I made right decision. I'll have 4 income stream when I retire in about 10+ yrs in 50s. 1) Rental property - I'm already collecting monthly rent now. 2) 401K dividend stock in my portfolio 3) DBPP pension by state gov't 4) SS

[@TreesOnTheBeach]

As a software developer, I accepted lower pay for a job in 2000, but it had a pension. I was able to retire in 2022 thanks to that pension. Unfortunately, due to the low pay, I wasn't able to save much over that time, but I'm about to pay off my house and still have a meager pension to live on. I'm glad to get out of the rat race, at least a little bit.

[@vicpinto1970]

You should do a video on taking a pension lump sum versus the annuity.

[@richdouglas2311]

I'm Double Dougie, being paid both a military pension (since age 36) and a civil service pension (beginning this year). For federal employees, the pensions are a lot lower than they used to be since the system was redesigned in 1987. We receive 1% of our highest 3 years of income for each year served. So, if you made $120K (average high 3 years) and worked for 20 years, you'd get an annual pension of $24K. But there are two other factors: federal employees also participate in a defined contribution plan and can now count their civil service time towards Social Security (and they make SSA contributions like everyone else, too).

[@HowToRetire]

Ha! Double Dougie! I like it. Thank you for the update on the Federal pension changes, Rich. I was kind of trying to focus on the average private pension in this video, but there seem to be a lot of Federal employees talking benefits in the comments. This is great stuff.

[@matthewconaway3510]

I work at a steel mill as a salaried manager. The union workforce has a generous pension of $3000/month but benefits are slowly getting cut. I’m encouraging everyone to save in a 401K to protect themselves from further cuts, especially anyone under 40 years old. I’m 401k only, and have been maxing my account out the last decade. It’s amazing what compounding does!

[@HowToRetire]

Matthew -- good call on saving to the 401(k), especially for the younger folks. Let's hope the full $3,000 / month is available for everyone, but it doesn't hurt to have other options! My college roommate was an intern at Georgetown Steel back in the 90s. (I worked at a paper mill in the summer.) I got to tour the steel mill -- it was a pretty fascinating operation.

[@lindsayjohnston7465]

They also get SSI along with pension

[@lindsayjohnston7465]

401k is dependent on Wall Street pensions are conservatively investmented Kentucky hum anti union politicians sabotage

[@jonny6758]

Would you recommend 401 over pension

[@matthewconaway3510]

@@jonny6758 if you’re disciplined enough to save 15-25% every paycheck, yes I recommend it.

[@doggydude4123]

I work for state government and we contribute 8% gross. This creates a lower taxable gross. We also get healthcare paid when we retired as well after a minimum 20-25 years of state service. The pension formula goes like this=Years of service x Top 3 consecutive years of salary x Multiplier %. For me, it'll be 1% multiplier when I retire at 52 so let's say I make $100k a year and work for 25 years. That's 25 years x $100k x 1%= $25k a year for my pension payout. If I work in private industry and put that 8% in the market and compound it for 25 years at a 7% return, that'll be $507k. Assume a 4% safe withdraw rate, that's $20k a year but with no healthcare.

[@jessefletcher9116]

I retired USAFR at age 38 so I wait until age 60 to get my retirement. For me it's not so much the monthly retirement check I'll be getting as it is that once I start drawing that pay I am eligible to enroll in Tricare Prime or Tricare Select which will reduce our expenses for health care insurance enormously in retirement, costs only $54/month to cover both of us. Before learning about Tricare eligibility I had budgeted annual cost of $15,000 for health care insurance, now reduced to $650 annual.

[@HowToRetire]

That's awesome, Jesse. Yeah -- Tricare is a big help when compared to paying for an ACA plan. Thanks for your service! 🙏🇺🇸

[@jimhanratty9543]

Your only key to your plan is not to die before age 60. I'm a retired guardsmen, you would be surprised how many of ARNG soldiers never made to age 60. Also tricare is great a great deal compared to private sector health plans.

[@rickynorris1694]

The NC pension fund is number 2 in the USA. It has about 91 billion dollars. We contribute 6 percent with each paycheck. I am going to retire at 56 with 25 years of service and get 80 percent of my income in retirement. I will also have the same insurance plan at no monthly cost to me. I thank God every day for it. 😊😊

[@grandcosmo]

Remember that most state and local employees do not pay into Social Security so their benefits check will be very small unless they worked for a number of years in the private sector. However, that is a small price to pay to have a government pension when you retire.

[@Fishouta]

What is a local employee?

[@jojowhite9296]

@@Fishouta city or county employee would be my guess.

[@Andrew-zs5tc]

Excellent video. I hope your audience includes younger people as well as those of us nearing retirement. Many years ago, my mother advised me to get a job in the State University System. In addition to a pension, State governments often include retiree health insurance and University systems often include free or reduced cost tuition. Combining those three makes a great foundation for retirement.

[@DavidEVogel]

Your mom is smart. Salary working for the government may stink, but the retirement benefits can be substantial.

[@HowToRetire]

Thanks, @Andrew ! Unfortunately, most folks who watch my channel are between 55 and 70, but there are a few intrepid young people watching. It really does make it so much easier if you start early. Your mom knew what she was talking about when she dropped that wisdom on you back then!

[@Tommy_playlists]

I spent 20 years in the military and unfortunately did not save in a TSP. I am fortunate enough to be retired at age 42 with a pension and 100% disability payment from the VA. I wouldn’t have been able to live my current lifestyle without the VA monthly income. After taxes I am left with about $6,000 a month, I am debt free and just now starting to invest in the market. I don’t plan on working for someone else ever again. I just live a modest life and now invest heavy in the market. I do get a 2-3% raise every year for inflation and this income is for the rest of my life. Pension and VA disability allowed for my past mistakes for not investing. I’m am blessed and now I live a great stress free life while investing while I am retired.

[@HowToRetire]

@Thomas Edwards -- so glad you have that monthly income to fall back on. You certainly earned it. Thanks for your service! 🙏🇺🇸

[@drehardin]

Hoooyah ⚓

[@howellwong11]

You are indeed blessed.

[@gregmacklin9758]

How is being disabled fortunate??

[@jaredflurry937]

@@gregmacklin9758 The VA disability system is highly exploitable. A paratrooper whose spine compressed two inches over the course of 500 jumps might be declared 30% disabled; a washout trainee who got PTSD from basic might get 100%. It kinda comes down to how much documentation exists and how hard a person fights…to include hiring attorneys who specialize in raising disability percentages.

[@skibum6422]

Great video but I think you are missing one thing with the SS calculation on Pete. The Government Pension Offset from SS will knock down Pete's SS payment by as much as $500 although the WEP can reduce that amount depending on the number of years he has substantial contributions.

[@HowToRetire]

Great call on the WEP! That's a "gotcha" that's hanging out there for some folks. In this example, I wanted to see how a small private pension would hold up. So, let's assume Pete worked for a private security company...

[@gary9933]

It also depends if his pension plan even paid into SS.

[@jojowhite9296]

Any employee hired after 1984 are part of the FERS and also pay into S.S. so they have no offset.

[@robertsole9970]

I will get a FERS pension of about 4500 per month and Social security at 2400 per month and have my 401K too. But Ive stayed in federal service for 30 years. Too many people jump around in jobs for 20 years or more, and that really messes up retirement plans.

[@patricksimon8943]

They reduced my Mother's SS two 1/3 of her pension because she has a VA Pension. Just some info to plan for a worse case scenario.

[@one100billneoone4]

Eligible for retirement at age 49. Fortunately it’s a lifetime pension. Pension will only pay out around $3,500 monthly but will include lifetime FREE health insurance which is a HUGE plus. I’ve always lived below my means. Living below my means has allowed me to achieve financial freedom. No credit card or student debts, no car payment and most importantly no mortgage. Bought a brand new condo last summer in preparation for retirement and loving it. Beginning this year I restricted myself to $2,400 net monthly income. The rest of my pay goes into maxing out a 457, paying medical insurance, paying into the pension, state and federal taxes, etc. Reason for living on a budget is to see if I’ll be able to afford retirement. Fortunately, I have been able to live well and still save $$ and increasing my emergency fund even more. Once I retire, I plan on living in Mexico for 4-6 months out of the year. Basically avoiding the winter months of Colorado. Living in Mexico 4-6 months will allow me to enjoy an even better quality of life on much less $$ and keep saving $$$. In my case, the key to having the opportunity to retire and possibly afford it is being debt free. The piece of mind, the freedom you experience and have by not being in debt is unlike any feeling/emotion I’ve ever experienced. Remember, it didn’t happen overnight. I’ve been working on it for 18 years. LIVE BELOW YOUR MEANS!!

[@meibing4912]

IMHO the real difference between the two is that pension Pete can allow himself to invest much more aggressively and thus - over the long run AND during retirement - have larger returns on his savings. This makes a huge difference in the real world. I have a solid pension plan to ensure I can withstand some bad investment years and will be 100% in stocks (not counting real estate and the pension plan) with my savings during retirement.

[@HowToRetire]

@Mei Bing -- it can also give Pension Pete the luxury of *not* taking risk if he doesn't need/want to do so. Great comment! 🙏

[@genxx2724]

💯 Brilliant!

[@davidroush1224]

Excellent point. We have been retired for almost 8 years and lived only on our two pensions. Part of the reason we originally chose our employer as that they offered pensions. We made a little less money because of that but because we knew we had that stability, we kept most of our savings invested in the market all of our working careers. Those savings grew to large totals and we were able to retire mid fifties. Since we retired, our net worth has doubled. Most of the money is in dividend paying stocks that we DRIP, so that income stream is also increasing regularly for the time when RMDs force us to begin drawing some of it. The security a pension provides allows one to take more risks with the investments and over long periods of time can have a significant impact.

[@meibing4912]

@@davidroush1224 fully agree - the flexibility to increase your long term risk profile is a huge advantage in the long run that too many people overlook.. Good luck.

[@mariahhayes5089]

Investing in the stock market is the best option to make a passive income. Virtually all the markets are crazy, most people pay more attention to the shiniest position on the graph, I’m keeping a diversified portfolio.

[@danielkey1463]

I’m retired. Too many think retirement is a destination, It’s actually a new journey.

[@raymondbarnes5264]

To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal.

[@mariahhayes5089]

@@raymondbarnes5264 Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.

[@helenoliver4838]

@@mariahhayes5089who would you endorse? I've been in the shadows for too long

[@mariahhayes5089]

@@danielkey1463 Very correct.

[@nasisimi1]

If your mortgage is paid off by the time you retire that's a big help and drop in your living expenses. Buying a home is like saving for retirement in a way as well.

[@HowToRetire]

Great call, @TixOn Demand. There can be some instances where carrying the mortgage into retirement makes sense, especially at the low interest rates we've seen recently. I made a video about it: kzbin.info/www/bejne/j4LPdZpngt19r9E However, sleeping well at night counts for a lot!

[@jenkinzbrown9519]

Every family have that one person whom will break their financial burden, hope you are the person, i most don't worry retirement due to trading, Cause when you invest you're buying a day you don't have to work.

[@allisonmatt6314]

Assets that can make you rich Bitcoin Stocks Real estate

[@alexanderjason1960]

@@allisonmatt6314 Stock's are crashing, Bitcoin investments Right now will be at every wise individuals list, in a month you will be ecstatic with the decision you made today

[@marrylisaacademy9300]

I wish for a lifetime and afterlife i don't have work for anyone especially my crazy boss

[@picassosongs9409]

@@allisonmatt6314 You're right, it's obvious a lot of people remain poor due to ignorance

[@fernandoduarte6514]

@@allisonmatt6314 Obviously trading in bitcoin is very volatile and risky to trade that's the reason most traders trade with a company

[@nightengale2123]

I just retired at age 64 after a 44 year nursing career. The 1st 23 of those years I worked in several no pension private sector positions and the last 21 years worked for the Federal Government/VA.With recent COLA my FERS pension is now $27k. I was suddenly widowed 2 weeks after starting my Fed job, and having my pension allowed me to be able to afford to 1st claim my reduced Social Security survivor's benefit so I can delay claiming my own at 70 estimated to be around $42k and not have to deplete my TSP/401k in the process. And as a single/0 tax filer, at 70 having my SS as my largest income stream, pension 2nd, and TSP withdrawals 3rd I will see more $$ in my pocket than back to Uncle Sam's pocket.

[@HowToRetire]

@Nightengale 212 -- So sorry to hear. You were smart to take the survivor's benefit early and allow your Social Security retirement benefit to accrue. Glad you have these income streams for retirement! 🙏

[@neilpuckett359]

Waiting until you're 70 is exactly what SS wants people to do they're counting on you dying, the sooner the better.

[@jojowhite9296]

Sorry about your husband but as a fellow federal retiree, that FERS pension along with S.S. and TSP makes retirement financially worry free.

[@brianallen140]

The game changer for most public workers with pensions is that many get health insurance until they die

[@JohnBowl14690]

I could be wrong, but they get health insurance until medi-care kicks in.

[@CrackberryMe]

Facts.

[@GoldCountryTrapping]

Our bargaining unit lost that perk. You are right though. It was a big value.

[@Ronin1936]

This is my 23rd year of retirement. Pension, or any other form of income in most cases are necessary to retire comfortably. It serves as an important supplement to monthly income, and will usually help with the unexpected bills we all have until the day we are gone! If not, it will obviously add to the estate you may have for your benefactors.

[@dueymiller5795]

I have a pension that pays 925 a month. Now 905. That's because my health care is taken out of my pension. I also get social security which is going up every year. Because I have no loans or mortgages I can live on the $30k, or so a year.

[@stephenwright133]

I feel so fortunate to have a pension. It will cover about 1/3 of my projected expenses in retirement.

[@HowToRetire]

@Stephen Wright -- that's awesome! That'll make things much, much easier in retirement. Thanks for the comment! 🙏

[@RepuBlicOfChaD]

I have a pension plus I max out a 457b and Roth IRA accounts. Started when I was 35....a little late but, I'll be able to retire by 55 and not have to worry about income.

[@HowToRetire]

That's awesome! Congrats on getting started when you did! 🙌

[@lindsayjohnston7465]

My pension pays same amount every month until I die Can you do that with 401 k especially if stock market tanks

[@busterbrown1686]

Yes. Rule of thumb is 3% and that's taxed. If the markets tank that means you'll run out of money sooner. Pension defined until death, 401k defined (or not) until zero balance.

[@inquirer1016]

Public pensions come with free or subsidizing medical insurance cost. That's a huge benefit that's overlooked. They also come with COLA which is unlikely with private company pension. No doubt Pension Pete got the better position.

[@dking1362]

I have been retired from public school teaching after 27 years of service. I am grateful for the $19,500/yr I receive as a pension, but its certainly is not going to fund a luxurious life - better have another plan! Also, I do not receive ANY medical benefits/insurance. I will never receive a COLA. Be careful making sweeping generalizations....perhaps this is a difference from state to state? I am in Indiana.

[@skibum6422]

Sorry most public pensions do not come with any medical insurance coverage although some do. Pete will most likely take a $500 hit on his SS too because of the WEP reduction.

[@skibum6422]

@@dking1362 I do not get medical coverage with my pension either but at least I get up to a 4% COLA every year.

[@dking1362]

@@skibum6422 Good for you! In 25 years, my pension will be worth almost nothing.

[@HowToRetire]

I originally wanted this example to reflect what kind of difference a small private pension would make. (Let's assume that Pension Pete was a private security guard? I am already running out of emojis to use!) However, it sounds like I should make a video about public pensions?

[@CrackberryMe]

So thankful I have a pension, along with trad 401k, trad 457, 2 Roth’s and health insurance coverage for life. I think in this current financial environment you better have a 5 legged stool instead of 3.

[@joechang8696]

you cannot claim two equal salaries, differing in benefit - pension, no pension. figure what the cost of the pension to the company is, then treat that as additional salary or matching 401k. also, many people do not stay long enough to vest in the pension

[@HowToRetire]

Great input, Joe! I may make a follow-up... 🙏

[@harleyb.birdwhisperer]

Having an income you won’t outlive takes a lot of worry out of senior life. Pension, annuity, disability benefit - feather your nest.

[@turnne]

A few things here to mention. Many employers raised their 401K match levels when they reduced the pension availability. I used to work for a company that didnt offer as high a rate of rate company rate for pension eligible employees

[@meibing4912]

In Europe many countries force people to put money into pension savings. Typically 15-17%. Its works wonders for people in retirement (9% is far too low). Problem in the US is that too many do not have the discipline and/or motivation to save for the pension. Pension plans are still private and individual. But the savings happen. Not so for 401K accounts.

[@HowToRetire]

This pretty much sums up the issue!

[@darylturcott]

We have that, its called social security!

[@meibing4912]

@@darylturcott social security is a base line pension. We also have that in Europe. Its the extra mandatory private pensions that will allow those Europeans who have it to have as much - or more - money available in pension as when working. My own public+mandatory life long pension will be around 120% of my salary. That's somewhat above average and in fact too much. But it feels good.

[@mikes96fs]

$1000 is way to low of a number for Pete’s pension. I have a pension and at 30 years of working (12 years away for me) I will be making 81% of my ending salary (2.7% per year at a minimum age of 55). Since I will no longer be paying into retirement or paying union dues, 81% will end up being around the same take home pay that I will be getting at the age of retirement. There is also a 3% cost of living increase each year after that. I also put in an additional 13% of my before tax income into a deferred compensation plan that should be around 800,000-1,000,000 at the time of retirement.

[@larriveeman]

my federal pension is 68k and VA is 15K

[@HowToRetire]

Wow! That's awesome!

[@hanwagu9967]

and VA disability isn't taxable either state or federal, so it's actually higher when you look at equivalent taxable income.

[@halfcentury1112]

I don't know where you live but here in NJ/NY there a 1000's of State and Local pensioners with over 100k/yr Pensions - The retired LEO/Firemen/Teachers I know all are at these levels...Not to mention they all retire after 20-25 years of service so usually BEFORE age 60

[@HowToRetire]

@Halfcentury111 -- good point. In this example, I was trying to keep the pension closer to the private sector average. Let's just say that Pension Pete works at a private security outfit! Our first responders earn every bit of those pensions.

[@jojowhite9296]

I'm sure it was just a round number to help show the value of even a small pension compared to "no pension".

[@TVHouseHistorian]

Didn't have much in terms of personal retirement savings until at 42, I came into my current public sector job which uses a 401a retirement vehicle. The agency pays 8% of my gross pay before overtime, and I pay 12% of my entire gross, which includes overtime. Now being 48 years old, I'm getting more and more engaged in the process of saving with each passing year, so last year I opened up a 457 plan with my employer where I contribute 4%. It seems like a huge chunk of money going into savings, but I feel like I have some catching up to do in order to make it to retirement. Years ago, I worked in a private sector job which will provide a very SMALL pension (I wasn't there more than 6 or 7 years), and I also have a Rollover IRA with an 11k balance. I feel like I have a lot of retirement accounts, but not nearly enough time to save. My goal is to get some side-gigs going and pay off my house before I'm 65 so my expenses are lower. It's still scary.

[@coleylatika]

ALOT OF US DONT UNDERSTAND WHAT FINANCIAL LITERACY IS AND IT IS A VERY BIG PROBLEM ,U DONT ALWAYS HAVE TO HAVE A JOB THAT OFFERS A 401K U HAVE OTHER INVESTMENT VEHICLES THAT CAN SPEED UP RETIREMENT BUT MOST PEOPLE DONT KNOW ABOUT THESE THINGS. U HAVE VANGUARD THAT OFFERS A WIDE VANGUARD VARIETY OF INVESTMENTS I WAS COACHED BY A VERY SUCESSFUL PERSON AND SHE IS RETIRING AT 3O IN THE NEXT 1 YEAR AS A MULTIMILLIONAIRE IN THE US OR A BILLIONAIRE IN JAMAICA THERE IS A LOT OF OPPORTUNITIES OUT THERE

[@coleylatika]

SOME PEOPLE HATE THEIR JOBS BUT BECAUSE WE DONT KNOW THAT WE ALL CAN BECOME SUCESSFUL BY INVESTING, STARTING A BUSINESS AND BUILD WEALTH STOP TRAPPING YOURSELVES BECAUSE OF TRADITIONAL PENSIONS OTHER OPPORTUNITIES ARE OUT THERE

[@aitornavarro6597]

I don't really understand. Are pensions also vested in stocks, mutual funds, bonds like in 401k's, IRA's? Also can you have both a pension and 401k with an employer or must you choose between one of the two?

[@busterbrown1686]

No pensions is a guaranteed income, not determined by the markets. Pensions are kept in a pension fund like a high yield savings account (my guess). Yes I have a 401k (not matched) and a pension. My wife has a pension and 403b. About $8,000 monthly pensions and $550k in 401k and 403b. We are under 60 so no ss yet.

[@johnd0827]

For a more realistic comparison, Average Andy would already have a great pool of funds available if you applied some type of employer match to these calculations. I'd like to know how much of an employer match, in these same-to-same comparison would match different pension levels. Would Average Andy with a 4% match from the start of his tax sheltered account beat out the pension of $1,000 per month? Would it take an 8% match?

[@HowToRetire]

Great hypothetical, John. Here, I assumed a match of 100% up to 3% for both. I think a good change up might be for Pension Pete to have contributed to his pension plan instead of the 401(k)... That might make for an interesting comparison... 🧐

[@alanyoung159]

@@HowToRetire I agree, the video's comparison was good but a better comparison would need to have pension pete contribute to pension vs average andy getting the 401k match. I know as companies stopped providing pensions, the instead provided it through company matching or extra towards 401k. It wasnt really that they completely didnt have any retirement benefits at all. They just shifted it (so that employees manage the benefits given to them)

[@mrmott44]

Building trade union pensions are usually close to 100% of annual work income. Add social security and Roth/IRA investments and retirement looks pretty good.

[@HowToRetire]

Wow! 100% is fantastic! You don't hear that a lot these days.

[@angiew4544]

Exactly! My husband has been in the Carpenters union for 35 years and his pension as of now will be a little over $5300 per month. Not 100% compared to what he makes now but close enough.

[@mrmott44]

@@angiew4544 add social security, even at 62 ( or Disability) and it’s hard to pass up !!!

[@angiew4544]

@@mrmott44 right, plus won't have to pay the huge gas prices in California to go to work and back , no pension taken out and no union dues .

[@mrmott44]

@@angiew4544 yes. And stare and local taxes, and social security and Medicare taxes stop too. Those savings equal my (union) subsidized health insurance until Medicare kicks in.

[@travisgodbold7070]

Gov jobs are great for pensions, the other jobs being self-employed or working high dollar job for college grad company are good also. It usually depends on your job specialty and skills. But there's three major ways to reach retirement in the workforce, work for the gov, get a good self-employed job that eventually reaches six figures, or get a college degree and work at a specialty job that eventually nets you six figures. All other paths are a waste of time and have consequences later in life. Avoid these paths

[@yamahayz0426]

Skilled trades are a good path as well, Most notable Union construction. Im a tinner and in the sheet metal workers union our pension pays out at roughly $4000 a month for our local, Journeyman wage is $48.60 an hr on the check. All our retirement plans and healthcare are all self funded. We are payed out as a total package which is around $75hr and then we control which funds are sent where. Our pension is pretty solid because its not based off one employer.

[@transitengineer]

Thank you, for sharing this information however, I noticed one error. If you are able to apply for a local government pension then you will louse some of your social security benefits under the "Wind-Fall" rule. For myself, this will result in about a 20 percent reduction in my social security monthly checks but for others it can be much higher. Your example works fine if, both workers have private employment because the Wind-Fall" rule only applies to State, County, or City pensions. When, I retire in 2-years will be receiving two pensions one from a private company plan (with 15-years of employment) and the other from a City plan (with 20-years of employment).

[@HowToRetire]

@transitengineer -- great point here. My intent was to have this be a private pension that's representative of the average pension someone would get from a private company. My oversight was using the policeman emoji to represent Pension Pete. Maybe just think of him as a private security guard!

[@archoplites]

I believe this the case if your government job does not withhold Social Security tax (or partial?) from your paycheck? If your government job does withhold SS tax and you made substantial contributions for at least 30 years you should not be affected by the SSA Windfall Provision. Anything less than 30 years it is reduced by a diminishing return based on years contributing to SS tax, using your example you had 26 years of contributions.

[@RoadieWingZZ]

Windfall penalty only applies if your state/local government employer DIDN’T withold SS in your paycheck. Many actually do/did, so no reduction in SS benefits for those pensioners.

[@ms.annthrope415]

I'm retired on a pension after 20 years as a prosecutor. My pension is about $82,000 a year. Adding that to my social security, I'm just over 6 figures. That's just to wake up and scratch my ass and get a cup of coffee. It would take $2 million in the bank to get $82,000 a year whether it be stocks or some sort of annuity. Cant beat a pension job.

[@solvend]

I get a fed govt pension, a 401k(thrift savings plan matched to 5%), and a VA pension tax free(90% disabled) all before im eligible for social security. I also have the last decade plus of being top earner as far as social security is concerned Ive been putting 15% of my gross into my 401k for the last decade. Additionally, dont retire til your home is paid off. Paid mine off 5 years ago. Now i only pay property tax and insurance a measely ~$3,000/year.

[@donnyclause733]

As a public employee, it’s more than likely Pete will not be retiring at 65 especially if he is a police office as depicted. Also when you talk about spouses splitting the benefit did you factor in the windfall elimination?

[@midlife_minimalist]

I’m one of those lucky 12% that has a private pension. They finally stopped adding to it other than interest about a year ago (although they now add the same amount to my 401k) and it’s not huge but will give me some nice guaranteed additional income.

[@HowToRetire]

Awesome, @Hilary H ! So nice to have that retirement income! 🙌

[@palesomim4306]

Hello, I have a hypothetical question: suppose you had the opportunity to buyback a year to add to your retirement (an additional ($3800 per year for the rest of your life. Assuming I live 30 more years). The upfront cost would be $75,000. Would that be a smart move or keep the $75,000 in a mutual fund and let it grow? Thank you for your time and helpful content

[@palesomim4306]

Thank you

[@zdiver1]

I started my 401K at 23 in 1985 and retired early @55 in 2016 with a full pension and $650,000. in my rollover IRA and with DJT in office it turned into 1.2M and then Bone head took over and it closed this past week at $970K. I did start distributions @59.6. and will take SSI at 62 in 2023. My pension is $55K a year with Medical and dental and I am taking $3K a month distribution. I worked 32 years for SWX and heard the company has changed the pension plan for new hires.

[@anchorsaweigh9893]

Pension for me is more valuable than the monetary aspect. I have a DoD pension after 20yrs of Service. I get Medical, Dental and Base Privilege’s for life. I also get a VA Disability Benefit as well. What makes it valuable is it gives me the freedom to make investments and take risk. That has paid off over 10 fold of just what the monetary benefit is. I’ve only been retired 2 years but I’ve made so much more money in that time frame than the previous 20. Even if something fails the lights stay on and I have food to eat regardless.

[@dking1362]

Thank you for your service. Our veterans deserve every possible benefit.

[@davidsiemer7578]

Glad to see this video; I’ll have 3 pensions totaling $2200 a month and SS pmt of $2K a mo at 65, so $4200 total. I’ll have $220K in my 401K; I’m okay with that situation

[@HowToRetire]

That's awesome, David! That'll make a huge difference. 🙌

[@mmaranta785]

401k being the biggest variable, especially if you are heavy in stocks

[@adamsgreen4220]

*Great video, trading come with a lot of benefits And I have just bought my first house through it. As a beginner I was scared of loosing my savings but I’m glad I took the bold step that is now favoring me. My pension has become a bonus for me. *

[@adamsgreen4220]

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[@marktillburg8362]

​@zackmccarthy3444search "Michael T Abagnale"

[@marktillburg8362]

On FACEBOOK

[@marktillburg8362]

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[@annmannings1840]

​@marktaylor8839New traders make the mistake of trading on their own without having the required skills to help them benefit from the market. i was once like that but all changed thanks to expert Michael Abagnale

[@patcurrie9888]

I have 2 small pensions, one started 3 yrs ago, and wife will have a full pension. We have a good sized IRA form my 401Ks too. I feel pretty good having one foot in old school, how it used to be, and still participating in the current situation with a small Roth IRA, at this point. The markets have been shaky lately tho. Pensions are King, reliable.

[@briangasser973]

A $90000 civil service income is going to generate a much larger pension than $1000 a month. If you are going to use the median pension in the US for your calculations, you need to also use the median income which is significantly less tha $90k. Your example is biased from the start. Most state pensions will payout 50-60% percent is the employee works an entire career. At a $90k salary, that would be a $45k pension/yr or around $3800 a month.

[@fortgrove3166]

Yes that was a modest pension. Also, federal pensions get Cola increases. My pension started at 60k a year.

[@diamonddave2663]

I recently retired with a public pension. Pensions definitely make a big difference in allowing you to retire with steady, consistent and adequate retirement incomes. However, pensions are not all the same obviously. This hypothetical example, while deliberately contrived as the video narrator warns us, assumes that the pensioner and the non-pensioner both get the same social security benefit amounts. What many people don't know is that pensions typically require you to forego getting social security benefits for the quarters/years that you are working in a pensioned job. So, someone who works 30 years in a job that earns a pension benefit will have far, far less (if anything) in social security earnings than someone who works 30 years in private industry and makes the same salary as them. And, if the pensioner has worked in the private sector before or after their pensioned career, then they get penalized in the amount of social security they can collect in retirement due to their having a pension, and the penalty is financially significant, cutting Social Security benefits to about 1/3 of the amount they could be, at least in my case. And yes, some pensions have COLAs. Mine does, but it doesn't start until 5 years after retirement. And, as far as my health benefits continuing in retirement, I don't get any breaks or subsidies in that regard. My employer offered to continue the health care benefits I had in my job. However, I declined that because continuing private health insurance benefits for me worked more like COBRA, and I would have had to pay both the hundreds I usually paid for premiums as well as the hundreds that the employer paid when I was working full-time. It was cheaper for me and my family just to go on my wife's health insurance plan as she is still working full-time. Either way, we continue to pay about $800 a month in private health care premiums, not including co-pays, deductibles, etc. We determined that, if she were to lose her job in the future, we would have to buy health insurance via the health exchange marketplace as provided by the Affordable Care Act ("Obamacare") given that we are not Medicare-earning age yet. We estimated that, with the government subsidies the ACA allows for those without access to a job offering health insurance, we would only pay $200 a month for comparable family health insurance through healthcare.gov. While we pay $800 a month in health insurance premiums now, it is good to know there is some kind of social safety net through the ACA available to us if my wife should, God forbid, lose her job for any reason. Additional interesting info about pensions: kzbin.info/www/bejne/hpvYkH5jqNCDpNU.

[@lovechangesus]

Hi, I’m very confused about the social security and pension differences. When I look up my retirement pension it mentions the difference I will receive once social security starts. And unfortunately, I don’t understand what this means financially to me. I would greatly appreciate if you could explain it further. Thank you.

[@amaurysarmiento3952]

The reduced SSB is only true if you are subject to the windfall provision. Meaning your government entity you worked for didn’t deduct SS tax from your pay. I work for a county but i pay into SS. So at retirement I will not be affected by the windfall provision.

[@stevelopez372]

@@amaurysarmiento3952 Government Pension Offset (GPO) is what effects Social Security Benefits if you do not pay into Social Security System not the Windfall provision. My wife and I are Cal-PERS pension recipients. I was eligible for Social Security having just enough credits to receive a small amount. Upon retirement that small amount was reduced via the GPO provision. My City Employer did not pay into the system. However there was more than enough to pay the required Medicare payments starting at 65yrs. Of age. My Wife’s School district employer pays into Social Security so she will not be hit with the GPO provision due to her receiving her pension. Thankfully we will be able to save all of her Social Security. Partly due to the fact that The city I worked for guaranteed full medical and dental payments for my spouse and I for Life. A benefit that was abolished for post 1991 employees.

[@mitchbandalan9450]

I went to the website and couldn't find the downloadable spreadsheet. I have 2 passive incomes (Civilian Pension and Military Pension) so I wanted to see how much I need in my portfolio to retire comfortably.

[@bugsy74]

I hate being a cop but love the fact I get to retire years before many of my colleagues with a huge pension. Only thing keeping me in law enforcement honestly lol

[@beatricerights]

I'm a nyc teacher and it's the same for me. Disrepectful supervisors will take the joy out of your life.

[@paulpek6616]

how about the windfall Claus for SS and losing 30 percent with pension if you don't pay into both plans?

[@jc1979af]

Military retirement starts at 20 years served. So you can start to collect a pension as early as 38 years old. I would like to see these calculations on this

[@stkdr]

37

[@jc1979af]

@@stkdr good point. Forgot about the early entry options

[@mcyrus8]

Military retirement has changed, you no longer get it after 20 years unless you are at retirement age.

[@WesleyStoodley]

@@mcyrus8 you can retire at 20 yr but it’s only at 50% of your pay and this is for active duty only. National guard and reserve can only collect retirement at age 65.

[@drehardin]

@@mcyrus8 False

[@bernie9728]

For what it's worth I retired 7 years ago at age 62. No pension so I went on Social Security right away. My wife retired 2 years later also at 62. She too went on Social Security as well. So far we are having no issues just with our Social Securty.

[@514140mgk]

A pension plan depends on where you get your pension. A federal Gov. Pension and a railroad retirement pension are fantastic. Some teacher pensions are also great.

[@TexasMade903]

I have coworkers who complain about the retirement benefits. I tell them your stupid, not too many employers still offer a pension and 401k(TSP).

[@lenaprice6239]

@@TexasMade903 I am a federal employee and will have a pension when I retire. I currently max out my TSP each year, and max out my Roth IRA, as well. I also contribute to a brokerage account and max out my Health Savings Account too.

[@jojowhite9296]

My wife is a public school teacher in Ohio and their pension plan is crap compared to my FERS retirement.

[@TripSoul10]

Job I have for 3 years provides a pension plan when I plan to retire in about 30 years. It will be over 100K based on projections. In addition, I contribute about 15000 to 16000 towards retirement between 401K plans, Roth IRA, & dividend reinvestments. Currently at 107000 in retirement income.

[@roderick.t]

I’m fortunate enough to have both a 401k and a pension when I retire.

[@HowToRetire]

That's awesome, Roderick! Truly a rarity! 🙌

[@genxx2724]

You earned all of it.

[@seancunn4089]

windfall act takes half of pension petes social security check.