Being an expat pensioner (term I heard often in Thailand) it caught my eye.
I have Army buddies that invested well, have money in the bank, but are careful to spend to not decrease their investments.
Several of us has decent pension incomes from Military, SS, other that our spending is based on those monthly paychecks which does not cut into out investment income.
My biggest mistake IMHO was to agree to an annuity. It was great when it started, but 10 years later there is no inflation adjustment.
That said, I believe the Dems who hate the military will eventually target retired military also receiving SS, charging us with double dipping. I'm probably OK, but new military retires should be watchful.
Basically, if you work for government - you are fully protected with life-long pensions and excellent health care. Government takes care of its own, and will continue to do so.
If you work for the private sector, you are on your own. tough luck
Its incredible how similar to China and Russia the USA is this regard. Probably Russia is less corrupt and less under the control of its Political-crony oligarchs now.
Here’s how we got here.
Senator Howard Metzenbaum (champion of labor) slipped a poison pill in the Tax Reform Act of 1986 changing the rules for Defined Benefit (DB) pension plans in vesting rights from 10 years to 5 years. This change was to take place in 1989. I worked for a company with 20,000 on-site employees (jet engines) in Evendale, Ohio in 1988. The massive layoffs started soon after. This was so easily predicted. Now we have 20,000 illegal invaders crossing the border in a week to take American’s jobs and private company Defined benefit (DB) pension plans have been gutted. Now American workers are being outright replaced.
You don’t think Howard knew what he was doing? Introduced in the Senate as S.3527 Worker Adjustment and Retraining Notification Act of 1988 by Howard Metzenbaum on June 16, 1988. In 2001, there were about 2,000 mass layoffs and plant closures that were subject to WARN advance notice requirements and that affected about 660,000 employees.
88 percent of public employees are covered by a defined benefit pension plan.
https://en.wikipedia.org/wiki/Defined_benefit_pension_plan
https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986
Defined benefit plans are not compatible with hedge funds and Mitt Romney types.
“With defined benefit pensions, the entire burden of saving and investing money for a worker’s retirement falls on the employer, although some DB plans now require employees to contribute some money as well.”
At the large company I worked for toward the end of the 80’s how much a person got every month in retirement funds from their pension was determined by a formula usually based on salary and not years of service. There was a minimum salary point you had to make before you contributed any thing toward your own pension. The last year I was there you had to make around 25,000 dollars before pension funds started to be taken out. I remember you were well into three quarters of the year gone. The obvious intent was to screw most of the worker bees.
I think IBM cheated the employees on pensions as did other companies leaving retirees no money. GM union workers were protected while the white collar had their money stolen.
“My biggest mistake IMHO was to agree to an annuity. “
I just moved money into an annuity for a monthly disbursement. I didn’t know what to do with the money so I spoke with an advisor and he said put it into an annuity until I am 67. (I’m 63 and not yet retired)
What are some other options?
I remember my father telling me when he got out of college in the late 1950’s he went to work for a company. He took the position at a little lower salary because they had a great retirement plan. After working there a few years and asking around he found out that yes they had a great plan but it seems nobody ever made it to retirement. They all seemed to be let go about 5 years before they were eligible. Needless to say, he left the company a year later.
There is a third kind of pension plan ignored by the article. That third kind is a traditional defined contribution plan, not a 401k, and much older than the 401k.
The traditional older defined contribution plan is a managed pension plan from contributions to retirement, but the pension benefit is directly related to only two things (primarily) - the value of the accumlations (contributions and earnings) in the account, and the expected lifetime of the person. Simple math from those two things alone determine the benefit (essemtiallY). But unlike the 401k, it is an account managed by the pension fund, not the employer (per se) and not an account that can be withdrawn entirely and moved somewhere else by the individual.