I work for one of the few private companies that offer a pension and I have 19 years in it. Over the years I slowly worked up to maxing my 401k as well. This will be the first year I hit the max employee contribution limit.
I don't even consider the pension in my retirement plans. If its there when I retire, then it will be free and clear play around money.
It is state specific. Some state pension employees participate fully in social security. Other states do not participate at all.
Pensioner wrote:
Can you briefly explain WEP and GPO? I have not heard of those. Thanks in advance.
At My last government job, different employer but same pension plan, we did not pay into SS. My current job we do. Honestly wish I could opt out and invest the ~8-9% into my 457b.
It is 6.2. The 7.15 includes medicare.
Usually states where you participate in as have lower pension benefits. So told you weren't putting that I to as it would be funding a more generous pension plan.
Learn you something wrote:
It is 6.2. The 7.15 includes medicare.
Usually states where you participate in as have lower pension benefits. So told you weren't putting that I to as it would be funding a more generous pension plan.
Damn autocorrect. That is pretty unreadable. If you weren't putting that money into social security it would likely be going to the pension fund to generate higher returns and a more generous benefit.
Don't know Dave Ramsey wrote:
It's pretty easy for companies to drop pensions and leave retired folks cashless. It does happen. I recall several instances of companies going bankrupt and doing this. Thankfully those impacted can get jobs as greeters at bog box stores.
Even the military is starting to roll back its pension plan in favor of a blended system. For those enlisting Jan 2018 and after: 50% pension after 20yrs reduced to 40% (which you start drawing immediately) plus a defined contribution plan (TSP) with matching up to 5% and monthly contribution maxed at 10% which you can start drawing at 59.5.......I had the opportunity to switch....I didn't. The blended system is great for those who don't plan to do 20 or who get kicked out before 20.
Alan
Pensioner wrote:
Gruntz wrote:
Correct. Government pensioners can receive SS if they have enough quarters, but the amount will be drastically reduced thanks to WEP and/or GPO.
Can you briefly explain WEP and GPO? I have not heard of those. Thanks in advance.
Windfall Elimination Provision and Government Pension Offset. Briefly, these reduce the amount of SS one can receive if they are also receiving a government pension.
Everyday Millionaire wrote:
Why worry about Ramsey? wrote:
Ramsey cannot touch a pension. Ramsey can have a person transfer IRA to his firm so Ramsey can manage the assets. Ramsey can ask a person to roll over 401-k to a rollover IRA so Ramsey can manage the money. Ramsey is not teaching finance or accounting (he either majored in accounting or finance in college). A college professor may not have skin in the game. Ramsey wants to manage your money and he cannot touch a pension. Ramsey's advice is not neutral. He has an agenda. End of thread.
Except Dave isn’t making any money as a financial manager. I’m sure he makes money on referrals (I’ve heard it’s $80 a lead) on financial advisors, which could be substantial given the size of his audience, but I would guess the majority of his income is from book sales (which he’s able to sell to his captive radio audience).
He has philosophical capitalistic/libertarian ideal, which by definition are pretty anti-labor/anti-working class. Anything the government or your employer provides to you is evil. The fact that virtually every private employer has either gotten away or is trying to get away from offering pensions should tell you something.
How much is he charging to be part of his financial network? Dave's get out of debt advice works for some people. His advivce on investing is pretty bad. His advisor network has predatory fees (paying 1%+/year to manage money is robbery) and the funds he suggest are also high fees. If you really don't want to do anything, pick a company like betterment which isn't horrible (they might not be great but avoiding the people like Dave Ramsey that will rape your portfolio is enough to be good).
Gruntz wrote:
Windfall Elimination Provision and Government Pension Offset. Briefly, these reduce the amount of SS one can receive if they are also receiving a government pension.
ONLY if that pension was for government service that did not participate in the social security system.
learn you something wrote:
Gruntz wrote:
Windfall Elimination Provision and Government Pension Offset. Briefly, these reduce the amount of SS one can receive if they are also receiving a government pension.
ONLY if that pension was for government service that did not participate in the social security system.
Thus the words, “receiving a government pension.”
Gruntz wrote:
learn you something wrote:
ONLY if that pension was for government service that did not participate in the social security system.
Thus the words, “receiving a government pension.”
Many civil servants participate fully in SSA while earning a government pension. They are eligible for full Social Security benefits.
Learn you something wrote:
Gruntz wrote:
Thus the words, “receiving a government pension.”
Many civil servants participate fully in SSA while earning a government pension. They are eligible for full Social Security benefits.
Agreed. The WEP applies to those pension is based on a job that did not contribute to SS. The GPO affects spousal benefits.
Apologies for the confusion.
Everyday Millionaire wrote:
We can debate about whether you’re better off contributing to a 401k for 20 years or having a pension; however, most of the time when it comes up on his show, it’s someone retiring and wanting to know if they should take the lump sum or a monthly payout. He has never once recommended a monthly payout. He advises to roll it into an IRA and invest it in good growth stock mutual funds. This is ridiculous. When you’re 67 and depending on the money to live on (and no longer contributing), you can not expect a 12% return in the market. If you don’t need the money and want to pass it onto your kids, that’s fine (though a traditional IRA is a terrible way to inherit money); for everyone else, the lifetime income stream is a better deal.
The reason he recommends the lump sum, if available, is because he's hedging against untimely death. If you opt for monthly benefits, in most all cases they cease when you decease. If one dies after just one year of retirement, the pension payout is pennies on the dollar compared to the lump sum that would have been controlled by the worker and passed on
He doesn't want his employees to demand a pension.
I pay SS taxes currently. So sounds like the GPO won't affect me and my wife. I agree with the poster above, we are not banking solely on my pension and or SS. My wife has a 403b and myself a 457b that we are slowly working on maxing out over the long term. Anything else is extra, well, probably healthcare costs.
I think Dave is opposed to recommending anything that isn't readily available to the majority of the population and to things that have less flexibility.
You're entire mindset about the "working man" is why people like you fail in life. You want others to pay for your life instead of taking responsibility for your own life. Pathetic.
Javman wrote:
You're entire mindset about the "working man" is why people like you fail in life. You want others to pay for your life instead of taking responsibility for your own life. Pathetic.
You must have me mistaken for someone else. I have a six figure income, a model wife, a pension, a maxed out 403b, and a maxed out Roth IRA. I’m a firm believe in the partial buckets theory of retirement. I’ll get a little money from SS, a little money from a pension or two, a lot of money from retirement accounts, and probably a little money from working forever because I’m in a career that I love and will be able to do as often as I want until I’m dead.
I just think Dave Ramsey is way off on much of his advice. Example: pay off your mortgage as soon as possible (ignoring higher returns that you could be getting in the market), but then cash out your pension and take social security as soon as possible and invest everything in the market so you can get bigger returns. It just makes no sense.