Something that no one seems to realize about our retirement system (PERS) is that part of our paycheck is required to be put into that pension system, sometimes as much as 10%, and that creates a cash balance that grows each year. Sometimes employers make that contribution for employees, sometimes not. It depends on the collective bargaining agreement, the agency, etc.

When I decided to take my pension, I had that cash balance, which I could have taken as a lump sum payout or as an annuity, with various options. I chose to annuitize.

Yes my brother did put his life on the line, so to speak, on various patrol assignments when in his 20s and early 30s, although he has been behind a desk and/or working the county jail or at their downtown HQ for the seemingly unlimited OT since becoming a sergeant in his early-mid 30s.

I do not begrudge my brother, or any other of my above-mentioned family members their tax-payer paid pensions. At least they have no excuse to try and borrow money from me!

In fact, my brother’s son (my 21 year old nephew) just dropped out of college (UC Riverside) with only a year to go because he was able to get into the police academy and a starting salary over $50K. That’s way better than he could do with college degree these days.

My point was simply that the best retirement planning advice you can give to a person is to get a government job. A nicely spiked pension starting in your mid 50s beats scrimping and saving any day.

Please read my comment again. I refer to my brother the cop and my wife the teacher. Not me.

What did you think I meant when I wrote “why work in the private sector? Let the private sector work for you!” Too subtle, I guess ….

I am self-employed. Same profession as the host of this blog (by coincidence). I know damn well who pays for it. Yes, the public sector is wildly out of control, and the private sector let it happen. Public union money elects government officials who “negotiate” contracts with public sector unions. What a charade.

Anyway, it may well be that the baby boomer public employees have pigged out too long and hard at the trough, and that their children and grandchildren will no longer have the retire-on-a-spiked-full-salary pension-in-your-50s retirement planning option available to them as new government employees. Not to worry, though, there’s always the stress disability route.

And now that most of the 50 states are in deep financial decline (because the private sector is going broke), guess who’s on the top of the list to get furloughed, laid off, pay raises cut, benefits slashed, OT eliminated, health and pensions either curtailed, cut back or cut off completely?

The police, fire department, teachers and many others connected to public sector employment (medical & hospital workers, nurses etc. etc.)

Good move, bro. You learned how to ‘work the system’. Soon, at age 50+ you’re gonna learn a new system. It’s called: work. Ha ha. Good luck!

I agree with David about government jobs and pensions. Early Boomers that worked for the federal government will do well — CSRS pays up to 80% of their salary after 40 years. Later Boomers will have pensions more like private industry — FERS (changed over in 1983) pays about half of the benefits that CSRS does, and has an inflation adjustment that is lower than full inflation. However, the FERS employees are also required to pay in to Social Security, so they will have that — more or less like a person on a private pension. Federal workers are also not allowed to “double dip” — drawing a full pension plus continuing to work in a Federal job. Any prior pension is offset against their new salary.

However, a lot of the state and local governments still have high pension pay-outs — accruing as much as 4% or 5% of final salary for each year of service. And they have retirement ages as low as 50 or lower. Where the federal government caps it at percentage of income, quite a few state and local employees can exceed their actual salaries by continuing to accrue 4% or 5% per year beyond the official retirement age of 50 or so. Double dipping is also allowed, so in states like New York and California there are people drawing retirements that exceed their original full-time salary, plus working at the same or another government job for a full salary.

The other big advantage of government jobs is that they tend to be a lot more stable than private industry is now. It is possible to build a good vested interest of several decades in retirement benefits with one employer. Even prior to a lot of companies cutting their pensions, many employees did not build much vested interest in any one company’s retirement plan because the average worker changed jobs every three to five years.

What I take away from Ron’s story is that best possible retirement planning most folks can do for themselves is to get a government job while you are still in your 20s or early 30s.

My brother the Los Angeles County Sheriff’s Deputy will “retire” at age 50 with a greater annual pension income than his salary was throughout most his career using well known technique of a promotion for his last year on the job, plus lots of OT, and unused sick pay cashed out that last year. I don’t think he’s ever saved a nickel, but he knew all along he would not have to. That is tremendous piece of mind. His retirement planning consists of the usual brown nosing of the higher command in order to get that final year on the job promotion (a position that will be vacated by a newly retired officer who was in the job for a year or so), plus saving up all possible sick days throughout the last ten years.

While my wife the teacher does not nearly as good a pension deal as my brother the cop, she’s had lots of time off throughout the years, a great job to have for a mom. She is now 51, and since we can easily live off my income, we fully fund her 457 and 403(b) plans ($45K pre-tax for 2010 at her age). Plus, she will get a pension for the rest of her life starting as early as age 55, although for her to “max out” her benefit, she has to wait until age 60 (so sad, too bad for her).

We have a neighbor who retired at close to full pay (he says) from working the JR College system. I’m not sure if he was in administration or teaching, but either way he was done in his early 50s.

Why work in the private sector? Let the private sector work for you!

Without this info, sorry, but your story is nothing more than empty words. You could be living in a cardboard box for all we’d know.