I retired 3 yrs ago at 58 with a $2500 month pension. Started collecting $16k per year survivor social security at 60. I will collect my SS at 70, est $3k per month. Modest 401k, house is paid for cars are paid for. The key to a successful retirement? Be debt free.
@ScottUnderwood-q7q
Ай бұрын
Thanks for the video!! My wife and I worked very hard for many years (military, GS, and teacher) and will have 3 pensions and 100% VA disability. With my social security at 62 we will earn between 13-14K per month. My wife will wait to 67 to draw her SS and we will not touch our 401k and TSP until we hit the age requirement. Government service doesn’t pay great in the early years, but makes for a great retirement.
@Erginartesia
Ай бұрын
@@ScottUnderwood-q7q I have the same strategy.. don’t touch the 401k until forced by RMDs. Meanwhile, while it lasts, I’m holding off on paying off the mortgage, as I get more gain by keeping $ in high interest savings. Once RMDs kick in, that is when I go into high gear paying down the mortgage.
@StressLessFinancial
28 күн бұрын
Your hard work and strategic planning have certainly paid off! It's impressive how you’ve set up a solid financial foundation for retirement. How are you planning to manage and optimize these multiple income streams to ensure long-term financial stability?
@genxx2724
27 күн бұрын
@@Erginartesia But aren’t you going to pay a huge amount of tax on those RMDs?
@frankanddanasnyder3272
13 күн бұрын
Took my pension as a lump sum and reinvested it myself. Making a lot more money that what the annuity payout!
@DLTJR1959
Ай бұрын
We retired 12/31/22 with a state pension. With no debt, we have a stress free retirement. It is a blessing that we do not take for granted.
@terryneal5569
Ай бұрын
I love brains and beauty.
@user-xq7qy1tj4b
Ай бұрын
Some pension plans, like mine, offer the option to take a lump sum. I opted to take the lump sum, rolled over into an IRA, which I invested in S&P 500 and high dividend stock ETFs. This has worked out well for me when applying a 4% rule.
@StressLessFinancial
28 күн бұрын
Taking a lump sum and investing it wisely can be a strong strategy! It sounds like you’ve found a good balance with the S&P 500 and dividend ETFs. How do you plan to adjust your strategy as you approach retirement, and are there other investment considerations you're exploring?
@Moneymalzy
11 күн бұрын
I have a pension. I put 7 percent and they put 7 percent. Every year I get 1.75 percent towards retirement. Meaning if I made a 100k a year. And I worked for 20 years. That's 35 thousand. But i have a 457b. And I max it out. And an HSA plan. I max that out. But the company puts 246 in a month. So that's free money invested. So I invest 31k a year. Just started a year and half ago. But I love these videos. I also changed from a target fund to vanguard stock. I wanted low fees. The great part is I invested my HSA. Only 3 people at work out of 100 have an HSA. It's only 6 grand after a year. But it will add up. I'll play the slow game
@kennedyrice1517
Ай бұрын
Very informative video. For me, I retired from the military back in 2001 and then started working for the county government which will be my 2nd pension when I plan to retire from it next year. Those plus SSI and other investments and I should be good. Not married and no debt except for my home. I'm thankful.
@nobuhlerodrigocath2755
23 күн бұрын
Staying abreast of the latest trends and strategies is crucial for traders to stay ahead and make well-informed decisions. Beginners in trading and investing must recognize that success in these fields demands technical analysis, emotional maturity, and self-discipline. Thanks to Monica Lisa Payne insights, daily trade signals, and my dedication to learning, I've been increasing my daily earnings. Kudos to the journey ahead!
@nobuhlerodrigocath2755
23 күн бұрын
erNameIs Monica Lisa Payne, cant divulge much. Most likely, the internet should have her basic info, you can research if you like
@bradfordemily2577
23 күн бұрын
I just looked up this person out of curiosity, surprisingly she seems really proficient, I thought this was just some overrated BS, I appreciate this.
@aarsethdiane853
23 күн бұрын
It is really refreshing to see a comment about Monica Lisa Payne.I have worked with her also for months now, reached out after reading more about her on the internet. she simplifies matters, whether it's a market surge or drop; her approach consistently keeps you ahead of the trend, She's a guru i'll say
@lucybentzcrystal4440
23 күн бұрын
niceTo see this here, Monica Lisa Payne's understanding of market indicators is impressive. She knows exactly when to enter and exit trades for maximum profit. her siignals are top notch
@bruceclairelopschutz9938
23 күн бұрын
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
@kevo212
Ай бұрын
these are some great points, I’m still about 10 years away from early retirement but I have a solid 401k and will be getting about $105k per year from a defined pension plan. It’s definitely been super helpful to have both and not as much pressure to save. Planning to move somewhere with lower cost of living and live a good life.
@StressLessFinancial
28 күн бұрын
Having a solid 401k and a defined pension plan is a great combination for your future! Moving to a lower cost of living area can be a smart move. What are some of the key factors you're considering in choosing your new location, and how are you preparing for this transition?
@kevo212
27 күн бұрын
@@StressLessFinancial I'm looking at finding a maintenance free property and downsize, something with amenities like a pool or hot tub. I plan to travel in retirement and I don't want to maintain anything or worry about cleaning a larger home. I'm also looking at states that don't tax pensions.
@12-HourTravels
Ай бұрын
I’m a 28 year UAW worker with a pension. I also take advantage of the 401K with other investments as well. I’ve been patiently waiting for this video. Thank you, Great job.
@ErinTalksMoney
Ай бұрын
Thanks for watching 😊
@Erginartesia
Ай бұрын
Yes .. retired with government pension. It is working just like the “3 legged stool” system, as it was intended to do. I absolutely agree that it reduces stress. I use the 401k fund for non-regular expenses, and to fund my own long-term care. I STRONGLY recommend that having a pension, you should still put 10% to 15% into your 401k. Having that funds bucket is equally as important to having confidence in retirement.
@djcoolrule
Ай бұрын
Well I am fortunate. I retired from the military after 24 years, getting VA disability, and working for the DoD to close out another pension and that will will be small but useful. I have been maxing my contributions to my TSP and plan on retiring using the MRA +10. Will pull SS at 62 and enjoy the rest of my life with my wife. My father passed at 61 after serving in the military for 33 years, not going to happen to me. The only guarantees in life are death and taxes. Great content and I look forward to your next video.
@ghggp1
Ай бұрын
I am 70, retired after 30 years at a major automotive company. I then worked at a small marketing agency where they offered a buyout. My home is paid off as well as my used car. No credit card debit! I can live comfortably with my pension and social security benefits. I feel very blessed to be able to pay for any repairs on my home. Having an IRA gives additional peace of mind. Thank you for making this video! Exceptionally well done and informative.
@StressLessFinancial
28 күн бұрын
Your financial situation sounds truly impressive-being debt-free and having a solid retirement plan is a great place to be! How do you plan to manage and utilize your IRA going forward, and are there any additional goals you’re focusing on in retirement?
@larriveeman
Ай бұрын
I have a federal pension with survivor benefit at 50% at 71k, no debt, wife also has a smaller fed pension plus both have SS, not touching tsp/ ira other then Roth conversions…40 years as a fed + military
@BlueLineGroovy
23 күн бұрын
I’m approaching this pension subject with a lot of apprehension. I’ve earned a defined pension but haven’t started it yet. .. trying to get as much knowledge as I can. Thank you for this video. You have made it a little clearer for me.
@cashflow68
Ай бұрын
Excellent video. I fully retired at 55 with a 2K monthly pension & wife's SS at 63. No debt but using my dividends to supplement my retirement. I have another year before I apply for my max SS at 70. Thank you for the informative video and congratulations on your upcoming 70k. You've come a long way.
@30-Year_Accountant
Ай бұрын
Sounds like you're in an excellent financial position in your retirement. I recently retired at 56 with a $4,500 monthly pension and a healthy traditional ira a third of which I'll slowly convert to a roth ira by 63. Be well and enjoy your retirement.
@cashflow68
Ай бұрын
@@30-Year_Accountant thank you. Take care of your health as well
@hogroamer260
Ай бұрын
@@30-Year_AccountantOne thing I underestimated was how much the traditional IRA recovered in a year, after converting!
@mikebridges20
Ай бұрын
Erin, I retired in 2013 early at 55 with a traditional, non-adjusting pension. Full retirement was at age 60, so I took about a 40% cut in monthly benefit, but that early retirement date allowed us to return home while our parents were still alive. Early in our careers my wife and I decided that we were going to assume pensions weren't going to be around, nor social security (this is in the early 80s, so that mind set is nothing new). Investing in our company's 401k over 30 years, plus pension and SS, we're in good shape.
@darinherrick9224
Ай бұрын
this video didn't really apply to me but it's so good I'm subscribing.
@ErinTalksMoney
Ай бұрын
Thanks for subbing! Welcome to the channel 😊
@PSUhockeygirl
Ай бұрын
I once saw pensions referred to as the BONDS in considerations about the investing breakdown/diversification in retirement and that was a good way for me to look at mine.
@garym81
Ай бұрын
My wife and I are both military retirees, each with over 20 years active duty. We also were lucky enough to use the GI Bill to obtain college degrees that are in high demand. In our area, the federal government is the employer who pays both pays the highest wages and has the most call for our skills, my wife has a BS in Social Psychology with a MA in Security Management, I have a BS in Computer Information Systems with a MS in Information Management/Information Technology. My wife retired early from her GS position, 16 years of service at 58 years old. I am about to retire with 20 years GS at 62 years old. That gives us four pensions, 2 military, 2 GS. Our total annual pension income will be ~$100k before taxes and deductions. Using the IRS's calculator, we should earn about another $60k (combined) at 67 years. Yes, we would earn more at 70, but we will see how our health holds up at that time. Adding to all of that, we have about $600k in TSP. Our situation had a lot to do with economic conditions when we were young, luck in being able to stay in the service when it was undergoing drastic cuts, and planning on choosing education that was in demand.
@archoplites
Ай бұрын
Thanks for addressing how a pension fits in with how we (folks with pensions) now save/plan for retirement. And yes, I'm one in the minority now with a pension as my primary source of retirement income. Although I know what my state defined benefit pension will provide me once I retire, It's been difficult figuring out how much my pension is "worth" and how to use this in such calculations such as my net worth. Another valuable equation to use to figure out what a pension is worth is described in a 2018 paper by Blanchett and Finke - your pension viewers should find this helpful too.
@lonnieevans4127
Ай бұрын
Traditional military "retirement" is really a pension and there's a lack of understanding how that folds into financial planning because there aren't many under-50 year olds in the civilian world that are already collecting a monthly pension. This helps. Thanks!
@lonnieevans4127
Ай бұрын
...but military pensions are paid out monthly like an annuity (no "lump sum" option) and indexed to a government approved cost of living allowance amount annually.
@shawnbrennan7526
Ай бұрын
Absolutely agree that most financial planners’ models and tools do not proper account for the change in risk posture if you have a military pension. (I specifically left USAA because they SHOULD have been pros at that, but just bought an off-the-shelf tool from some other brokerage.) For most models, About all you can do is just increase your risk tolerance number a bit higher than you otherwise would be comfortable with.
@stevennevins6643
Ай бұрын
@@lonnieevans4127 True, but military members can also contribute to the TSP to build a tax-deferred nest egg.
@stevennevins6643
Ай бұрын
Way back in 1981, with three active duty years under my belt, I made the decision to stay 20 years to retire at half-pay. Well, that turned into retiring as a full colonel with my pension based on 34 years of service. (85% of base pay). After subtracting $720 for the survivor benefit, the gross amount is currently $11,200 monthly. I went on to a lucrative 10-year second career, but the pension is the cornerstone of my financial security.
@flamingjune27
Ай бұрын
I’m in the sergeant’s major academy now and this was supposed to be a one enlistment to “see how it goes” 😆. Funny how things work out. I started saving late but I’m planning on shoveling as much into retirement when I start a civilian career after military retirement. I’m currently maxing Roth IRAs for my wife and I in addition to a bit in traditional TSP.
@robloxvids2233
Ай бұрын
Thank you SO much for this video. As a math nerd who took graduate level accounting, so many financial people mis-speak about valuing pensions. They just say "derp, a 30k pension is like having 750k nest egg at 4% SWR!" Which is wildly inaccurate. The value of your pension does not know or care what your SWR is. I keep track of NPV of my wife's teacher retirement pension and my own S.S., since both are earned. I have to further discount them due to payments not starting until the future. But my wife's pension is the largest asset we have - it just surpassed our home equity last month, and our home is almost paid off. I use actuarial tables to know how many expected payments I will have. There're really no more accurate data to use.
@Erginartesia
Ай бұрын
@@robloxvids2233 i don’t get it .. what’s a SWR and how do you assess your pension’s value? Are you saying each $10k of pension is worth $250k in 401k? Maybe Erin can explain this on another video.
@davidblack6413
Ай бұрын
Your analysis and presentation just keeps getting better, Erin. The point about calculating the PV of your pension as part of net worth was revealing, just as that formula was a little scary to those, like myself, who are not that gifted with numbers! Having a defined benefit pension as I do, being an educator, has certain benefits outside of being able to rely on a 50k p/a pension (net 3000 monthly) at age 65. It also gives me more room in my own portfolio to be risk-tolerant. I treat the pension as the fixed income portion of my portfolio, and for that reason -- and I know this is not for everyone -- I can then be 100% equity in my ETF and stock portfolio. In that portfolio, especially in the individual stocks I hold, I tend toward blue-chip dividend payers, regarding those dividends as another form of fixed income. This makes more sense with DIY self-directed investors like myself. But as a matter of strategy, the pension is greatly freeing, and allows me to be more aggressive, and hence earn a greater return long term, as I've that pension as a hedge against the volatility I take on with that portfolio profile.
@Brian-nb6fb
22 күн бұрын
You're are right on about the benefit of a pension! So much of the retirement advice on withdrawals and well balanced porfolio's really doesn't apply when you have a pension. Planned my working career around the anticipation of a pension from the Federal government and saved both in TSP and IRA's to the fullest during my working years. Have a solid net worth which I continue to add to almost monthly! (have to live a little 😁) When I am asked my advice for successful retirement, my #1 response is DEBT FREE & Dave Ramsey methodology!
@Noneofyourdambusssiness
Ай бұрын
Pension is a huge +. I retired from the Army in 2010 at 37. I have $36k/yr from that retirement. We paid off our mortgage and have no debt. I've been working for Fed since and will retire at 62 with TSP, FERS pension, a Roth IRA, and some investments. When combined with my wife's 401K and SS for both of us, we expect a total of approx $92-95k per year in retirement. Pensions make a huge difference.
@FIRED13
Ай бұрын
First, thank YOU for your service. Great job on building your foundation
@joe62845
Ай бұрын
I'll have a small pension from working for 20 years at my old part time job. I would still be there, but I had my son and now I need to be home to watch him. Although it's nice to have that pension in the future. I'm more aggressive with my 401k and Roth IRA since those will be my main source of income when I do retire.
@BalancedRetirementPlanning
Ай бұрын
Great explanation of pensions and retirement planning, Erin! Understanding the difference between defined benefit and defined contribution plans is so important for financial security in retirement. The insights on how pensions can ease financial pressures and offer peace of mind are incredibly valuable. Thanks for breaking it down so clearly!
@StressLessFinancial
28 күн бұрын
Absolutely, grasping the difference between defined benefit and defined contribution plans is crucial for a secure retirement. I’m glad the explanation was helpful! What strategies are you considering to maximize the benefits of your retirement plans and ensure long-term financial stability?
@Allegan49010
Ай бұрын
I am so glad that my employer switched from a defined benefit plan to a money purchase plan funded by the employer and managed by the employee!
@nikmac8158
Ай бұрын
Thank you for doing this video. I’m so tired of Finance experts making light of just how a pension takes pressure off saving for retirement. Appreciate you reminding us that if you have one, you can be less aggressive in saving.
@ErinTalksMoney
Ай бұрын
Glad it was helpful!
@dstevens518
Ай бұрын
Great video, thanks as usual. Glad to see the first batch of comments warn that even if you have a pension, there's no guarantee it will pay off fully, or even at all. Plus further warnings that present health is no guarantee you'll live as short or long a life as you'd expect. Best plan is to save more, longer, for the worst case scenario, imo. Just look at the last four years. We've gone from low interest rates to high, plus an inflation scare, all due to a global pandemic and Ukraine war, and experts believe we'll have more pandemics, all while BRICS threatens the global economic superiority of the West, and futurists worry about AI run amok. Your future is a LOT more unpredictable than you think. Save up, and don't make your home the majority of your nest egg.
@ericq4175
Ай бұрын
Im retired with a pension plus guaranteed cola every year that I live on. The best thing I ever did was to not include my future pension with my retirement calculations. I invested in my 457 and after tax brokerage account even though I knew I had a pension. My 457/brokerage accounts have grown a lot over the years and now Im free to do the things I want to do, like take vacations, helping adult kids, etc. If I didnt save into my 457, brokerage and had to live only on my pension I would be ok but I wouldn't have enough for vacations, home repairs, helping out the kids. Looking back now Im glad I saved. I didn't want just have enough to survive I wanted to enjoy my retirement.
@joedessenberger2048
Ай бұрын
I have done the same. Pension was a nice guarantee, but I wanted to plan as though there would be no pension. Glad I did because now I have flexibility with what I want to do in the future.
@tdog8507
Ай бұрын
Government job of course
@APICSKH
Ай бұрын
@@tdog8507exactly
@paulseidel5819
Ай бұрын
I didn't fully appreciate my pensions until I started receiving this year. Military reserve pension plus tricare has huge value, and the pension from a government job, I have more assets than I need need, so I am figuring out how to take fancy vacations, do estate planning , and help others.
@trackguy4038
Ай бұрын
Can you do a video on retirement pensions for Federal employees and those in the Military?
@karlheck4121
Ай бұрын
As well as state and local government employees. That would be interesting.
@cablebandit
Ай бұрын
@@karlheck4121 Just out of curiosity, how would they be any different?
@coffhaulic4564
Ай бұрын
@@cablebandit I work for local/regional government and they don't participate in Social Security like Federal Employees.
@larriveeman
Ай бұрын
i retired from the feds after 40 years, it pretty easy to figure out, anyone hired after 1983 is on FERS, the calculation is..years of service x either 1.1% ( if one is 62 and has at least 20 years of service) or the rest at 1.0% x high 3 year salary... example high 3 year salary 100K x 30 years of service x 1.0% ( under age 62) 0r high 3 year salary 100K x 30 years of service x 1.1% ( age 62 or older)
@hogroamer260
Ай бұрын
Impressive video Erin! I don't think many working people understand the guaranteed income/peace of mind relationship. I'm amazed it isn't mentioned more often in the "when to take Social Security" videos. I'm a big advocate of delaying Social Security, if you can afford to and have longevity in your genes. I had a pension but took the lump sum because I retired early and needed more up front than the pension paid. After all debt was paid off, I need much less and am delaying Social Security for that peace of mind factor.
@adamjames3245
Ай бұрын
Federal employee. I will have my full pension at age 57 and TSP (doing max match, of course!). I get to retire early and double dip! 🤑 Love your videos.
@ErinTalksMoney
Ай бұрын
I love that you have a double pension, that's great! Thanks so much for watching! 😊
@mapsandglobespro
Ай бұрын
I retired from the service in 1998 but didn't receive a retirement check until my 60th birthday. I was in both the Army and the Army National .Guard I'm so glad I stayed in the Guard because now my Medicare supplement is TriCare for Life. Then in 2013, I retired from a telecommunications cooperative with just over 31 years. I had a defined benefit and defined contribution plans. Then last year I retired from our local City government job as part of the city services section of the small town where I reside. There I spent nearly 6 years but long enough for a small defined benefit plan. I'm nearly 66 but haven't started SS yet. I'm still working but doing what I love to do as a handyman. Great video content. It gives people a lot of thought as to what needs to be done for a comfortable retirement. Thank you Erin.
@kay203
Ай бұрын
My wife has a pension from her hospital employment... it's awesome. Some of her retiree friends receive near ~3k in SS and ~4k in pension... and set for money pretty much. Hope it becomes same for her
@ErinTalksMoney
Ай бұрын
That's wonderful!
@cvbrotha11
Ай бұрын
Hi Erin great post. I'm served 26 years in the military and draw a pension for the remainder of my life. All my pensions combined with social security when I reach 62 will cover all my expenses. I invest heavily though like I will receive nothing so I definitely have to take a look at this.
@eem3iii
Ай бұрын
I’m 60 on a State pension retired for 2 years. It pays over 65% of pre-retirement income and has 3% compounding COLA. I selected a 75% survivor benefit for my wife. I’ll receive a small pension from another company at 65 and plan to start taking Social Security around that time. All of that together will be more than I was making when working. Taxable Brokerage account will be used to supplement income for needs, fun, travel etc and plan on leaving Roth IRA to wife and adult children.
@conniechapin9278
21 күн бұрын
A couple things to consider about pensions. Like you to be at that job at least 5 years to get vested, or you get nothing. You have to stay at the same company or union for a very long time (without going into management) to get the larger amounts, or starting pay outs earlier.
@Dave_D.
Ай бұрын
I have a pension, but I believe it is an atypical type. The company contributes a % of my income to it each yr. The sum of the account is mine. When I retire, I can take it as a lump sum or if I want payments, they annuitize it. There is no set dollar amount of income, it's based on how much you have accrued in the account. I had always thought I would take the lump sum because surely I can do better w/ the $ than they can....until I started looking at the math. If I take the payments, it would provide me w/ nearly 100% of the bare minimum amount I need to live, with just 10% of my entire portfolio. So, while I still believe I COULD do better w/ the lump sum, the income security that would be provided by the annuity, I believe, are worth it. Now, what happens if my employer (or the insurance company administering the annuity) go bankrupt? I'm not sure, but there are certainly risks w/ either decision.
@garym81
Ай бұрын
You have to consider taxes too. If you take a lump sum retirement, that's all taxed in the year you take it probably pushing you into the highest tax bracket where Uncle Sam will take a huge bite out of your potential payment.
@Dave_D.
Ай бұрын
@@garym81 I believe, though I am not certain, that I could roll that lump sum into an IRA.
@Erginartesia
Ай бұрын
Calculate the lump sum value over the next ?? Years. Decide how important it is to you to have a legacy in your portfolio… and then calculate how much of the lump sum you will need to pull out over the next ?? Years. When you are all done with that, think about how much you enjoy always worrying about and being your own financial advisor .. if you hate that, then you will want to add !% per year to your annual budget to pay a CFP to do it for you. Finally, decide how likely it is for your employer to still have a pension fund in ?? Years. It all sounds like just more stress. Which stress can you withstand more?
@theladder06
28 күн бұрын
Thanks for the great information. I am fortunate enough to have a great pension from a municipal career when I retire. But I also started an IRA years ago along with contributing 10% to my deferred compensation plan at work. And she will receive 50% of my pension should I pass first. I had my wife start an IRA years ago as well and she adds to a 403b with 4% matching contribution by her employer. Hopefully my wife and I will be sitting pretty when we retire and can share with our kids and grandkids. Always force yourself to save extra for retirement …because you never know. Thanks again 😊
@curtissouth916
Ай бұрын
As we discussed in our video together, I am a retired Marine and current federal employee so I am looking at two pensions by the time I retire at 55 (currently 44). Plus I have VA disability and Social Security (hopefully). I still cant help but try and max out my TSP (401Kish) each year and add more to a taxable brokerage account. My goal is to have enough invested on my own to live a comfortable life in retirements without needing the pensions and other incomes. So far I think I am on track. With no kids, a wife who is 10 years younger than me and working, I have no need to build up generational wealth. I need to start living more in the now. My future is solid.
@youarehere1251
Ай бұрын
I would go for 100% Roth TSP if I were you.
@rayzerot
Ай бұрын
Holy guacamole. Military pension, VA disability, Federal employee pension, and social security? Then 401k-ish on top? I'm doing something wrong with my life lol Actually I've already done the prep to change to a union company next year so I'll have a pension even though my IRA, 401K, brokerage, and Wife's ABLE account will more than support us on their own during retirement. The pension is just sprinklers and a cherry on top
@curtissouth916
Ай бұрын
@@youarehere1251 I am 100% C for now.
@curtissouth916
Ай бұрын
@@youarehere1251 when in the Marine Corps there was not a Roth option in TSP so all that money was Traditional. When I joined Federal I opened a Roth IRA and was contributing to both the Roth IRA and Traditional TSP. Now I am over the income limit to contribute to Roth IRA, so I now contribute all to Roth TSP, 100% C fund.
@curtissouth916
Ай бұрын
@@rayzerot sounds to me like you will be just fine. Sometimes I forget about the pensions and do my retirement planning solely based on how much I expect to have invested.
@kinglucas9922
Ай бұрын
Hopefully, my pension +457b + roth Ira will be enough because I started late in my career. I'm also trying to pay off my mortgage before retirement.
@bradleygraves5915
Ай бұрын
You and me both brother. I am fast tracking my mortgage to get it gone. After that, everything else gets easier (I hope).
@leehaskins307
Ай бұрын
I’m 62 very close to retiring… been with the same company since I graduated in 1985…. I am grandfatherd into the pension and will get 65% of my current income as a pension…. I think I pretty rare… between pension and social security at age 62 it covers all my espenses and dont have to touch my portfolio other then things like unexpected expenses or vehiccle purchases...
@Noremac2310
Ай бұрын
where do you work?
@leehaskins307
Ай бұрын
@@Noremac2310 A long standing big software company...
@Zeldasmojo
Ай бұрын
At 73 you will be required to pull out a minimum distribution from your 401k. Be aware that this could affect your social security and Medicare …. Just something to look into
@BlueLineGroovy
23 күн бұрын
@@ZeldasmojoI don’t understand .. required withdrawals don’t change SS amounts, do they ?
@tmwei396
Ай бұрын
Great video, I've been waiting for one that calculates the value of a pension. I'm so fortunate to have a job that provides one and by the time I'm ready to retire my annual payout is expected to be around 44% of average of my 3 highest pay years.
@desiv1170
Ай бұрын
Another thing to consider is the emergency fund amount calculation. You definitely need one for emergencies like auto/appliance death, etc... But a lot of the calculations say you need to be able to cover up to 2 years (or more) of your expenses in the event of a market downturn. But if some/most/all of your expenses will be covered by a pension (and possible social security), then you'd only need to have enough to cover the amount you would need to pull out of your retirement, which could be much less... That comes in handy when working out how much you pay into your emergency fund compared to how much you pay to invest. It goes back to your "you might be able to be more aggressive" concept. Not just more choosing a more aggressive investment plan, but also how much you choose to invest... Again, not saying you don't need any emergency fund, you do. Just that it might not need to be quite as large as some will suggest. As someone who has a defined benefit pension (but just barely; people who were hired just a few months after me got the "new" plan, which is not a defined benefit pension), it's something I'm interested in. Thanx for the vid...
@Bartonhockey08
Ай бұрын
I’m 34 with a company with a pension; I’m about to hit my 11th year and vested at the 5th year. My salary has grown over the 11 years and rockin over $100k+. I’m still maxing my 401k with match. 🤙🏻
@Erginartesia
Ай бұрын
@@Bartonhockey08 congrats on hitting $100k! I think that is an even bigger milestone than the $1million milestone (well .. maybe just as big lol)
@BARUCHIAN99
24 күн бұрын
My jobs have both DB and DC plans🎉
@cobia224...
25 күн бұрын
I have retired once as a LEO. I will retire again in 4.5 years at age 63 not LEO this time.. I currently draw on a Pension and Drop account. My pay was not stellar but retirement is where all my hard work and bad things I dealt with as a street cop pay off... Between 2 pensions and 2 DROP accounts and modest 457, my retirement will be over 100K a year.. I am blessed. Some credit card debt but nothing horrible, I am currently saving to have it paid off in 4 years..
@dawightg9787
Ай бұрын
Great Video on pensions, Thank you..
@ErinTalksMoney
Ай бұрын
Thanks you watching
@mich311em
Ай бұрын
I'm a municipal employee, 26 years. So grateful to have a pension for my future and I still save in my 457, HSA, and our roth IRAs. But having the majority of our future needs in pension is a great feeling. And my husband is just one month older than me so I will choose the 100% survivor option and he would be covered. It doesn't make a huge difference in the monthly payment I will receive.
@beansqwerty
Ай бұрын
I am also local government employee. I'm coming up on my 30th year and now looking at retirement options. I have invested heavily in my 457, and my pension system allows you to roll a 1 time lump sum distribution (3X annual salary) into an IRA at retirement (Its an option and does lower your monthly distribution). I also noticed that 100% survivor options didn't change the monthly distribution by much. What I have become aware of is the Windfall Elimination Provision. We don't pay SS and I don't have the minimum number of years required in the private sector to not be subject to the provision. As @ErinTalksMoney was showing combining pension + SS could allow you to meet your financial goals, I wonder how many other pensions don't pay SS and subject to WEP that greatly reduces the amount of SS you will receive.
@wmb9419
Ай бұрын
So working for the Commonwealth of Ma, I have contributed to my pension at a rate of 8% for 38 years. I will likely max out my benefits which feels good, and in part, is exactly why I worked for the government. I never got rich, but I had benefits. Now the decision is whether or not to provide for wife who is a few years younger then me. That formula for calculating the dollar value of the pension was interesting. The thing I worry about though is the effects of inflation on my pension and frankly, the ability to still live and have fun. You need to have discretionary cash for that and my pension is good, we have significant savings but the closer I get, the more I want to keep working and keep saving. The other thing I would be interested in, and this is just in order to minimize taxes is what you think of buying a long term municipal bond. I am considering putting aside a million dollars into a MA municipal bond to avoid both state and federal taxes. I am looking for something paying between 4 and 6 percent if I can find it. That should generate sufficient income to live off of, and would be tax free. Any thoughts or downsides you can think of?
@Erginartesia
Ай бұрын
@@wmb9419 remember that the municipal tax free bond will still be included as income for Medicare B.
@patrickclark9156
13 күн бұрын
The muni entity goes BK and there goes $1M. Put eggs in many baskets (diversify your investments to spread risk).
@mikelarson5333
Ай бұрын
Unfortunately I was unable to retire with a pension, but I did purchase an immediate annuity which gives me more monthly guaranteed income like a pension would. The annuity does not include a COLA, but along with Social Security it does give me more of a piece of mind having additional guaranteed lifetime income.
@joshuacrawford7258
Ай бұрын
I have Military retirement/disability, and currently work for a county that I put 7% into my pension. It is matched at 210% after vested time of 8 years. I also put in 8% to a 457(b). Between those 3 accounts, I feel comfortable at 35 years old in my future. My spouse also has her accounts. I have many generations of family that worked for government, state and city entities that received pensions. They have all lived comfortable retirements with the ability to vacation and help others in need.
@northeasterndirtandpropert7974
Ай бұрын
We had a MASSIVE pension fund in my last employer,Arcelor Mittal.When the company sold the new owners were just itching to get at 1 billion dollars.They gave us the right to withdraw the fund money and invest ourselves,or leave it with them to control.We grabbed it real quick and tucked it away.NEVER trust a corporation to do the right thing.I'd be eating chickens weiners now.
@jlbb9934
Ай бұрын
I am over 63 years old and looking to retire August 1st after 45years my company has a modest pension that they look at every year in our wage package some years it goes up some years it doesn't it's been consistent and solid and I'm glad it's there for me thank you for your overview on pensions it was an excellent video thanks Erin
@ErinTalksMoney
Ай бұрын
Congrats on your upcoming retirement! 😊
@gilbertpierre-louis8608
Ай бұрын
Great video, but I have one thing that I disagree with and that's Incorporating your pension into your net worth. While you can calculate a long term number you can't predict life expectancy. That being said the pension payment is, as incurred, so if you live a month they pay a month, most pensions die with the owners at death.
@davidbundesen5867
Ай бұрын
Excellent video! I am retired and I currently have two defined benefit pension plans. I’ve always wondered how to figure the net present value of those income streams, and now you’ve given me a good formula. I’m not sure I’m going to include that into my net worth statement though. To me, Network is liquid. But thank you for the formula. It’s good to know.
@ivysapphire6944
Ай бұрын
I will retire under FERS with tsp. I also max out Roth IRA. If God will it. I plan to withdraw from tsp with Pension. And get SS later. Letting my roth grow untouched. However, I have 13 yrs before retirement. So we'll see. Thanks for the video. This topic is so rare.
@austinburns4213
Ай бұрын
Most pensions are not indexed to inflation or COLAs. Ours sure isn’t. After buyouts the company froze the pension. Now I look at it as Sequence of returns risk reduction because the primary value is during the first ten years before inflation eats it by 50%. My primary concern is the company rolling it over to an insurance company to get it off of their books. This is an increasingly common scenario. In doing so, it is no longer protected by the PBGC, and ‘in theory’ the insurance is protected by state insurance board. However, those backstops are limited toa fraction of the pension value (for example 250k max), plus the state may simply renege on paying.
@DWilliam1
27 күн бұрын
I’m retiring next year at age 59 with two pensions worth a combined $8K a month. $1000 is a private company and the rest is from a government job. The larger one has 1/2 COLA for the first $30K. I also managed to save $530K in a 403b which has a 7% fixed Option for life and $200K in a standard 401K. Owe $60K on my $300K Condo and my medical is being picked up by the government with my cost being $1500 a year including meds. The pension(which I paid 3% salary into for my first my first 10 years) is one of the greatest retirement plans one could have. My smaller pension cost me a total of $3600 over 10 years to buy into. It’s sad that so few jobs offer pensions anymore. It really allows people to retire with dignity.
@ichiban421
Ай бұрын
Great video Erin. Can you make a follow up on how you plan to budget/invest (or how one should do it) like with you & your husband since he’s military/government?
@dsvillalva
Ай бұрын
Hi Erin, I appreciate the straightforward information but wish you’d share some commentary on how the shift from defined benefits to defined contribution plans has left the average employee in a lurch for retirement planning. Anyone with a pension should feel blessed, and it’s a shame that tax policy to DC plans benefited corporations at the expense of employees.
@TheahLil
Ай бұрын
i have a pension at my work. There's no COLA. I also am considering I may NOT end up staying at that my whole life! So, its interesting to try to consider how it'd work for me if I left and took it water (less contirbution years), or just cash out... its definitely a little more unusual of a factor for FI people. I do use it as part of my strategy because indeed its income I wont need to investments to cover ! I look at it as kind of a bond value.
@jarc02
Ай бұрын
I receive a small pension from a company I used to work for. I was eligible to start collecting after age 50. I only get $97/month. This $ gets automatically invested monthly into an M1 broker account. I will also have a pension as a US government employee and a defined contribution plan (Thrift Savings Plan). I will be eligible to keep medical in retirement and will rely on that pension to cover medical. I will rely on my TSP, taxable brokerage accounts and IRA's to cover living expenses in retirement.
@AshleyKeith-vw7ws
Ай бұрын
Retirement planning can be quite overwhelming, especially when it comes to choosing the right investment options.
@JessicaKeith-uj1jq
Ай бұрын
Absolutely. With so many choices like banks, bonds, and IRAs, it's hard to know which ones will provide the best returns.
@blongshanks77
Ай бұрын
Thank you for making this video, Erin. This directly affects me since I’ll have both a Pension and a 401k when I retire.
@ErinTalksMoney
Ай бұрын
You’re welcome, thank you for watching!
@michelem226
Ай бұрын
Excellent video! The way that I incorporate the value of our pensions right now is to just include the lump sum value, i.e., how much we would get if we pulled our money out of the system. It's the most conservative way to do it. I'm not sure if all pension systems have this, though.
@BoxOfRain
Ай бұрын
I retired from my last employer when they decided to "freeze" their pension plan. I feared the company would monetize it as a previous employer had in the late 80s. And true to form, they gave out a "lump sum" that was deposited into 401k accounts. And then they came after retirees that had a pension - they wanted to likewise give us a "lump sum" that was considerably smaller than what it would cost to replace it on my own. The pension, itself isn't very much - but I pay about 50% to tax withholding thereby eliminating the need to worry about calculating estimated tax payments.
@josephjuno9555
Ай бұрын
I'm 62, modest Pension of $1842 p mo, they froze it 15 yr ago. Will delay SS and am considering an Annuity to build stable "income floor" and has 403b IRA Not Rich but shud be OK? I have been there since 1986! 38 Years!
@michellem8284
Ай бұрын
I also have a frozen pension. Unfortunate, since I have 31 years of service.
@jlo64578
Ай бұрын
Thank you for this video! I maxed out my 401k every year and have seen great success in the 401k performance.
@briangreenway6808
16 күн бұрын
Retirement is 160k a year with a 3-5% yearly raise depending on CPI. Retired at 48, after 25 years. Got bored, moved to another state and working on 2nd pension. Just passed my 6th year with my 2nd pension.
@CalicoCooperFan
Ай бұрын
I'm 54 with 2 pensions from previous employers and i'm working on a 3rd pension from my current employer. Those pensions alone arent enough for me to retire on, but they sure are helpful when included with social security and my retirement investments. It gives greater financial resiliency if one of those sources of income were to become flakey.
@vernshird711
Ай бұрын
I'll be getting a pension when I'm out at the end of 2025 and it's inflation protected with an annual COLA. I was told to either divide the annual amount by 0.04 or multiply by 25 to get an approximate cash value. That helps when trying to determine where you stand with your total retirement assets.
@shawnbrennan7526
Ай бұрын
25x is definitely a good starting point for your calculations. But I’d highly recommend sitting down with a financial planner BEFORE YOU GET OUT to do a financial health checkup and plan your way ahead. If you only convert that pension amount to a cash value estimate and use online tools, you’re ignoring the possibility that you could die early and your spouse would have 55% of that. (Im still a big believer in paying for the survivor benefit, though many professionals will try to sell you an insurance product instead.)
@vernshird711
Ай бұрын
@@shawnbrennan7526 My wife's accounts are with Fidelity and we meet with him once a year. We're debt-free and she'll be getting a pension and SS too. We decided that we're each taking the maximum pension (single life) since we both have solid nest eggs. On my interactive planner, I have my age projected out to 100 with retirement savings, pension, and SS. If my savings last to 100, they'll also last to 90 or 95. We don't have kids and that's the main reason we are able to be debt-free and save well.
@daringrossi1842
Ай бұрын
I am 58 with 37 years worked in local government. I have a significant 457b account and my wife and I are both social security eligible. My pension offers a full monthly payment option without any death beneficiary payout that is about $1,327 per month more than an option with 70% beneficiary payout upon my death or $1,076 more monthly with 50% beneficiary payout option. My insurance agent wants me to consider taking the full pay out option and purchasing a life insurance policy that would payout an amount that would provide plenty of income for my wife upon my death. My health is just okay and men in my family typically live to 76 years age. My wife is in excellent health. This seems a bit risky but still tempting. I have expensive hobbies and could use the extra income in retirement which is about 1 year away. Erin, would you consider doing a video on the life insurance vs pension beneficiary payout option discussing the pros and cons?
@millennialmoneyprogress
Ай бұрын
I will have a pension from local government as well as social security. I still max out my Roth IRA and my 457b. A lot of my colleagues do not invest in any other retirement plans because they think the pension will cover everything. Unwise decision in my opinion.
@stevelopez372
Ай бұрын
Unwise perhaps? It can depend how many kids are being raised. Those little Budget Busters have a way of spoiling the best laid plans. Lol
@52CA
Ай бұрын
There are so many more people retired on pension than is let on about. I personally don’t know a single retired person not on pension. And IMO all pensioners are millionaires in the value of those pensions especially considering how early most can draw. The public ones are better than hitting the lottery. Lottery winners go broke all the time. Pensioners essentially cannot.
@tothra
Ай бұрын
Hi, Erin. Thank you for a video about pensions! I'm a first responder that will retire with a defined benefit pension from my state. I hope to retire in less than 3 years. Our pensions are capped at 3% increases, tied to inflation. Whenever inflation runs above 3%, I lose future pension value. So I'm having to work a couple extra years to make up for the higher inflation we've had lately. That 9% inflation year was a killer on all pensioners. Inflation is EVIL. I will leave a 100% benefit to my wife because she's 10 years younger than me. Statistically, she'll live about 17 years after I'm gone. Also, I want to protect her benefit from the Medicare payback in case things go badly in my later years. Leaving her a 100% benefit protects her survivors benefit. I also have a 403b that I invest more aggressively than most would because of the pension. I have about 25% in a cash-safe fund, and 25% each in small-cap, mid-cap and large-cap stock funds. Plus my wife will work another 6-10 years after I retire, which will help with my healthcare costs. The ugly part is social security. Like a lot of first responders and teachers, I've also had side jobs that I've paid into the legalized Ponzi scheme. But when I retire and take my social security benefit (planning on between ages 67-70), I lose half of it due to the Windfall Elimination Provision, an evil law passed in the 80s to shore up the program back then. That doesn't take into consideration the almost 20% cut to Ponzi benefits when the "trust fund" runs out of money in about 10 years. But I try to be optimistic, I have a pension in an era when most don't, I have a 403b to shore up my pension as needed, and the frosting on my cake is that when I retire, I get paid out up to 250 hours of my unused vacation time, and half my unused sick leave. The IRS will let me put up to $20k of that income tax free into my 403b. My plan is to not withdraw it until the following tax year when I will be at a much lower tax rate. Not too shabby, but I wish I had started my 403b MUCH sooner than 18 years ago. Start saving in your TWENTIES, "kids", even if it's only $50 a month to start! As Erin has said, compounding is your secret weapon on returns!!!
@dominiquemartin9524
Ай бұрын
[But I try to be optimistic] My advice - Stop Trying, be Positive! From what you are described you are in control.
@FerdinandoAmbrosanio
Ай бұрын
I plan to retire at 62 in another country outside the US that is free, safe and very cheap with a high quality of life. I could fully just rely on only my SS if I wanted to when that times arrives but I'll also have at least one pension, a 403 (b) and a very prolific lnvestment account with my Abby Joseph Cohen my FA. Retiring comfortably in the US these days is almost impossible.
@Mr_New_Vegas_685
Ай бұрын
I opted out of my pension. I was offered a 5% 401k match and a pension or a 10% 401k match with no pension. I would rather have an additional 5% match that I own and control than count on my pension.
@TheBeagle1956
Ай бұрын
I have a fixed pension of $1,384 that I started collecting in 2013. My wife chose 50% survivor rate, so not much. My SS and pension combined is about $48k. My wife will start SS in two years at about $45k. Add in dividends and interest and we’ll be fine. Dividend increases should provide a cost of living increase each year.
@ILL-INI-XC-TF-1978
Ай бұрын
Great video. My one complaint is you talk only about the gross payment…no mention of the effect of taxes to get to the net amount. I know rates are different by state, but some mention of their impact on the pension amount would be good
@scottH18370
17 күн бұрын
I think you forgot about disability pay for the military. It is tax free so it affects your retirement planing quite differently.
@tonyboy7911
Ай бұрын
2 years left before I retire with state pension somewhere between 80-90k a year. I’m currently 50 y.o. My wife and I both have Roth IRA open with approximately 400k combined and I a 457 with 220k. My question is about the roths. I’m heavy in stocks but don’t like the volatility in the market. Any suggestions on specific investments to setup on autopilot and not worry about it constantly??
@shockwave1126
Ай бұрын
I work with a company that provides pension. It definitely is helping in my approach to retirement.
@ff5973
Ай бұрын
I will thankfully have a pension which allows me to retire at 55, that being said I have still saved nearly 25% of my income for over 25 years. I want to enjoy my retirement!
@richardgannon8292
Ай бұрын
Very nice video I have a Pension from a job. I retired from when I was younger and working on a second pension from a second job. That formula does help me calculate.thank you
@dawndarling2277
Ай бұрын
Retired after 35 years state service with a little more than $5500 a month. Spouse retired 10 years ago and gets a little more than $4k. His SS is around $2300 and we get pummeled in taxes with no write offs. We havent paid a dime for health coverage in over a decade and pension pays Part B. I'm not yet 62 but can get $2200 when I turn 62 but might wait simply because we'll end up paying 22% tax on it. Plus RMD also increases our income. I think I'll wait for a few years to collect.
@steveandrews512
Ай бұрын
Hi Erin. I'm 53 at 59 I'll start to get my pension it will be around 40,000 a year. I also have a 457 and a Roth plus a IRA account.
@michaelwillis5814
Ай бұрын
🎉🎉🎉🎉great job
@eddenoy321
Ай бұрын
With the exception of Social Security, most SPIA annuities bought through a dealer are not inflation protected. The best you can do (if you are able to) is take your monthly payments and roll them into a higher paying yield (and , more importantly ,make sure to live a long time😅). I wish you would address the SPIA market someday. Thanks.
@eddenoy321
Ай бұрын
@Erin.talk.money.123 Your digits ? What do you mean ?
@alangrawien103
Ай бұрын
Awesome content Erin!
@ErinTalksMoney
Ай бұрын
Thanks so much!
@davidstephens6458
Ай бұрын
Trying to guess who is going to live longer is not easy. My father had heart disease with four bypasses, a plastic heart valve, eight stents and a pacemaker. My mother was the picture of health, so when my mother retired from the government, she only left my father a small percentage of her retirement. And of course she passed away at 86 and my father lived another five years and passed away at 91. Current health doesn't predict life span.
@ErinTalksMoney
Ай бұрын
So true - it's a complete unknown. We had a similar situation in my family - my grandfather was the picture of health, very active and ended up passing away first. My grandma had many health issues - diabetes, heart surgeries, etc. and she outlived him. You just never know. I hope you have a wonderful weekend David!
@raybod1775
Ай бұрын
So true. I retired early 8 years ago because of severe illnesses, recovered from all. Fortunately, I was financially prepared.
@scottbender7388
Ай бұрын
Unfortunately no pension for me. I took the next best option and bought an income annuity that will pay me $24k annually. This along with SS will leave me about $1k left over each month after expenses. I also have other investments and an emergency fund that I most likely will not need to touch and just let grow.
@user-xq7qy1tj4b
Ай бұрын
You didn't mention that some pension plans offer a lump sum payment option and how to decide whether to take monthly payments or lump sum
@dantheman6607
Ай бұрын
My pension offers the same thing. I think I’m going with the monthly pension as opposed to a lump sum. I already have a “lump sum” in my 401k invested in the market. Having another source of income and not worry about the market will be nice. How about you?
@user-xq7qy1tj4b
Ай бұрын
@@dantheman6607I took the lump sum. I invested it in the market. Using the 4% rule, I come out ahead. And hopefully will have a nice nest egg to leave to my kids.
@44andbroke24
Ай бұрын
I'm 6.5 years away from a union pension of 6200.00 a month. I will be 58.5 years old. If I stay until I'm 64 it goes up to 8200. Currently saving 30% into retirement. Debt free except 215k on a house worth 750k on a 15 year mortgage @2.5%. With 9 years left. We are putting over 800.00 a week into the 401k's which have about 450k in them. I also did just receive an inheritance of about 130k. But we were already edm's at that point. My friends say I save way to much. But I'd rather have too much than not enough.
@mflong100
Ай бұрын
I am in education so we have a pension. We are funding it with 9% of our salary. It’s important to remind people that your pension may impact your social security. There is a windfall elimination provision. If you are in a job that does not pay into social security, you will get a greatly reduced amount unless you also do a job/side hustle that pays into social security for 30 years. In my situation, I paid both social security and the state pension for 21 years and a job that did not for the remainder of my working career. I will not get a full social security benefit unless I pick up a side hustle.
@ErinTalksMoney
Ай бұрын
Great point!
@danielnelson2820
Ай бұрын
Yep, I am a teacher and will not get much if any SSI.
@shawnbrennan7526
Ай бұрын
Good point, but I think you are incorrect on the 30 years. Isn’t it just 10?
@mflong100
Ай бұрын
@@shawnbrennan7526 to get a full benefit and avoid the WEP, it’s 30. To qualify for anything and be subject to WEP, it’s 10.
@mflong100
Ай бұрын
@@shawnbrennan7526 I don’t know why YT deleted my response. To get SSI without being subject to WEP it’s 30 years. To get SSI and have it reduced by WEP, it’s 10-29 years. You get a greatly reduced social security if you pay into SSI for at least 10 years and are in most government pensions.
@bayoufennec5434
Ай бұрын
Great video. i've been watching your channel for awhile. i never thought of including my state pension in my net worth. keep 'em coming.
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