How many pensions is too much?

United States
February 4, 2007 11:02am CST
President Bush will receive a life time pension once retired from the presidency; he should also receive a pension from the state of Texas due to his service as governor; he may be eligible for a pension from the private company he retired from (I'm not sure what he did prior to being governor); he may be elibible for a military pension (not a whole heck of a lot was revealed about his service, other than the fact he didn't go overseas). His federal pension is lifetime and will never go away...I doubt the USA will go broke; they'll find some way to pay the president the money. But what about any other moneys he's earned...do they get added, or is one nullified (the state one) after he's elected president? After watching my late grandfather's pension funded raided and left to fend on his SS (a whopping $202 a MONTH back in 1984!), I'm thinking more and more about it lately. Is there any fairness?
2 people like this
5 responses
• United States
7 Feb 07
Three things I've seen talked about here, President Bush, Social Security, and inflation. President Bush: - He started off better then many of us (his father was president), but in general, he made choices throughout his life which had consequences. All of those consequences add up to his multiple pensions, and many other things. If you think the president's pension is too high, tell congress. In general, I would say that being president is about 2 full time jobs and is more important than just about any other. So, getting a long pension is understandable. Social Security: - SS was a bad idea when it started. It was voted in by people that would benefit from it more than they would have to pay. Therefore to them, it sounded like a great idea. In general, though, it is not a good idea. The main concept is this: Americans are too stupid to save enough money to take care of themselves, so the government will force them to "save money". If this was all that it was, it would be bad enough, but it also is a law that says, "we have a bunch of people that were too stupid already, lets start spending what others are saving instead of investing it like we should." WHAT?!? Anyway, SS is going to go bankrupt. It will go under unless it is reformed, i.e. privitized. The only sulutions are (a) more input or (b) less output. In other words, either workers are going to have to contribute more and more and more, or the payouts are going to become less and less and less. The people this really screws are the people that have been forced to pay SS for years now but will never see a dime in return: talk about a bad deal. SS was never designed to actually live on, it was designed to help those that were having trouble making ends meet, at least that's how it was spun. (As noted above, it was really designed as a way for our forefathers to get more money and have us foot the bill.) Is SS fair? Definitely not. What would be fair is eliminating SS. Let people fund their own retirement. If they chose not to, then they can work for the rest of their lives or live with family. How do you think people have been living for thousands of years? Inflation: - Scorpio, this was not really braught up by you, but I thought I would address it. An ample retirement fund is one that can BOTH (a) supply enough income for you to live on and (b) increase in size with inflation so that the true value of that supply is the same year after year after year. Some people don't think of it this way. Also, some people will not be able to attain this. That is understandable. Let's assume a 10% rate of return and a 3% inflation rate. If you can put $10/day for 40 years, that equals ~ $1,600,000. But, if you want that to continue to grow at the rate of inflation that means you can only spend ~$9400/month, which in todays dollars would be only ~$2900. It's not a lot, but it would be enough for many people to get by. Some people don't have 40 years anymore, though. Say you feel you need to do it in 20 years. Maybe you are 45 already and want to retire at age 70. Same assumptions, putting $25/day away gets you ~$900,000 in savings, which equates to $2500/month in spending money in todays dollars. Again, not a lot, but enough to live on. Personally, I want to get a higher rate of return. Let's look at the difference. If I could get just 15% instead of 10% for my return, then compared to the second scenario, I would be able to spend over $5600/month. WOW! What a difference. I work with a company that tries to help people create that difference. We try to find ways to get you more bang for your proverbial buck. Send me a message, I'd love to talk to you about it.
• United States
11 Feb 07
Ok, if the average person is to fund their own retirement, the first thing that needs to be done is eliminate the SS tax! But that's 14 cents on the dollar (14%), right--which if I'm thinking correctly is taken from the gross wages weekly? (I haven't worked in 15 months so I'm not sure). What would the rate of return need to be for workers making $5 an hour need to be (if they had a 40 hour workweek)? Quite high. The tax system overall needs to be overhauled--it's quite unfair to those of the lower class and way too complicated for the average person to handle. Perhaps a flat tax that NO deductions can be taken may help, but as it is now, many low-income ($20k or less) may pay nothing because of deductions (I know--I got a huge refund in '05). As for your numbers, I have NEVER earned $2500 a month--more like $2k or less and I don't expect that to change any time soon. I am currently 35 and hope to live to 65 (the women in my family pass away before that age). I currently am living on borrowed funds (from my home) while I attend school and have done some things to help spend less money regularly (ie, quit smoking, quit getting food at the convenience store, changed my driving habits) but when there's little to no income coming in, those savings are negated by the simple fact that everything's being reapplied to something else. Believe me, I wouldn't mind working but no one will hire me for the money I should be paid (considering my experience, I should be getting paid $25k or more--I was last making less than $20k) unless I have that proverbial piece of paper. Since it's going to cost quite a bit more than $25k to get it, I'm already behind the 8-ball. Your numbers are assuming that one will always be working; that no catastrophes befall them; and that the cost of living is much lower than NJ, NYC or other high-cost areas.
1 person likes this
• United States
13 Feb 07
Question 1: "What would the rate of return need to be for someone making $200/week" (I am assuming you meant if they could invest what is being taken by social security) Social Security is paid a total of 12.9% of your gross pay (6.45% comes out of your check and the other 6.45% is paid by your employer, which really means that your employer is not paying you that, but it is costing him that much to have you as an employee). There is an additional 2.(% that goes to Medicare, but let's just deal with the 12.9% for now (though medicare could be added in). So, at $200/week in income, someone has ~$25.80 going toward social security. If they were investing that instead, for 40 years, in order to get to the same income when they retire, (in todays $, assuming a 3% inflation and only living off enough so that they could live indefinitly as described above) they would need a 9.5% rate of return. It should be noted that if they work for 50 years, they only need a rate of return of 8.3%. Over that length of time, both of these rates are very doable with a generic stock account. To give some statistics, the compouned average rate of return for the last 50 years has been about 10%. If you go back to 100 years, it's about 8%, if you go back 200 years, it's about 8.5%. So, getting a return in the 8-10% range is not unreasonable. Actively managed accounts usually get 2-5% better (actively managed means that there is a broker who tracks your money and moves it as he feels is appropriate. This is the opposite of passively managed which means that your money tracks exactly what the market does as a whole.) As to what you should be paid: I am sorry to tell you this, but everything in an open market is worth what someone is willing to pay for it. So, if you need/want to be paid more, you have to determine what it is that you can do to make yourself more desirable to those who might pay you. I congradulate you on going back to school. That is great. If I may, I offer one other piece of advice, look for other ways to get paid more. The world is full of opportunities. Don't let them pass you by. I recommend reading a book or two by one of my favorite authors on finances: Robert Kiyosaki (my favorite) or David Bach (my second favorite). Ric Edelman isn't bad either. (Note: I have no affiliation with any of these authors or their publishers, I just like their work. As a note, so do many other people since the all have at least one book on the best sellers list.) Also, it is everyone's choice as to where they live. Most people stay where they are born. I did not. I moved about 300 miles away to a "city", if you can call it that, which has a cost of living of only about 60% of where I came from, but I can get a job that pays at least 95% of the amount I can ge there. If anyone cannot make a living, move to a place with a lower cost of living. One last note, the amount I say someone can live on is based on never eating away at the value of one's capital investment. Most people do not do this. Truthfully, this should be a goal, but if you fall a little short and need to eat a little capital each year, that is not a big deal. I hope this is helpful. Good luck on your schooling scorpiobabes.
1 person likes this
• United States
14 Feb 07
I can't send you a message unless we're friends first (myLot's rules). Basically, if I received the moneys that myself and my employer paid for a social security tax, I'd have cleared a little more than $23k. Chump change! Something I tried to do to make myself more marketable was to get that da*ned piece of paper...which isn't making me any smarter, just costing me more than a year's salary EACH YEAR! Why? Because everyone else tells me so. Your numbers are flawed in that you're assuming that there is an INCOME. I currently do not have one which is my argument. I don't know if I'm going to be able to go back to work. It appears that a lot of what you've typed is the SAME THING AS BEFORE and you didn't really read what I wrote. I'm house rich but cash poor. Unfortunately, I can't keep using my home's equity to live off of--if the market goes south I'll up a creek. While I appreciate your posting, unfortunately, you're trying to get me involved in your business. And I could definitely live off of $2500--I was living off of $2k or less!
@mypigbox (2245)
• China
11 Feb 07
There is not absolute fair things in the world.President is president,normal person is normal person.It is different at all.
1 person likes this
• United States
14 Feb 07
My concern is that someone theoretically could work 3 different civil service (government jobs) in a life time (or at least 2) and receive twice as much to retire as someone else who may only be elibible for social security? I think that once you achieve the highest elected office in the land that ALL previous pension elibility should be negated.
@missyd79 (3438)
• United States
7 Feb 07
well techinacally it is fair, I mean he "worked" these jobs and is entitled to the pensions. I mean it would just be like when someone that serves in the military and does like 30 years and then after that works another job till they are like 65 and gets a pension from that job. it is all fair.
1 person likes this
• United States
7 Feb 07
But suppose he got a job after the White House--he then is contributing to SS and he can draw on THAT too? That's what is NOT fair. Right now, I don't even think I will ever be able to afford to retire, I'll just work until I die! It's hard when you hear stories of so many people on retirement and disability barely getting by and with the Boomers now retiring in record numbers, the system will go broke! I'm not suggesting that he doesn't deserve them (and I don't think he served long enough in the military for a pension anyway), but with corporations doing early buy-outs, more and more people are retiring younger. Perhaps a larger chunk needs to be penalized if you retire before 65 for nonmedical reasons, with it phasing out the longer you work. Perhaps the government should start hiring investment managers and really earning us money!
@patootie (3593)
4 Feb 07
No matter how much pension you think will be enough .. it won't .. when I first started working in 1968 my paypacket was £4.17s 6d a week just over $9, by the time I stopped working in 1993 my weekly wage was averaging £423 weekly or $832 .. but in just the 14 years from when I stopped working to now the job I did is commanding around £1,000 a week or $1967 .. So it's more than doubled in 14 years .. and in another 10 years that will probably have doubled again ... so whatever pension I may have thought I'd need a few years ago simply won't be keeping pace with the cost of living as it is now .. If you are looking to start a pension then unless you are very young it may already be too late to save a decent enough amount of money to live off when you retire .. pretty scary isn't it ..
1 person likes this
• United States
4 Feb 07
I started a retirement fund at the first job I was eligible (and even then, I wasn't elible immediately, I think I had to wait until I was 19), but only managed to save about $625--compounded now to an astounding $2300! (in 16 years!). I've saved a little bit more in a couple IRAs (Individual Retirement Account)but far less than that. I started working at 15 where I paid taxes (my first paycheck was for $22!); my last job where I paid taxes I barely cleared $20000 a year (I had just turned 34). It's atrocious--I've got to sell my home to fund my daughter's college education (hopefully there will be enough equity!) as well as pay off mine (that'll have to wait for my father's passing). I'm self-employed now, but not earning enough for anything but losses still. Scary--no. Terrifying--YES!
• United States
4 Feb 07
No I don't think so. He is looking forward to a cushy future yet want to propose a budget that will take even more from the elderly. I am sorry about your Grandfather because then it will be left to family to help him out, yet Bush says his budget proposal is to help the young people in the future! How by making them have to rely on their young family members to help them out!!! Makes me furious.
1 person likes this