In hindsight, the only thing that might tempt me if I had it all to do over again would be a job where I could work for 20 years and then collect a pension/retirement while working a second career, like the military or maybe a police/fire department job. During my 42 year work life, I had two jobs that I held for 5 years each and one job I held for 10 years, interspersed with a bunch of jobs I worked for 2-3 years each (or sometimes less) to occupy the other 22 years. The 10 year stint was the last job I had, and I would have been with them longer than that but I got laid off at age 60. Part of my many moves were dollar-driven (especially in the 1980s), and some others were BS-avoidance. But the thought of being a "lifer" with a single employer is a foreign concept to me. Thank goodness for portable retirement plans.
,I guess I stand corrected once again. It would seem though that the common denominator between the teachers and the RR is that they’re both unionized? Dunno. I do know that they’re pretty strong unions. I once belonged to the culinary union and the carpenter’s union in Florida and the Fishermen’s union in Alaska but none of those had anything much in the way of any great retirement benefit. Every job still took out SS, State and Federal taxes and of course, the union dues.
@Bobby Cole The vast majority of people have no clue about RR retirement and have no real reason to. You are more than correct about the union. I live in a right to work state, however the RR is closed shop. That means if I didn't join a union the COMPANY would terminate my employment go figure. I worked there something like 34 years and saw maybe 3 contracts setteled. We would be called to strike and congress would order us back to work and negotiate our contract. To say it's a strange industry is a understatement.
I was self-employed from 1985 til I retired last year. You HAVE to pay into SS (it's the FICA tax, includes Medicare) it's part of your tax return, at least as a DBA/proprietorship business. As others have said, some places (mostly government jobs) do not have to participate in SS/MC, like my retired buddy who was a mail carrier. But things change: He told me the other day that retired postal employees will go on Medicare next year instead of the USPS own medical plan. I worked in small job shops before going out on my own in 1985, except that I wasted four years of my life at General Motors (1977-81). There's no way I could have stayed there long enough to collect a GM pension. I started a SEP-IRA in 1990, which means "Simplified Employee Pension." Same as a regular IRA but instead of a fixed maximum contribution each year, the max is tied to what you earn -- so the more you earn the more you can contribute. I knew absolutely nothing about investing when I started, but I read a lot of the classic investment books (and methods) of long-term investing (the Get Rich Quick schemes never interested me). I never got any advice from anyone, paid or otherwise, and it turned into a hobby for me. I also started a taxable account for extra money in the late '90s. It all worked out, as I'm living fine with SS, bond interest, and stock dividends.
I am retired civil service, 30 years. I'm no expert on pensions but , I did not have enough quarters paid into SS as such I draw nothing from SS , but I do draw a pension which i am happy with.
Well, all I know is that my classmate went to SS office to start his SS and, after looking his name up, they told him he had none to collect. Perhaps it's an Indiana thing, don't know.
And then, there is the bankrupt problem. An old friend of mine worked for the County of Orange in So California. After 10 years of service, she could collect retirement from them. So, after 10 years, she left/retired, but only a few weeks after she left, the County went bankrupt. She didn't get a single penny of retirement from them. This happened back in the mid 90's.
I worked for a joint venture between Honeywell Info Systems and a French Telecommunications company in the mid 80s (back when 14.4k modems were rack-mount and awe-inspiring.) We had SEP-IRAs as the retirement plan. Each employee went to the bank of their choice, set up the account, brought in a fistful of deposit slips, and every payday 10% of our wages were deposited into our accounts, 100% vested on that day. It was a sweet deal for the employee, and the employer did not have to pay for/maintain Plan Administration...you were on your own, baby. Sadly, being a start-up when the economy went south, they went belly-up.
There is a certain amount of risk in some of the public pensions. There is either outright theft & fraud, or there's the issue you point out, or the government Plan Administrator decides to invest in "Woke" stuff rather than solid industries, or there's a downturn in the economy and the taxpayers get really outraged at the inappropriate benefits they are paying for, and suddenly a bunch of .gov retirees are trimming back their lifestyles.
I am reminded of an IHOP waitress I kinda got to know from my dining activities. I walked in one day and she was obviously in a bad mood. Usually this means that there is some behind-the-scenes Peyton Place stuff going on (the things I've heard), but not this time. So me being me, I asked her what today's problem was. It seems she just had her 30th birthday, and called Social Security to sign up for retirement benefits. She did not like the response she got. "I've been working since I was 18!!!" She was pi$$ed. LOL.
That's what happened to retirees from the Great Northern Paper Company when it went bankrupt. Shortly afterward, the town filed for a form of bankruptcy that allowed them to stiff its retirees from their retirement. They went to court on it, and the town won.
SS has nothing to do with Indiana; it is based on reported income and taxes paid. If your classmate didn't pay into SS he wouldn't get anything out of SS.
Wow John, so many things here. As I understand it: If the company dies, you still have whatever money you have in your SEP. You can contribute to it any year that you have "earned income." I have none this year so I cannot put any more money into it. If the company dies, you may have to convert it to a simple IRA or something, but the money does not all go down the drain. And about the 10%: The annual contribution is figured from one's taxable income; it's a bizarre calculation (surprise!) that I never bothered to follow. The final number isn't known until the calendar year is over and you have your taxes done. I would put in several chunks over the calendar year, kinda guessing (by how busy I was) at what the total might be. After my acc't did my taxes, and found that I put too much in, I had to withdraw the overpayment -- but that only happened maybe twice in 31 years. Otherwise I would be somewhat short, and if I wanted to max my contribution (as I always did) I would have to put the full number in by April 15. But I'm getting senile so this may not be 100% correct, but AFAIK it is close.