Retiring on a Pension | Jill on Money
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- čas přidán 6. 08. 2024
- On this episode of Jill on Money, Jill Schlesinger and Mark Talercio talk with Regina and Dave, who are planning retirement on a pension, as well as considering if re-locating is in the cards. If you'd like to submit a question for Jill on Money, visit: www.jillonmoney.com/contact.
Jill is an Emmy and Gracie Award winning Business Analyst for CBS News and host of the Jill on Money podcast. For more, check out: www.jillonmoney.com.
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This couple is doing a much better job than most people on retirement.
Wow these guys are in great shape - there are so many out here that are broke or at least less fortunate-
An indexed pension of $5300 a month for life is a sweet option !! Just strive for good health and enjoy life and keep your faith in God! God blessed you all!! ❤️❤️🙏🙏
Per the Pennsylvania State Employees Retirement System, sers.pa.gov/DefinedBenefitPlan-RetiredMembers-COLAS.html , pensions are not indexed for inflation.
Good job Jill & Mark. Your advice to Regina & Dave seemed very reasonable & appropriate. "And Rent!" 😎
Great video! Loving this topic.
Pennsylvania has no state income tax on retirement income. So there is no state income tax on withdrawal's from IRA's, 401k's or pensions. Even the traditional accounts. As a resident, I would find it hard to move to another state that does tax retirement income. Especially if it is more expensive like Dave and Regina are thinking about.
I hear this a lot but you have to take into account property and other state taxes as well .
Most states that don't have income tax have higher property and other taxes .
@@ada-yw1bb i am moving from almost 4k prop taxes on 1/3 acre house in colo
to 100 acre raw land in tn. prop taxes are 419. i can live with that...
No state tax in NJ if your income is less than $150,000
You guys rock!
Great video and information. This couple is my wife and I in 10 years. Well, minus the rental property! I have the exact same pension in the same state, and the same 457. BTW, you’ll pay no state or local taxes on the pension if you maintain residence in the state. So, don’t move to a taxing state, or just rent elsewhere for a short time! Also, Medicare becomes primary at age 65. You do have to pay the deductible and with the state benefits you still have to pay the employee contribution. Just some things to keep in mind. Enjoy retirement!
Wow! This couple’s situation is very similar to me and my wife. I retired last year age 56 with pension of $5,600 per month (no COLA). 700K index funds and 401K. 15K in dividends per year. 125K high interest savings and CD’s. Our expenses are around $6,200 per month. Wife works from home for a few more years 60K per year. No debt or mortgage. I do pay $200 a month for $500K life insurance for 30 years which roughly gives her half of my pension. The other option was to take $5,700 pension with same basic payout. So we are essentially saving $300 per month with pension optimization using life insurance.
Thanks
mortgage rates aren't the problem. taxes taxes taxes is the problem.
Yes if they spend $600000 on a new home the taxes will be a grand a month.
agreed. paid 234k cash 12 years ago in colo.
my latest prop bill was almost 4k. retiring to tn. late summer.
it used to be location, location, location. now it is taxes, taxes, taxes.
This scenario is just like mine in terms of salary, pension, and expenses. The only thing is that I’m single, 65, no children. I was scheduled to retire from a local government job and i live in California. The housing and food costs today have skyrocketed so i delayed retirement until the end of the year and be closer to the time i take social security. However, my pension will be subject to the Windfall Elimination Tax and automatically they will take $500 off of social security. It sucks. Anyhow..still trying to find the right CPA or tax person, financial planner who i can turn to…
Really appreciate the real life advice on your show. So they give up a percent of the retirement pension to have a beneficiary . They are young enough to buy a 20~25 year life insurance policy on the pensioner at a monthly premium that easily less than half of the difference between the full pension and reduced pension with a beneficiary. Did this for my wife’s teachers California CalStrs “pension” . Your thoughts ?
Great discussion. I always tune into this kind of content because there’s not alot out there that talks about retirement considerations for people with DB pensions.
I was surprised when he said that he’ll get social security benefits as a retired government employee with 35 years. How does the Windfall Elimination Provision apply in his situation? I, too, will get a DB pension when I retire in March 2026 but I won’t receive any SS benefits. I’ll be 50 years old. I worked in the private industry for 8 years prior.
He probably contributed in his state job. Some states do it that way.
@@Liledgy100 aah ok - thanks!
2:44 I mean Jill on Travel would be a great show
I like them.
I vote for them to take the maximum pension distribution and just buy a term life insurance policy.
I disagree. Taking the second option with the benefit for the wife is the insurance!
Yup. That’s what most retired teachers I know do
@@iampicasso1811I’m back and forth on what they should do. I recently read if the other spouse passes away before the person with the pension, they’ll still only get the amount from the payout plan they signed up for.
Lifetime medical requires receiving monthly pension.
We are in the process of relocating. It was one of the building blocks in our retirement planning that is enabling us to retire much earlier than expected! We are cutting 7 additional years off working by moving.
Portugal or Mississippi?😜
@@janitoronfire TN! South is so much cheaper.
I think I would have asked whether the defined benefit payments were fixed or if they adjusted for inflation each year. It seems like this would make a difference in how much income will be needed in the future.
It’s fixed. I will have the same one.
@@rickm8456 Correct, thank you for being the first person to educate others that pensions in PA do not increase with inflation over time: sers.pa.gov/DefinedBenefitPlan-RetiredMembers-COLAS.html .
You want an annuity that accounts for inflation, not fixed. I'm looking at opening up an annuity soon.
State pension will include a COLA. I stand corrected, PA does not include a COLA. Mine does in my state.
Not enough future pensioners contribute to their 457b deferred comp plans! Good work Dave and Regina. It’s one of the first things I tell new employees. 😂
I thought the $195k was sort of lame. I had $600k in mine after 15 years.
.....and?
@@Toomanydaysyeah but how much is your monthly pension?
@@Toomanydayswell congrats to you, but I wouldn’t bash someone else’s amount. It’s much more than most end up with. I would like to know if he pulled some money out of the 457 for the second property. I took 100k out of mine years ago for a second property.
My State had a 7% contribution to pension, so it's difficult to max put on 403B when you average 2.5 % yearly COLA and several salary freezes over the years
Is it better to take out the lump sum and save it on hysa or gamble it in a volatile stock
Market?
who offers pension nowadays? All corporate America cares about are job cuts & profits....This couple is doing well with pension but is in very small minority, unfortunately. Most workers are trading time for money...to make a living. Money may be a renewable resource for some but time is not for all..so enjoy life while you still have health.....health is wealth as they say.
Dang, those home prices are dirt cheap. Where I'm at in southern California blue collar, working class homes are $900k to $1 million.
You guys are another matter out there!
We are debt-free DINKs living in MD. I'd love to retire in Amish country (Lancaster or Lititz), but I'm not sure I can convince her. I'm retiring at the end of 2025 and will get an indexed pension from MD gov't. She'll retire in early 2028 or early 2030. She'll get a smaller pension, not indexed. We both have pre-tax savings and each of our SS amounts will be similar.
I'm in PA. Grew up in MD. No state tax on SS or pension here in PA. Real estate taxes are a little more that you are used to. Overall cost of living probably a little less. Central PA is great - always on the list of the nicest small towns. Lots of places to hike and bike,
My pension is 5000 . I haven’t taken ss yet. My school bus job is 2000 monthly. I do have a 401k. 63 years old
Forget about the kids! There fine. Take the 💯% benefit for your wife! No brainer. The rest of your assets go to the kids.
Cathay Pacific is my favorite airlines. US planes suck.
A Challenge for Jill and Mark: How can a non working spouse of disabled veteran with no income, contribute to a ROTH IRA? I do have a brokerage investments (200K(FXAIX/FSKAX/QQQM) brokerage and 55K Roth. My spouse is a 100% disabled veteran, his disability benefit is a non-taxable income. Hope you can talk more about Veterans and Veterans spouses investment options. Any changes from Secure Act 2.0 for veterans? Neither of us are working and living abroad. NO DEBT at all /everything is paid off(house, car etc). Many Thanks. Li (AGES:40/77) BTW, Love the show by the way.
You don't have "income" but you can always do a Roth IRA conversion to protect some/all of your IRA accounts.
Vow well done Yee are in a great place, sadly this scenario is like a fantasy 🙈
How does a Mid-50 year old couple making ~$190k/yr not have at least $3M net worth? I mean at $190k you should easily be able to set aside $40k/yr + $20k/ company match (estimate). I really don't understand how one can spend almost all they make?
Many people contributing to defined benefits plans feel they've got their retirement sorted out. Must be nice for them to know they'll receive a healthy, indexed, pension for life. As a result of the security their pension will provide, in their working years they may feel comfortable spending all their take-home on lifestyle. They effectively never experience the 'accumulation stage' that all the rest of us without pensions live through.
Payed off their mortgage first home and bought and finished off rental property
Kids and college also require a bunch of money.
Most public sector employers do not provide a match to 457(b) or 403(b) plans.
@@rossmacintosh5652 Per the Pennsylvania State Employees Retirement System, sers.pa.gov/DefinedBenefitPlan-RetiredMembers-COLAS.html , pensions are not indexed for inflation.
Boomer here. Two pensions and Social Security. None of it is taxed.
CSRS, military and SS 😊
It all sounded amazing until the wife brought up taking on a mortgage in a more expensive area. You don't want a nortgage heading into retirement. Bad idea.
Ok great some people have so much how can the average person retire at 62 with $1,000,000 net worth, NO det and live to 100 years old with out running out of money ??? Yes I am worried about this every day !
$300k in a 35 year 401k is better than average savings but not great. He either was too conservative in his funds or under contributed, probably both. I had 10 times that much after 28 years and that's just my 401k not including a big taxable account and my wife's big 401k. My wife and I each retired with generous pensions and very large 401k's and we exercise every day. We don't need survivor's benefits so we are getting maximum pension payments.
Best for my, Good for my pensione , Byutiful, yesss 🚀💯🎯🍀🍀🍀✌️💵♥️🔥👍
This couple makes me sick!! LOL We are no where near in that kind of shape.
And I want to ask. At least half of us are post divorce and single. Why is it that these examples are primarily about “couples”? There is the support factor both emotionally and financially. I’m sorry but I think more podcasts like this just are not realistic for a large group of us.
I would also like to see something like this for a single person.
I guess there are advantages to sticking things out with your spouse.
Half? Doubt that…
@@edhcb9359 that's true. As long as both spouses respect one another, sticking it out has benefits. But since I'm solo I'd like to see some examples for us as well :).
@@skepticalmechanic in my career field, I tend to see a lot of divorces. Sad indeed.
Best you tuber
Retiring next year at 59 after 32 years in education in NYC. Pension is around 8K a month, $900K in a 403b with a guaranteed 7% option, retirement condo paid off. Plus in NYC we paid into SS so I’m looking at $2700 payment at age 62. NY and Florida doesn’t tax the pension or any money I withdraw from the 403b or SS benefits. Most people I know just get a term life for their spouses since they bang you about a $550 deduction for full survivor pension benefits. Oh, and my health insurance is covered for life with just co-payments.
The problem. Why would you want to retire in NYC or New York state for that matter? Also, if you moved to Florida, you'd be hit by high home insurance costs, HOA fees, and the rising cost of living. Why would you even buy a condo? A house is where it's at. You own the house. A condo is just an apartment.
@@DIVISIONINCISION I already own a great large Condo in SC. It’s in a gated community, a ton of amenities(pools, tennis, golf, beach cabana, tennis, etc) with a reasonable HOA that includes internet, cable, telephone, infrastructure, maintenance and the aforementioned Amenities. Taxes are super low and the cost of living is also low. I bought it back in 2010 and is now worth 3 times what I paid for it. I’ll keep my rent stabilized apartment in NY and live like a snow bird, and still be able to pay zero state and city taxes on my pension, SS and any 403b withdrawals. I’ve already owned a house and I don’t want the maintenance(fixing the roof, landscaping, driveways, exterior painting, etc no thanks) anymore and besides you never really own the land, so you don’t really own it.
@@DWilliam1 I'm a disabled veteran, so I don't pay any property tax.
Congrats, 32 years Wow! My wife is tier IV 25/55. Just hit 25 years but will hang in 2 more years. I thought only the first $40k of the 403b is tax free in NYS? Also don’t forget you get reimbursed for any Irmaa fees. Hopefully Adam’s doesn’t gut the healthcare.
Instead of wasting money burning jet fuel traveling to exotic locations, we have a retirement hobby of finding treasures at estate sales and consignment shops. Common to find items we enjoy that are worth 10 times what we paid, and several times bought art objects worth 100 times what we paid. You end up with tangible valuable collectable items you can enjoy every day. With vacations you are throwing money off an expensive cliff.
Hopefully their State pension is well funded and the State is fiscally sound. Avoid NYC
They have a defined pension for life, nuff said our children will pay for their retirement!
Really not how it works. But go ahead and feel that way if you want. 🤷🏻♂️
Wait a minute. Not all defined pension can keep the promises. You should not bet what you get this year can be maintained.
Rent out both houses and use the income to rent somewhere you both would like to live.
They are behind for their age as far as 401k. But having 2 paid for homes makes up for that. Regina’s entire salary should be invested. Anything left after Roth should be in a s@p 500 mutual fund.
He has a Pension as his primary income for life. Not a 401k
Not being rude but his pension will way oversee a 401k plan. He speaks of a 457 plan which is a separate pension on top of his primary pension
@@vincemarquez1959I agree with you. A pension each month for the rest of his life is solid.
Pensions are a great thing as long as the company has fully funded it. I've seen to many large cities with poorly funded pension funds and guess what? The retirees are left with nothing. I would suggest to roll your pension assets out and into an IRA and at your young ages, start converting more into your Roth accounts. With today's federal deficits going to the moon the tax rates are only going higher!
This is totally waste of time? Just Bragging? You are totally set! NEXT CALLER...
Need to cut out the small talk. No one cares.
You two rock ✌️✌️✌️
My ? is...for planning, how much do you factor in inflation/escalation in year-over-year retirement costs.
For example, insurance costs are going through the roof. For younger retirees, seems like what they spend now could skyrocket in the future, right?