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>Salaries that don't include pensions aren't nearly as generous as they sound. $100K/yr without a pension is comparable to $40K/yr with a pension. I don't know

>Salaries that don't include pensions aren't nearly as generous as they sound. $100K/yr without a pension is comparable to $40K/yr with a pension. I don't know how to square this with 12 percent of salary I was contributing towards the state pension. Care to share your math? I agree that pensions are worth something, but not 150% of salary.

CydeWeys 6y ago
The state ends up paying a lot more than your contribution to it.
- scarface74 6y ago
  Are you sure? Have you calculated the cost of an immediate lifetime annuity? https://www.immediateannuities.com/information/annuity-rates-step-1.html https://www.immediateannuities.com/information/annuity-rates...
throwawaygh 6y ago
https://news.ycombinator.com/item?id=23519601 https://news.ycombinator.com/item?id=23519601 assumes no emplyoee contributions, so adjust the math accordingly. Anyways, even if it were equivalent to $30K, as others have suggested, I think that still speaks to my original point. That doesn't exactly hit my threshold for "wow you're definitely super duper well-paid so we should exempt you from non-compete rules because you're making so much damn money".
Spooky23 6y ago
You were probably in a later pension tier and stuck paying for the richer benefits of people from the 70s. Or the employer stiffed the pension fund in the past.
PacketPaul 6y ago
Every job in the US saves 15% of your income for retirement. It is called social security. The problem is the politicians control it instead of the individual so the money is not invested but spent. If people were allowed to have private retirement accounts with that Social Security money, everyone would be able to retire comfortably.
- sheeshkebab 6y ago
  I guess you’ve never been in a country with (hyper)inflation or with stock market dropping 90%, and when all of your private retirement money goes up in smoke in a year. the closer you are to retirement age the more interesting it gets.
- Nbox9 6y ago
  This isn’t technically true in a lot of ways. Social security is taxed at 12.4% for up to $137,700 in wages, and technically 6.2% come from your paycheck and 6.2% come from the employer. There is Medicare taxes, which could be considered retirement savings in some ways, which is a total of 2.9% (1.45% from both the employee and the employer), bringing the total “retirement” associated taxes at 14.4%. There is an additional 0.9% Medicare tax on all earnings over $200,000. There is a big difference between money taxed and money saved, and calling money collected from Social Security “savings” is misleading.
- mschuster91 6y ago
  > If people were allowed to have private retirement accounts with that Social Security money, everyone would be able to retire comfortably. The drawback of a capital-only pension system is that ever more and more "dumb money" gets locked into things like ETFs - and more and more shares of "safe" companies get owned by entities which have ... questionable interest in exercising their voting rights. For example, take big oil or coal companies. Their time to live is limited, last but not least because the demand is going to dry up sooner or later. Normally, investors would shed off these shares or at least push the company to sustainable goals - think car companies here: the long term goal that's most beneficial to society is to shift to electric / hydrogen, while the short-term goal that's most beneficial to next quarter's benefit is to cut r&d and sell high-margin SUVs instead. The other problem that locking huge amounts of money into ETFs presents is a bit more complex: as more and more marker volume is held by ETFs which have to track the base stock get into a precarious position. Assume a stock drops in value because of a large sell-off, bad news, a Presidential Tweet or whatever, the ETFs the funds have to follow... and sell off, creating a race to the bottom due to oversupply (and the other way around). That means that, as more and more percentage of wealth is gobbled up by "dumb money", the remaining traders gain undue influence since they can essentially force the hands of the dumb money. And then there is the final drawback: a government backed pension scheme like the German one where current employees pay the pensions of current pensioners in exchange for the in-kind promise ("Rentenpunkte") will weather any economic crash as long as the government keeps existing. A capital-based system is in for a nasty surprise in a total collapse event. The 'rona was a warning sign in that case.

CydeWeys 6y ago

The state ends up paying a lot more than your contribution to it.

scarface74 6y ago
Are you sure? Have you calculated the cost of an immediate lifetime annuity? https://www.immediateannuities.com/information/annuity-rates-step-1.html https://www.immediateannuities.com/information/annuity-rates...

throwawaygh 6y ago

https://news.ycombinator.com/item?id=23519601 https://news.ycombinator.com/item?id=23519601 assumes no emplyoee contributions, so adjust the math accordingly. Anyways, even if it were equivalent to $30K, as others have suggested, I think that still speaks to my original point. That doesn't exactly hit my threshold for "wow you're definitely super duper well-paid so we should exempt you from non-compete rules because you're making so much damn money".

Spooky23 6y ago

You were probably in a later pension tier and stuck paying for the richer benefits of people from the 70s. Or the employer stiffed the pension fund in the past.

PacketPaul 6y ago

Every job in the US saves 15% of your income for retirement. It is called social security. The problem is the politicians control it instead of the individual so the money is not invested but spent. If people were allowed to have private retirement accounts with that Social Security money, everyone would be able to retire comfortably.

sheeshkebab 6y ago
I guess you’ve never been in a country with (hyper)inflation or with stock market dropping 90%, and when all of your private retirement money goes up in smoke in a year. the closer you are to retirement age the more interesting it gets.
Nbox9 6y ago
This isn’t technically true in a lot of ways. Social security is taxed at 12.4% for up to $137,700 in wages, and technically 6.2% come from your paycheck and 6.2% come from the employer. There is Medicare taxes, which could be considered retirement savings in some ways, which is a total of 2.9% (1.45% from both the employee and the employer), bringing the total “retirement” associated taxes at 14.4%. There is an additional 0.9% Medicare tax on all earnings over $200,000. There is a big difference between money taxed and money saved, and calling money collected from Social Security “savings” is misleading.
mschuster91 6y ago
> If people were allowed to have private retirement accounts with that Social Security money, everyone would be able to retire comfortably. The drawback of a capital-only pension system is that ever more and more "dumb money" gets locked into things like ETFs - and more and more shares of "safe" companies get owned by entities which have ... questionable interest in exercising their voting rights. For example, take big oil or coal companies. Their time to live is limited, last but not least because the demand is going to dry up sooner or later. Normally, investors would shed off these shares or at least push the company to sustainable goals - think car companies here: the long term goal that's most beneficial to society is to shift to electric / hydrogen, while the short-term goal that's most beneficial to next quarter's benefit is to cut r&d and sell high-margin SUVs instead. The other problem that locking huge amounts of money into ETFs presents is a bit more complex: as more and more marker volume is held by ETFs which have to track the base stock get into a precarious position. Assume a stock drops in value because of a large sell-off, bad news, a Presidential Tweet or whatever, the ETFs the funds have to follow... and sell off, creating a race to the bottom due to oversupply (and the other way around). That means that, as more and more percentage of wealth is gobbled up by "dumb money", the remaining traders gain undue influence since they can essentially force the hands of the dumb money. And then there is the final drawback: a government backed pension scheme like the German one where current employees pay the pensions of current pensioners in exchange for the in-kind promise ("Rentenpunkte") will weather any economic crash as long as the government keeps existing. A capital-based system is in for a nasty surprise in a total collapse event. The 'rona was a warning sign in that case.