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JDMEVO9 · Senior Member

Lieuntenant Pensions

4th Time · Senior Member

You figure without ot, straight salary 125 plus longevity (10 g) divide that by two. Then if you bump that up to 40 ot a month plus longevity ='s approximately 135 + 48 / 2 ; for tier 2 Lt's. Tier 3 it nowhere near that rate now. I know nothing about it . Hope that helps. I have been questioned about my math. But I'm sure of this.

-- Edited by 4th Time on Friday 15th of September 2017 04:07:31 AM

sig226 · Senior Member

1200-1500 more than Sgt.

JDMEVO9 · Senior Member

Ahhh thanks guys

yeah makes sense

monkeybones · Senior Member

If you are young on the job there is no reason not to take the captains test since every 5 years in rank you get bumped to the next pension rank regardless if you get the physical bump or not. 15 years in rank = 1 star pension... or so I've heard from Captains....

-- Edited by monkeybones on Friday 15th of September 2017 02:55:57 PM

-- Edited by monkeybones on Friday 15th of September 2017 02:56:17 PM

Winning25 · Veteran Member

Lt pension estimates

Salary $125,530
Straight time rate $60.35
OT rate $90.53

Quarterly cap 105 hours =$9,505.28
Yearly OT = 9,505.28 x 4= $38,021.11

After 20 years your pensionable longevity is your 5 and 10 year = $6,745

Holiday pay I don't know the exact number but around = $3,000

Assuming pension excess (50%/ITHP) of 450k which is someones with 20 years of contributions and average OT. Promoted twice LT within 11 years. The pension formula is $80-83 per thousand of overage left in system per year. If you are 41yrs old it's around $80 43 around $82, and up in value by AGE. So assume 41yrs old and 450k overage= $36,000. These are the variables to a 20 year pension calculation.
Final Salary(OT and holiday) + (5 and 10 year longevity) divided by 2. Add to this for 41 year old 80 x pension Overage

= 125,530+38,021+3,000(guess)+6,745
=$173,296.11 divided by 2=$86,648.05.

$86,648+(80*450)= $122,648/12
=10,221 a month assuming you don't take the loan and have that type of overage and can get capped every quarter(this doesn't include your 12k variable or your 457/401k)

Samiam32 · Senior Member

Pretty sure you got the math questions right lol

Tommy Salami · Senior Member

I appreciate the time you took to write this out but a 450k overage?? Guys with 30 years otj don't have that.

wereinbacklog · Guru

Tommy Salami wrote:
I appreciate the time you took to write this out but a 450k overage?? Guys with 30 years otj don't have that.

If you do ithp and 50/50 you can easily surpass that by 30.

Winning25 · Veteran Member

Not many people do or did 20 full years of 50%/ITHP believe me. If you do it, that is near where you should be from what I've seen. However I won't argue that just substitute 200 or whatever you believe it would be at 20 into the formula to get a more accurate approximation to your specific case.

JDMEVO9 · Senior Member

Wow i appreciate the reply

basically / going to captain and reaching that $170k mark should help make

10k per Month more of a reality for a monthly Pension..

thanks

bigfoot45 · Guru

Use a compound interest calculator. if you do 30 years and were in ithp and the 50 the whole time you will have well over a million dollar overage. I did those calculations a year or 2 ago based on being a LT from years 10-20..... and i used conservative numbers. If you do nights and cap out you'll be closer to 1.5 million. If I do 20 and out and don't take the loan I would estimate my pension to be between 9k and 11k. Just a guess could be higher.

-- Edited by bigfoot45 on Saturday 16th of September 2017 01:27:26 AM

3yrWonder · Senior Member

The additional 50% is essentially a savings account. You will pay tax on the interest the money makes. It wouldn't be wise to add the additional 50% into your pension because you'd get taxed again, essentially being double taxed...I literallly just spoke to the pension fund today about this.

4th Time · Senior Member

Nice to see I wasn't that much off from the math major. Lol.

JDMEVO9 · Senior Member

3yrWonder wrote:
The additional 50% is essentially a savings account. You will pay tax on the interest the money makes. It wouldn't be wise to add the additional 50% into your pension because you'd get taxed again, essentially being double taxed...I literallly just spoke to the pension fund today about this.

I lost you...

the additional 50% as in ITHP's 50/50 ?

and so, ithp's 50/50 only is now not wise to do ?

-- Edited by JDMEVO9 on Saturday 16th of September 2017 01:24:14 AM

3yrWonder · Senior Member

JDMEVO9 wrote:
3yrWonder wrote:
The additional 50% is essentially a savings account. You will pay tax on the interest the money makes. It wouldn't be wise to add the additional 50% into your pension because you'd get taxed again, essentially being double taxed...I literallly just spoke to the pension fund today about this.
I lost you...

the additional 50% as in ITHP's 50/50 ?

There's the ITHP and the separate additional 50%. The separate additional 50% is contributed after tax. If you wanted to add that into the pension you can but then you would be taxed again on money you already paid tax on. You only pay tax on the interest the additional 50% makes..example you contribute $50,000 after tax and the $50,000 is now worth $75,000 you will pay tax on that $25,000 the $50,000 made. I'm saying it's not wise to totally add the additional 50% money into the pension because you will be taxed again, i mean you can if you want but then you're giving money away.

-- Edited by 3yrWonder on Saturday 16th of September 2017 02:04:06 AM

bigfoot45 · Guru

I was bored so ran the numbers conservatively just now. I will have about 470K if I leave at 20.... and I stress thats only estimating I contribute 12K a year to the ITHP and 50/50 for the rest of my 20 years. Over 400K should be overage.... the rest will be the amount I required to contribute. It's crazy how fast your money compounds years 20 to 30.

wereinbacklog · Guru

bigfoot45 wrote:
I was bored so ran the numbers conservatively just now. I will have about 470K if I leave at 20.... and I stress thats only estimating I contribute 12K a year to the ITHP and 50/50 for the rest of my 20 years. Over 400K should be overage.... the rest will be the amount I required to contribute. It's crazy how fast your money compounds years 20 to 30.

Try doing the calculations aging out. When I did it I understood why these executives stay til they age out. You can literally retire being a multimillionaire.

que1999 · Senior Member

If you play your cards right on this job and do the now extinct ITHP/50%, guaranteed 8.25% compounded over a career (25-30 years), you will be quite wealthy. Contribute to these things on top of maxing out your 457, 401k and IRA... And you will be rich. Easily multi-millionaire status. People who know about money; the time value of money, and investing w/compound interest would KILL to have our pension, 457, and 401k. I attached a recent work up from the pension section for a buddy whose coming up on 20, and trying to figure out if he's staying or going... Keep in mind, these numbers don't factor in any future raises which obviously increase base salary, night diff rate, overtime rate... Which will increase ITHP/50% contributions, and 1/60th post 20.... which will increase the pension even further. The numbers get really crazy after 20 if you know what you're doing...

-- Edited by que1999 on Saturday 16th of September 2017 05:40:24 AM

RS2323 · Senior Member

It's not 50/50... It's additional 50%!!!! Which means you're contributing an additional 50% of your required pension contribution. Mine is 7.5% of which the city covers 5% and I contribute 2.5%. If I were to do the additional 50% it would be 3.75% post tax. %s are based on your age when you got on. Older you were, less you contribute.

3yrWonder · Senior Member

RS2323 wrote:
It's not 50/50... It's additional 50%!!!! Which means you're contributing an additional 50% of your required pension contribution. Mine is 7.5% of which the city covers 5% and I contribute 2.5%. If I were to do the additional 50% it would be 3.75% post tax. %s are based on your age when you got on. Older you were, less you contribute.

Yes, precisely stated. As I mentioned earlier the additional 50% is essentially as savings account that's guaranteed 8.25%. The money is contributed post tax but you will pay tax on the interest the money makes. When they calculate your pension, you can elect to roll that money into the calculation but you will be taxed again on the whole amount, essentially being double taxed, in my eyes not a wise thing to do because why would anyone want to pay tax again if they don't have to. Instead of doing the additional 50% or in addition to the additional 50% a good idea is to try to put that money into the 457/401 and try maxing them both out at $18,000 each equaling $36,000 a year. You will have more pretax money going in and that more money going in can net you more money than the additional 50%. This all dependant on the rate of return in the stock market of course. I stumbled upon a pretty cool calculator on Deferred Comps website that you can plug in numbers to get a roundabout idea of what the value of your account would be based on your contribution and preset rates of return. According to the calculator, using the numbers of a base paycheck with no overtime and with me keeping my contributions the same, if I wanted to buff out and age out, the value of my 457/401 account could be over $4 Million. This also doesn't take into consideration future raises so it will quite possibly be more. Here's the link to the calculator.

http://nyceplans.org/ac_ws.html

-- Edited by 3yrWonder on Saturday 16th of September 2017 10:17:21 AM

wereinbacklog · Guru

RS2323 wrote:
It's not 50/50... It's additional 50%!!!! Which means you're contributing an additional 50% of your required pension contribution. Mine is 7.5% of which the city covers 5% and I contribute 2.5%. If I were to do the additional 50% it would be 3.75% post tax. %s are based on your age when you got on. Older you were, less you contribute.

Correct but most people refer it to it as 50/50. In essence you'll be contributing 16.25% of your salary (after the city's 5%) which gets compounded at 8.25% yearly. This the number for someone who entered the job at 23 before the options were removed.

wereinbacklog · Guru

3yrWonder wrote:
RS2323 wrote:
It's not 50/50... It's additional 50%!!!! Which means you're contributing an additional 50% of your required pension contribution. Mine is 7.5% of which the city covers 5% and I contribute 2.5%. If I were to do the additional 50% it would be 3.75% post tax. %s are based on your age when you got on. Older you were, less you contribute.
Yes, precisely stated. As I mentioned earlier the additional 50% is essentially as savings account that's guaranteed 8.25%. The money is contributed post tax but you will pay tax on the interest the money makes. When they calculate your pension, you can elect to roll that money into the calculation but you will be taxed again on the whole amount, essentially being double taxed, in my eyes not a wise thing to do because why would anyone want to pay tax again if they don't have to. Instead of doing the additional 50% or in addition to the additional 50% a good idea is to try to put that money into the 457/401 and try maxing them both out at $18,000 each equaling $36,000 a year. You will have more pretax money going in and that more money going in can net you more money than the additional 50%. This all dependant on the rate of return in the stock market of course. I stumbled upon a pretty cool calculator on Deferred Comps website that you can plug in numbers to get a roundabout idea of what the value of your account would be based on your contribution and preset rates of return. According to the calculator, using the numbers of a base paycheck with no overtime and with me keeping my contributions the same, if I wanted to buff out and age out, the value of my 457/401 account could be over $4 Million. This also doesn't take into consideration future raises so it will quite possibly be more. Here's the link to the calculator.
http://nyceplans.org/ac_ws.html

-- Edited by 3yrWonder on Saturday 16th of September 2017 10:17:21 AM

Youre partially correct regarding maxing out 457 and 401. If you're 3 years away from mandatory retirement age you can actually double your 457 contributions while maxing your 401 for a total of 54k. Also, if you're 50+ you can contribute an additional 6k per year on both for a total of 48k combine if you max both 457 and 401 (24k +24k). Before anyone asks, yes there are folks that max out on both since it lowers their taxable income.

eze · Co-Founder/Owner Rising Star

You can easily surpass 450K overage with ITHP and 50% after 20 years. The reason you don't hear too many 20-year+ guys/gals with 450k in overage is because the ITHP and 50% only started 2001/2002 the people retired/retiring have not had the opportunity to do a full 20 maxing out both ITHP and 50%.

Tommy Salami · Senior Member

Finally! Worthwhile discussion and valid information on rising star! We did it everybody. Good game.

Eze- not doubting you, but I know sgts with 14 yrs otj that have been doing ithp/50% from day one with an excess of 150k. There is no way they are getting to 450k by year 20. We aren't talking about the ASF balance, only the excess amount.

eze · Co-Founder/Owner Rising Star

Tommy Salami wrote:
Finally! Worthwhile discussion and valid information on rising star! We did it everybody. Good game.

Eze- not doubting you, but I know sgts with 14 yrs otj that have been doing ithp/50% from day one with an excess of 150k. There is no way they are getting to 450k by year 20. We aren't talking about the ASF balance, only the excess amount.

This is where the magic of compound interest comes in. The gains between years 14 and 20/22 is tremendous. 150k at year 14 is approximately 241k at year 20 without contributions. If he/she continues with ithp and 50% they'll be close to 400k at 20/22. At a higher rank/higher salary, 450k is doable

-- Edited by eze on Saturday 16th of September 2017 04:17:10 PM

wereinbacklog · Guru

Tommy Salami wrote:
Finally! Worthwhile discussion and valid information on rising star! We did it everybody. Good game.

Eze- not doubting you, but I know sgts with 14 yrs otj that have been doing ithp/50% from day one with an excess of 150k. There is no way they are getting to 450k by year 20. We aren't talking about the ASF balance, only the excess amount.

Use a compound interest calculator and you'll see is not farfetched. I did it with your friends example and assuming yearly 15k contributions they'll have 360k by year 20 in overage. Obviously future earnings make a big difference.

wereinbacklog · Guru

que1999 wrote:
If you play your cards right on this job and do the now extinct ITHP/50%, guaranteed 8.25% compounded over a career (25-30 years), you will be quite wealthy. Contribute to these things on top of maxing out your 457, 401k and IRA... And you will be rich. Easily multi-millionaire status. People who know about money; the time value of money, and investing w/compound interest would KILL to have our pension, 457, and 401k. I attached a recent work up from the pension section for a buddy whose coming up on 20, and trying to figure out if he's staying or going... Keep in mind, these numbers don't factor in any future raises which obviously increase base salary, night diff rate, overtime rate... Which will increase ITHP/50% contributions, and 1/60th post 20.... which will increase the pension even further. The numbers get really crazy after 20 if you know what you're doing...

-- Edited by que1999 on Saturday 16th of September 2017 05:40:24 AM

Are those pension calculations leaving the money in?

que1999 · Senior Member

wereinbacklog wrote:
que1999 wrote:
If you play your cards right on this job and do the now extinct ITHP/50%, guaranteed 8.25% compounded over a career (25-30 years), you will be quite wealthy. Contribute to these things on top of maxing out your 457, 401k and IRA... And you will be rich. Easily multi-millionaire status. People who know about money; the time value of money, and investing w/compound interest would KILL to have our pension, 457, and 401k. I attached a recent work up from the pension section for a buddy whose coming up on 20, and trying to figure out if he's staying or going... Keep in mind, these numbers don't factor in any future raises which obviously increase base salary, night diff rate, overtime rate... Which will increase ITHP/50% contributions, and 1/60th post 20.... which will increase the pension even further. The numbers get really crazy after 20 if you know what you're doing...

-- Edited by que1999 on Saturday 16th of September 2017 05:40:24 AM
Are those pension calculations leaving the money in?

Yes.

Winning25 · Veteran Member

Mr Tommy, if your Sgt friends continue at their pace and get 0 more raises / promotions (don't forget the math was for an 11 yr LT) my numbers come in right with Mr wereinbacklog as to what his overage would be (360k). Your friends pension would be around $9,620 per month after 20. Leaving the money in of course. Still has same OT and Salary assumptions, which are not true yet for Sgt rank but you see the small differences depending on overage. It's all estimates and approximations till your 20th year when fluctuations are more predictable.

-- Edited by Winning25 on Saturday 16th of September 2017 04:55:41 PM

Tommy Salami · Senior Member

wereinbacklog wrote:
Tommy Salami wrote:
Finally! Worthwhile discussion and valid information on rising star! We did it everybody. Good game.

Eze- not doubting you, but I know sgts with 14 yrs otj that have been doing ithp/50% from day one with an excess of 150k. There is no way they are getting to 450k by year 20. We aren't talking about the ASF balance, only the excess amount.
Use a compound interest calculator and you'll see is not farfetched. I did it with your friends example and assuming yearly 15k contributions they'll have 360k by year 20 in overage. Obviously future earnings make a big difference.

Correct me if I'm wrong, but with 15k in total contributions, only a portion of that goes towards the excess amount? Isn't the ITHP an additional 5% of our gross salary going towards the excess amount? If 15k is an accurate number than the mos would have to make 300k gross salary (.05x300,000=15,000)

Tommy Salami · Senior Member

I phrased that weirdly. What I mean is your normal/required pension contributions and the interest thereof do not go towards the excess amount. Is that correct? Wow I still phrases that strangely. Somebody help me out!

4th Time · Senior Member

Are these realistic situations. I have kids and don't live at home with mama, I can't afford what you guys talking about contributing. Wow you guys must be rich..... Again are these contibutions numbers represent the average person who has an adult life? Not trolling by far.... serious question.

bigfoot45 · Guru

4th Time wrote:
Are these realistic situations. I have kids and don't live at home with mama, I can't afford what you guys talking about contributing. Wow you guys must be rich..... Again are these contibutions numbers represent the average person who has an adult life? Not trolling by far.... serious question.

Lol, yes they are very realistic. BTW, I ran the numbes if I stayed on till I aged out. I would have well over 3 million using

conservative numbers.... probably would be closer to 4 million

wereinbacklog · Guru

bigfoot45 wrote:
4th Time wrote:
Are these realistic situations. I have kids and don't live at home with mama, I can't afford what you guys talking about contributing. Wow you guys must be rich..... Again are these contibutions numbers represent the average person who has an adult life? Not trolling by far.... serious question.
Lol, yes they are very realistic. BTW, I ran the numbes if I stayed on till I aged out. I would have well over 3 million using
conservative numbers.... probably would be closer to 4 million

Similar numbers for me as well.

wereinbacklog · Guru

Tommy Salami wrote:
I phrased that weirdly. What I mean is your normal/required pension contributions and the interest thereof do not go towards the excess amount. Is that correct? Wow I still phrases that strangely. Somebody help me out!

I contribute 16.25% of my salary towards the pension cause I came on at 23. From the 16.25% more than half or 8.75% is going directly towards my overage without including the compounding. The exact number varies depending on how much you made that given year. A top pay Captain makes about 180k excluding night diff so you do the math. This doesn't even include future raises which will affect the overall number.

Winning25 · Veteran Member

4th time it's realistic if you make it so, meaning no car notes... Living below or within your means... Maybe 2 income household. As far as TommySalami your interest on your overage ALSO contributes to your overage and that's the windfall that helps compounding interest.

bigfoot45 · Guru

i wont be staying on this job long enough to be a millionaire, but after 20 I should have 500k plus between ithp, 50, and deferred Comp. Let the wife keep working, haha.

Winning25 · Veteran Member

I feel the same way I have 1 life to live and it would be best lived in my 40's. To each their own but being a 62 year old millionaire and dying 10 years later just doesn't do it for me... Not sure what I would trade my 40's and 50's for but its not a little more money. Definitely a philosophical question and a personal choice. Think I rather have a less money and more time to enjoy life and share with family/friends/travel/etc. than the other option. The the question of how much is enough becomes another big thing. Boy o boy if you don't have a housing expense (mortgage) pretty sure 8-11k a month will see you through.

bigfoot45 · Guru

Winning25 wrote:
I feel the same way I have 1 life to live and it would be best lived in my 40's. To each their own but being a 62 year old millionaire and dying 10 years later just doesn't do it for me... Not sure what I would trade my 40's and 50's for but its not a little more money. Definitely a philosophical question and a personal choice. Think I rather have a less money and more time to enjoy life and share with family/friends/travel/etc. than the other option. The the question of how much is enough becomes another big thing. Boy o boy if you don't have a housing expense (mortgage) pretty sure 8-11k a month will see you through.

I concur. Don't plan on wearing a gun belt after 41 or 42 at the moment.

4th Time · Senior Member

Wow guys. I didn't look at the numbers the way you all presented it. but that's a lot of sacrifice though.

brooklynbacon · Guru

Everyone and i mean everyone should be doing ithp and 50%. Period. Theres a reason the city took this away from new guys!

Theres cops with 14 years otj in my command that do 5% 457 and no ithp and 50%. Absolute morons.

Winning25 · Veteran Member

Not to bash or lecture anyone but that is a sociatal problem. An old timer once explained delayed gratification to me. At first I thought it was something sexual lol... But as I got older I realized he was right. People buy big screen tv, cars, vacations they can't afford. Out to dinner every night, remodeling house on loans, basically living above and beyond their means and borrowing against the future. I'll admit it's no magic bullet but if people saved up to buy things and delayed that satisfaction of having something right away they would think about it more perhaps change their minds and definitely save money and learn to save. Not to mention no interest payments or monthly payments. Additionally if they saved $200 less that money could be used for ITHP/50. Instead the credit card(s) bill, plus the car note, the second mortgage, pension loan(s), etc, etc, etc... How many people live check to check... Delayed gratification is so simple yet so many choose to ignore it and keep buying things on credit and on loans. A house is awesome (only debt I advice) but it shouldn't cost you both checks each month to pay.

eze · Co-Founder/Owner Rising Star

Winning25 wrote:
Not to bash or lecture anyone but that is a sociatal problem. An old timer once explained delayed gratification to me. At first I thought it was something sexual lol... But as I got older I realized he was right. People buy big screen tv, cars, vacations they can't afford. Out to dinner every night, remodeling house on loans, basically living above and beyond their means and borrowing against the future. I'll admit it's no magic bullet but if people saved up to buy things and delayed that satisfaction of having something right away they would think about it more perhaps change their minds and definitely save money and learn to save. Not to mention no interest payments or monthly payments. Additionally if they saved $200 less that money could be used for ITHP/50. Instead the credit card(s) bill, plus the car note, the second mortgage, pension loan(s), etc, etc, etc... How many people live check to check... Delayed gratification is so simple yet so many choose to ignore it and keep buying things on credit and on loans. A house is awesome (only debt I advice) but it shouldn't cost you both checks each month to pay.

Absolutely. I had an old timer explain it to me this way (I checked his math and it's correct!) Your money placed in your ITHP or 50% will more than double every 10 years, so for every $1,000 you save now it will mean approximately $180 a year for life in 10 years. $10,000 is $1800 a year for life and $100,000 ten years from now will be $18,000 a year for the rest of your life. How many people you know will spend $100,000 in cars in just 10 years? (that's only 2 "nice" cars. With financing and the extra money you have to shell out for maintenance, premium gas etc will put you over $100,000). If you save that money in 10 years you'll have an extra $1,500 a month coming! You can then go lease a nicer car with only half of that extra monthly income. Best part is this extra money will last for as long as you're alive.

Winning25 · Veteran Member

Absolutely concur...

ohnoes · Senior Member

This is all true, however, I dont think I can emphasize enough that the final loan is the way to go. So as stated before $1000 dollars in your pension account is equal to roughly $180 dollars a year.

$1000=$180/year

Ill work with $100,000 because thats not an unreasonable amount to have as a final loan (Actual its kind of small).

Ok so...

$100000=$18000/year

Most people do the math as so...

$100000/$18000=5.5

Saying basically in 5.5 years the $18k yearly payouts will be worth more than the initial $100k loan. This is basically true, if you dont reinvest the original $100k loan.
The historic average for the S&P 500 is 7% (since 1950, the last 20 years is much higher, P.S. if your CFA is giving you less than 7% on average get a new CFA).

If you can afford it, taking the loan and not touching it for 9 years makes way more sense. It goes like this
$100k at 7% average growth in the market will double in around 9.7 years.
In 9.7 years youll have $200k in the bank. You can take the 7% interest each year, about $14k, not touch the $200k principle (If you leave it in about 4 more years without touching the yearly growth you can have $18k a year without touching the principle).

This way youre getting $14k a year (or $18k if you can wait longer), but you also have $200k in the bank.

You die or there is an emergency you have $200k to rely on. Money in your hands is better than money in the cities hands.

que1999 · Senior Member

ohnoes wrote:
This is all true, however, I dont think I can emphasize enough that the final loan is the way to go. So as stated before $1000 dollars in your pension account is equal to roughly $180 dollars a year.

$1000=$180/year

Ill work with $100,000 because thats not an unreasonable amount to have as a final loan (Actual its kind of small).

Ok so...

$100000=$18000/year

Most people do the math as so...

$100000/$18000=5.5

Saying basically in 5.5 years the $18k yearly payouts will be worth more than the initial $100k loan. This is basically true, if you dont reinvest the original $100k loan.
The historic average for the S&P 500 is 7% (since 1950, the last 20 years is much higher, P.S. if your CFA is giving you less than 7% on average get a new CFA).

If you can afford it, taking the loan and not touching it for 9 years makes way more sense. It goes like this
$100k at 7% average growth in the market will double in around 9.7 years.
In 9.7 years youll have $200k in the bank. You can take the 7% interest each year, about $14k, not touch the $200k principle (If you leave it in about 4 more years without touching the yearly growth you can have $18k a year without touching the principle).

This way youre getting $14k a year (or $18k if you can wait longer), but you also have $200k in the bank.

You die or there is an emergency you have $200k to rely on. Money in your hands is better than money in the cities hands.

+1.

I don't trust this City as far as I can throw it, and if you really start to look into Deferred Comp you'll see that it isn't the best deal around, like they want you to think it is. https://www.thomanntax.com/nyc-deferred-compensation-plan/does-nyc-deferred-comp-know-the-fees/

I'm taking my overage, and rolling it over to Vanguard the minute I retire at my desired asset allocation. Also, that 7% you're citing is 'real' return.. Or inflation-adjusted. If you can stomach the volatility of an all stock portfolio, the non-inflation adjusted returns of the S&P 500 are closer to 9-10%(at least since 1926, which is when accurate stock market tracking began). My logic is as long as the pension remains solvent, we are in a position to stomach much more volatility than a person without the pension.... Lets not forget Social Security payments which can begin at 62.

ohnoes · Senior Member

You are correct sir. Inflation is the silent killer of pensions. I tried to keep it simple. It seems to me that most people don't understand/agree the final loan is the way to go.

DRPapi1983 · Guru

Or leave it all in ,..get the most monthly and take out an insurance policy ,..its a personal choice.

ohnoes · Senior Member

Taking the loan almost always is a better choice. My neighbor retired in the 70's. His pension is less than $25k a year. Inflation is a killer if the account is not growing.