Why I dislike pensions (but I'll take it if it's there)
Pensions. What the heck is a pension? Afixedamount,otherthanwages,paidatregularintervalstoapersonortotheperson'ssurvivingdependentsinconsiderationofpastservices,age,merit,poverty,injuryorlosssustained,etc.: or at least that is according to THIS website.
Well hey that doesn't sound too bad does it. I myself as a public school teacher have been part of a pension plan ever since I got my first job. You may think I would be excited to be a part of this plan, but I am not.
In fact I am downright fearful. First of all the state that I live in is known for corrupt government officials who have been part of various schemes that involve lining their pockets with a bunch of taxpayers money. That money is probably also taken from the state teachers pension funds...so that blows.
Second, I don't have any control of how that money is invested or saved. I would much rather have that money to invest, save, or spend at my leisure. That means once my money exits my paycheck, not voluntarily btw, I lose all control of it. That drives me nuts!!!
Some people may not be bothered by this. Some people may tote the merits of a pension as guaranteed income for retirees.
The main problem with this is that you may be the last man holding the bag, aka the guy still living when the pension fund runs out of money. Stacking Benjamins just did an excellent podcast on this and I highly recommend you listen to it. (It is much better than this article:)
In fact, our pension system is flawed in the fact that if the money is not invested well as a whole or not enough people want to become and stay teachers then the fund runs out. The only solution is to hire more teachers or make the new teachers work longer to collect later and less. That is where we currently sit.
I (supposedly) would have to work until 70ish under the new laws in my state to receive full benefits. The state can kiss my hairy you know what if they think I'm working that long, but I am sure other teachers look at this and think that is the way it has to be. Would you want a 70+ year old teaching that wanted to retire some 8+ years earlier. I wouldn't! They would be grouchy all the time and not really be an effective teacher.
So what is the solution? Well I don't have a very popular solution but I think it would work. GET RID OF THE PENSION! That's right. Just do away with it. As an ex: Anyone who has 10 years of service will still receive a pension, everyone else is on their own for savings. Harsh. Yes. Absolute. Yes. Will it work? Maybe.
Results are inconclusive. People may or may not save more on their own for retirement. Those who have retired or will who count on the pension may or may not make it, but they should be able to. The point is that our current system is not working and we are heading for a giant fiery wreck at the end.
The question I have for all of my fellow teacher's is that are you willing to risk it? Are you willing to be dependent on something so far out of your control that you won't fight for getting that money back? Are the perceived pros worth the impending cons?
Hello there again faithful readers...or casual passerby...ok... So maybe you accidentally clicked here thinking this was Mr. Money Mustaches blog. It is not. I'm not half as cool. Before you go though maybe you would enjoy taking a look at my personal finances and where I am at in life. That way you can either laugh, cry, or give me a pat on the back and your viewership inspires me to keep going. So thanks. Now lets get crackin!
Mint says my current net worth is...
That is a difference of...
Whoo HOO!!!! Thatis right haters, I'm headed in the right direction this year. So how did I increase my net worth by that much? Did I fall into a pile of money or rob a small ATM? Nope. Read on to find out how the old school family is kicking off 2015 right.
O.k. So this post is probably long overdue. After all I do blog a lot on personal finance and I notice most other bloggers throwing their net worth out their so I probably should to. I guess I just have been a little nervous to do so. I mean after all, telling a bunch of people who you may or may not know isn't exactly normal in America.
Most people in America act like they have money and really don't. I act like I don't have money and I really don't. Then their are those who act like they don't have money and they really do. I want to be the third option.
We all have to start somewhere so I guess I will just give you the lowdown on my net worth via Mint. The only thing I don't really agree with on Mint is that the value of my cars is assessed. I know I can change this setting but I really don't want to, and I don't factor in the value of my house either. I figure the house is a liability really until I pay it down, because I can't cash it…
*For those of you astute readers out there you may have noticed that I changed my last net worth post to read first edition. I did this because I miss wrote September when in fact September had not yet happened. So without further ado here is the September issue of Old School's net worth...
Hot off of Mints' press reveals that my net worth is now...
O.k. Well lets see where I was last month...
That is an improvement of...
Woohoo! O.k. It may not be hitting the jackpot, but it is a step in the right direction. How did this change occur?
1. Payed down the mortgage a little (We always put a little extra on our mortgage).
2. Saved some money and hit our $5000 in savings goal
3. Carpooled to work and spent less on fuel
The vehicles we currently own did not really depreciate, which doesn't really matter to us because we plan on driving them until they die.
My ROTH actually went up by about $20 and my wife's 401k went down by about …