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?