FedEx pension
11-20-2019, 06:58 AM
#21
Super Moderator
Joined APC: Jul 2006
Posts: 5,559
Originally Posted by Denny Crane
.........until the Gubmint decides to confiscate retirement accounts (401k, IRA etc) in the name of universal retirement for all. Not likely in the near term but none of us know what future will bring.
Denny
Denny
11-20-2019, 07:02 AM
#23
The NeverEnding Story
Joined APC: Sep 2005
Posts: 7,515
Originally Posted by crewdawg
Is the FDX/UPS pension adjusted for inflation? Has the total benefit been increased much over the last few negotiating cycles.
The UPS flat dollar amount DB was increased from $3000/YOS for Captains (30YOS max) to $4000/YOS in Contract 2016, and will rise to $4200/YOS on 1 Jan 2021.
And again, UPS and FDX both have defined contribution plans in addition to their defined benefits.
When discussing the value of a defined benefit, one needs to see how much additional MPP money would be necessary to match even a static DB benefit.
11-20-2019, 07:39 AM
#25
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Joined APC: Oct 2014
Posts: 893
Originally Posted by BoilerUP
It is a ballpark place to start without consideration of RMDs or average annual returns post-retirement.
If anything, one would need more than $3.25M to equal a $130k/year defined benefit...
If anything, one would need more than $3.25M to equal a $130k/year defined benefit...
$2.25M will give you just under $130k per year for 25 years if you assume 3% growth. You may want to assume different growth and longevity factors, but you have to include something. A pension doesn’t give you both income and then turn over the principal to your estate when you die.
11-20-2019, 07:55 AM
#26
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Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Originally Posted by bugman61
$2.25M will give you just under $130k per year for 25 years if you assume 3% growth. You may want to assume different growth and longevity factors, but you have to include something. A pension doesn’t give you both income and then turn over the principal to your estate when you die.
Everyone needs some kind of income to cover expenses. How about you use that pension to cover the first $130k of yearly expenses and now you don’t have to withdraw that out of your retirement accounts allowing them (the retirement accounts) to grow your estate even more.
Denny
11-20-2019, 08:02 AM
#27
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Joined APC: Oct 2014
Posts: 893
Originally Posted by Denny Crane
You are right, a pension doesn’t get turned over to your estate but......
Everyone needs some kind of income to cover expenses. How about you use that pension to cover the first $130k of yearly expenses and now you don’t have to withdraw that out of your retirement accounts allowing them (the retirement accounts) to grow your estate even more.
Denny
Everyone needs some kind of income to cover expenses. How about you use that pension to cover the first $130k of yearly expenses and now you don’t have to withdraw that out of your retirement accounts allowing them (the retirement accounts) to grow your estate even more.
Denny
I don’t disagree with that at all. Just encouraging people to make fair comparisons. I hear all the time “I would need $xxx in order to equal my 60 fae without taking away principal.” It doesn’t work that way. There are a number of factors that drive you towards a correct analysis of annual income in retirement.
There aren’t many benefits to pensions these days but one is that they can assume we all live to the average age. When you individualize it we all must assume we live to the max which greatly increases funding requirements.
11-20-2019, 08:34 AM
#28
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Joined APC: Sep 2008
Position: Kickin’ Back
Posts: 6,971
Originally Posted by bugman61
I don’t disagree with that at all. Just encouraging people to make fair comparisons. I hear all the time “I would need $xxx in order to equal my 60 fae without taking away principal.” It doesn’t work that way. There are a number of factors that drive you towards a correct analysis of annual income in retirement.
There aren’t many benefits to pensions these days but one is that they can assume we all live to the average age. When you individualize it we all must assume we live to the max which greatly increases funding requirements.
There aren’t many benefits to pensions these days but one is that they can assume we all live to the average age. When you individualize it we all must assume we live to the max which greatly increases funding requirements.
My only point is having guaranteed income from a pension is not necessarily a bad thing.
Denny
11-20-2019, 09:51 AM
#30
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Joined APC: Apr 2007
Posts: 4,460
Originally Posted by Denny Crane
My only point is having guaranteed income from a pension is not necessarily a bad thing.
Denny
Denny
Here is an alternative. Get cash in your name and invest it for income. My personal preference is creating that income through real estate investments. It can be done through independent ownership, partnerships or a syndication. You don't have to be a landlord to have income from real estate. The reliability of rental income exceeds the reliability of pension income over the last couple decades.
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