What is wrong with California?

[Bo Diddley]

Yeah, and the whole--let states go bankrupt--thing by McConnell is a little worrying. I have several years in the Utah Public Safety plan. I was planning on beefing that up after retiring from the military. Hopefully Utah is still in a good position when I get to that point.

[Paperback Writer]

Yeah, and the whole--let states go bankrupt--thing by McConnell is a little worrying. I have several years in the Utah Public Safety plan. I was planning on beefing that up after retiring from the military. Hopefully Utah is still in a good position when I get to that point.

Probably a topic for another thread but there are a bunch of people working in corporate America trying (and most failing) to make it to retirement on a 6% (or thereabouts) matching 401K. They will not be too keen on having to pay higher taxes at the state and/or federal level to secure other people's retirements.

[BigFatMeanie]

Probably a topic for another thread but there are a bunch of people working in corporate America trying (and most failing) to make it to retirement on a 6% (or thereabouts) matching 401K. They will not be too keen on having to pay higher taxes at the state and/or federal level to secure other people's retirements.

I agree with your point but your two sentences are not really linked. I agree that people will not be happy paying higher taxes to secure other people's retirements, but I'm not sure that has anything to do with how much they're currently putting into their 401k or how much match they're getting.

You obviously know there is no rule, or even any type of implicit social promise or contract, that says if you put the minimum required to get a full match into your 401k then you'll be sure to get a comfortable retirement. If those 6% 401k savers want a more comfortable retirement they should reduce spending and start saving more than 6%.

Heck, I don't want to pay more taxes to support someone else's retirement and I'm dumping way more than 6% into my 401k.

[Paperback Writer]

I agree with your point but your two sentences are not really linked. I agree that people will not be happy paying higher taxes to secure other people's retirements, but I'm not sure that has anything to do with how much they're currently putting into their 401k or how much match they're getting.

You obviously know there is no rule, or even any type of implicit social promise or contract, that says if you put the minimum required to get a full match into your 401k then you'll be sure to get a comfortable retirement. If those 6% 401k savers want a more comfortable retirement they should reduce spending and start saving more than 6%.

Heck, I don't want to pay more taxes to support someone else's retirement and I'm dumping way more than 6% into my 401k.

The link is in compensation and benefits. For instance two people making roughly the same salary except one works for a corporation and gets a 6% maching 401K and also pays in social security. The other gets 75% of his salary after 30 years without having to save 6% or pay into social security. Then it looks like a state may not be able to honor its pension obligations and wants to raise taxes on everyone but it will mostly fall on people who don't have state pensions.

It's really a difference in retirement systems and tax payers having to fund pensions and increase their tax burden to do so in a bailout situation for a group of people who may not have to save the same way to secure their retirements.

And I agree that most won't make it to retirement on 6% matching. I've been maxing out my 401K contributions for many years. Perhaps I'm just envious of those who don't have to do that to make it to retirement.

[Bo Diddley]

The link is in compensation and benefits. For instance two people making roughly the same salary except one works for a corporation and gets a 6% maching 401K and also pays in social security. The other gets 75% of his salary after 30 years without having to save 6% or pay into social security. Then it looks like a state may not be able to honor its pension obligations and wants to raise taxes on everyone but it will mostly fall on people who don't have state pensions.

It's really a difference in retirement systems and tax payers having to fund pensions and increase their tax burden to do so in a bailout situation for a group of people who may not have to save the same way to secure their retirements.

And I agree that most won't make it to retirement on 6% matching. I've been maxing out my 401K contributions for many years. Perhaps I'm just envious of those who don't have to do that to make it to retirement.

How do you figure? Because they're moving to Idaho in retirement? Of course then they have to pay for the outrageous Idaho state retirements.

If you take the pensions away, you'll have to pay more to attract employees. Perhaps that's not a bad thing. Would you replace that with matching 401k funds?

[Paperback Writer]

How do you figure? Because they're moving to Idaho in retirement? Of course then they have to pay for the outrageous Idaho state retirements.

If you take the pensions away, you'll have to pay more to attract employees. Perhaps that's not a bad thing. Would you replace that with matching 401k funds?

An assumption is that the majority of workers do not work for the state so when taxes are raised for state pension obligations, most of those paying the additional taxes are doing so for the benefit of a minority of state workers in the pension plan.

As far as taking pensions away and having to pay more, I do not agree with that statement. Pensions have disappeared in corporate america and it did not occur with an upward adjustment in salaries. When the company I worked for went from a traditional pension to a 401K exclusive system, it did not increase anyone's compensation even though it significantly lowered retirement benefits.

I don't have a good answer of whether I would replace pensions with 401K funds as they both have advantages. Do you think California or any other state would get anywhere with a request for federal funds or higher taxes if instead of a pension, the state employees had their retirement savings in 401K plans and now had about 30% less due to the stock market or other investment downturns? How do you think tax payers feel when their 401K balances have been reduced due to COVID-19 and are thinking about how they can increase their contribution percentages to compensate only to find out they may need to pay higher state taxes to cover other people's retirements due to COVI-19?

[Scott R Nelson]

As far as taking pensions away and having to pay more, I do not agree with that statement. Pensions have disappeared in corporate America and it did not occur with an upward adjustment in salaries. When the company I worked for went from a traditional pension to a 401K exclusive system, it did not increase anyone's compensation even though it significantly lowered retirement benefits.

I worked for two companies that had both pension plans and 401(k) plans. Didn't work for either of them long enough to get fully vested and receive a big pension payment, but what I do get makes a difference. The pension was an added benefit, but neither company made a big deal about that like they did matching funds for 401(k) or health plans.

[Bo Diddley]

An assumption is that the majority of workers do not work for the state so when taxes are raised for state pension obligations, most of those paying the additional taxes are doing so for the benefit of a minority of state workers in the pension plan

Well then certainly, as a group, they pay more taxes than the employees, a smaller group. I don't think that means much as everyone benefits from the work done by the smaller group of employees.

As far as taking pensions away and having to pay more, I do not agree with that statement. Pensions have disappeared in corporate america and it did not occur with an upward adjustment in salaries. When the company I worked for went from a traditional pension to a 401K exclusive system, it did not increase anyone's compensation even though it significantly lowered retirement benefits.

A major factor that keeps me working for the Military is the pension benefit. I could make much more in the private sector.

[Scott R Nelson]

I just received the Official Election Mail from Alameda County so that I can set things up to vote by mail. It was sent to my Idaho address, of course. I've been gone from California for more than two years now, but apparently I'm still on their rolls. I called them sometime back to try to get them to take me off of the rolls and was on the phone for a long time, but couldn't manage to do it.

It would be easy for me to commit election fraud - for one vote - if I were so inclined. This is definitely screwed up.

[Katy Lied]

Dont do it. You're providing evidence that you still live there and need to pay taxes there. At least 50/50

[Katy Lied]

A major factor that keeps me working for the Military is the pension benefit. I could make much more in the private sector.

This is exactly what propelled pensions in the public sector in the first place.

80 years ago, public jobs paid very poorly compared to private sector jobs, so to attract workers to the public sector, benefits were generous. Generous sick pay, generous holiday pay, pensions, etc etc.

Two things have happened in the 80 years since:

Corporate jobs are no longer lifetime employment. Now, most people change careers (not jobs) 4 times in their work life. Every career change usually reduces pay. Also Private sector job wages have gone down in cost cutting measures. (Upper echelon Private Sector jobs still pay fine).

At the same time, Public sector jobs have inched up in pay for the past 50 years, to become equal to Private Sector wages, and even greater. So now the Public Sector still have their great benefits, but also better wages.

[Katy Lied]

[Moliere]

Is California still in lockdown? Weird. I’m back in the office on the reg and my kids are all back in school. We are eating out and even hit up a movie a couple weeks ago at the theater. And I can shop at any store now since they are all back open, at least in the suburbs. Still a lot of places not open downtown but they are slowly coming back.


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[Sullyute]

This is exactly what propelled pensions in the public sector in the first place.

80 years ago, public jobs paid very poorly compared to private sector jobs, so to attract workers to the public sector, benefits were generous. Generous sick pay, generous holiday pay, pensions, etc etc.

Two things have happened in the 80 years since:

Corporate jobs are no longer lifetime employment. Now, most people change careers (not jobs) 4 times in their work life. Every career change usually reduces pay. Also Private sector job wages have gone down in cost cutting measures. (Upper echelon Private Sector jobs still pay fine).

At the same time, Public sector jobs have inched up in pay for the past 50 years, to become equal to Private Sector wages, and even greater. So now the Public Sector still have their great benefits, but also better wages.

It depends on the public sector job. I read an article a while back about the growing chasm between public and private legal jobs ( hard to keep and attract good public attorneys when they can make so much more in private practice). Also public sectors have been reducing benefits too. UTah reduces it pension pay in from 2% per year worked to 1.5% about 10 years or so ago. Also lots of states have not funded their pension liabilities (I am looking at you New Jersey, Illinois, Alaska, etc.) as they should and there are large short falls in the near future.

[The_Tick]

Is California still in lockdown? Weird. I’m back in the office on the reg and my kids are all back in school. We are eating out and even hit up a movie a couple weeks ago at the theater. And I can shop at any store now since they are all back open, at least in the suburbs. Still a lot of places not open downtown but they are slowly coming back.


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Still locked down. No movies, no schools, no sports. Also...restaurants are all takeout.