We at The Watchdog played around with this little calculator, and it was enlightening.
We pretended we worked for a city that’s with the California Public Employees’ Retirement System, and that we were a general-type worker on the 2.7% at 55 plan (which many local governments have).
We also pretended that we wanted to retire at 60 (we do want to retire at 60, but will be working until we’re 80 or so nonetheless); and that we had 25 years of service in; and that our final salary was $80,000 (which is about average for the county).
Turns out our annual pension benefit would be $54,000 a year — or $4,500 a month. Certainly not in the$100K club, but pretty comfortable.
Now, as a private worker drone of the female persuasion, the amount of cash we’d need at age 60 to yield the same annual income as this public pension is $1,005,692. (It’s less for guys — $929,021 — as they don’t live as long.)
Things are far grimmer if you’re a teacher in California. You can play with those formulas, too.
Anyway, it’s enlightening to go in there with your actual pay and see what it spits out. Or, say, to plug in the pay of your city’s police or fire chief and see what it spits out.
A public safety manager type with a salary of $250,000 and 25 years in would get a pension of $187,500 a year (thank the generous 3% at 50 public safety formula). The amount of cash you would need at the same retirement age to get the same annual income is $3.5 million if you’re female, and $3.2 million if you’re male.
We’re buying our lottery ticket later. You?