The Millionaire Cop Next Door

[mrjarrell]

Or garbage collector or petty bureaucrat. Government workers are over paid (taking into account all they get and will receive upon retirement) and getting higher up the ladder every year. The government sector is bankrupting us with payouts and pensions and the unsustainable growth in this sector is already causing fiscal problems. We must downsize government at all levels or pay the price. In higher taxes or a collapse of governments (not necessarily something I fear).

via Forbes

It is said that government workers now make, on average, 30% more than private sector workers. Put that fantasy aside. It far underestimates the real figures. By my calculations, government workers make more than twice as much. Government workers are America's fastest-growing millionaires.
Doubt it? Then ask yourself: What is the net present value of an $80,000 annual pension payout with additional full health benefits? Working backward, the total NPV would depend on expected returns of a basket of safe investments--blue chip stocks, dividends and U.S. Treasury bonds.
Investment pros like my friend Barry Glassman say 4% is a reasonable return today. That's a pitiful yield, isn't it? It is sure to disappoint the scores of millions of baby boomers who will soon enter retirement with nothing more than their desiccated 401(k)s, down 30% on average from 30 months ago, and a bit of Social Security.
Based on this small but unfortunately realistic 4% return, an $80,000 annual pension payout implies a rather large pot of money behind it--$2 million, to be precise.
That's a lot. One might guess that a $2 million stash would be in the 95th percentile for the 77 million baby boomers who will soon face retirement.
That $2 million also happens to be the implied booty of your average California policeman who retires at age 55. Typical cities in California have a police officer's retirement plan that works as follows: 3% at 50. As the North County Times of Carlsbad, Calif., explains:
Carlsbad offers its police and firefighters a "3-percent-at-50" retirement plan, meaning that emergency services workers who retire at age 50 can get 3 percent of their highest salary times the number of years they have worked for the city.
City officials have said that in Carlsbad, the average firefighter or police officer typically retires at age 55 and has 28 years of service. Using the 3 percent salary calculation, that person would receive an annual city pension of $76,440.
That does not include health benefits, which might push real retirement compensation close to $100,000 a year.

More at the source.

 

[IndyMonkey]

Some people get banned for posting this.

 

[mrjarrell]

Some people get banned for posting this.

Well, if someone's that sensitive then it's a case of que sera sera. The truth sometimes sucks. They need to embrace it.

 

[Hoosier Gun Coat]

The government is like a dead opossum on a hot summer day......bloated.

 

[Eddie]

Well, if someone's that sensitive then it's a case of que sera sera. The truth sometimes sucks. They need to embrace it.

I think the ban was for posting articles without any sort of commentary or invitation to discuss; spamming.

 

[Denny347]

I make $60,000 a year. What is my private sector equivalent that makes $42,000? I make a similar wage to any of the skilled trades. It is not "get rich" money but I won't starve. My wife still has to work and my kids go to public school. My retirement is not anything to brag about. I've been an officer for 12 yrs and I'll be able to retire in 18 more...come on 2028. If I don't have a house payment by then, I might be able to live OK on it. I'm not going to get rich in this job.

 

[melensdad]

I make $60,000 a year...

Denny, I believe the article was referring to jobs in those states where there are serious issues. Compare your pay/benefits to an officer in CA, NJ or NY where the pay/benefits packages is much better.

Here in Indiana we have had a reasonable level of fiscal restraint and that has been top down and bottom up. Our government is not like that of NY were there are over 8000 subway/transit workers making over $100,000 per year.

 

[Denny347]

Denny, I believe the article was referring to jobs in those states where there are serious issues. Compare your pay/benefits to an officer in CA, NJ or NY where the pay/benefits packages is much better.

Here in Indiana we have had a reasonable level of fiscal restraint and that has been top down and bottom up. Our government is not like that of NY were there are over 8000 subway/transit workers making over $100,000 per year.

Ah, I see.

 

[Eddie]

If I am reading the article correctly it is saying that a person who earns a pension that pays $80,000 a year is earning the equivalent of a person with $2 million invested who is living off the interest.

 

[360]

I make $60,000 a year...

Yeah, but how much do you make via bribes, sale of evidence, and other "perks"?

 

[ihateiraq]

Yeah, but how much do you make via bribes, sale of evidence, and other "perks"?

im sure its in the hundreds of thousands.

 

[360]

im sure its in the hundreds of thousands.

I wouldn't even think about it if it weren't.

 

[TiminMishawaka]

If I am reading the article correctly it is saying that a person who earns a pension that pays $80,000 a year is earning the equivalent of a person with $2 million invested who is living off the interest.

You're right and it's an unfair comparison that is also patently deceptive. A pension does not have an equity value that passes on after the death of the individual to the 3rd, 4th generation, etc. BTW - a person that makes only $80,000.00 a year based off 2 million dollars of investment simply sucks at being an investor. 4% is a pittance and barely makes COLA.

 

[Scutter01]

Some people get banned for posting this.

No, they don't. If that's really what you think then you grossly misunderstood the problem.

 

[flatlander]

I make less than 30k a year including bennies as a city emp. no COLA in 3 years. Show me where I can make more in this state and I'll be all over it....just sayin'

Bob

 

[Denny347]

Yeah, but how much do you make via bribes, sale of evidence, and other "perks"?

I'll never tell...................

 

[Denny347]

I make less than 30k a year including bennies as a city emp. no COLA in 3 years. Show me where I can make more in this state and I'll be all over it....just sayin'

Bob

Yeah, my father-in-law is a building inspector for the City. He makes $23,000 a year. Thank goodness my mother-in-law has a decent job.

 

[kabrown]

I make $60,000 a year. What is my private sector equivalent that makes $42,000? I make a similar wage to any of the skilled trades. It is not "get rich" money but I won't starve. My wife still has to work and my kids go to public school. My retirement is not anything to brag about. I've been an officer for 12 yrs and I'll be able to retire in 18 more...come on 2028. If I don't have a house payment by then, I might be able to live OK on it. I'm not going to get rich in this job.

Do you also get health benefits in retirement? I so, that is a HUGE cost.

By my calculations, if you retired in 2028 making $60K you would be getting $42K per year in retirement benefits, equal to 70% of your pay. Is this correct? If so, that is something to brag about. I wish that my job would pay me 70% of my pay in retirement.

 

[jbombelli]

You're right and it's an unfair comparison that is also patently deceptive. A pension does not have an equity value that passes on after the death of the individual to the 3rd, 4th generation, etc. BTW - a person that makes only $80,000.00 a year based off 2 million dollars of investment simply sucks at being an investor. 4% is a pittance and barely makes COLA.

Ok. Let's say it doesn't carry over. If you live for 25 more years after retirement, at $80k / year, you just made $2,000,000.

 

[4sarge]

Do you also get health benefits in retirement? I so, that is a HUGE cost.

By my calculations, if you retired in 2028 making $60K you would be getting $42K per year in retirement benefits, equal to 70% of your pay. Is this correct? If so, that is something to brag about. I wish that my job would pay me 70% of my pay in retirement.

NO, No Health Benefits for PERF Pensioners in Indiana and there are several different PERF Plans but your calculations are incorrect.