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Old 11-09-2018, 09:35 AM   #46
Biggd
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Join Date: Nov 2016
Location: Waltham Ma./Meredith NH
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Originally Posted by Major View Post
It's not free, but it's certainly subsidized. New Hampshire's retirement system is less generous than Massachusett's retirement system, which in turn is less generous than Rhode Island's retirement system. In all fairness, I don't know much about NH's and Mass's retirement systems, but I know a lot about Rhode Island's, since my wife was part of the system. I don't think the concepts are too disparate though.

Since Forum members like facts, I'll give you an example. My mother-in-law retired from Rhode Island in 1999 at the age of 54. Her pension is approximately $70,000. Since retirement, she has collected $1,250,000+. If she lives until age 85, she will collect a total of $2,500,000. How much did she contribute to her pension? $90,000! The state contributed another $90,000. So for a grand total of $180,000, and a personal contribution of $90,000, my mother-in-law gets a lifetime salary of $70,000. Not a bad deal! All of this information is online and verifiable.

I do not fault her for this. It was the deal she made and we should abide by it. However, the math doesn't work. Pensions are not sustainable. That is why the dreaded private sector moved away from pensions 30+ years ago. Pensions may have made sense when public sector workers made less than private sector workers, but that has changed.

As stated above, NH and Mass aren't as generous as RI, but I am certain that taxpayers subsidize pensions. We should get out of the pension business and move toward individual retirement accounts.
Generally when you take a state or city job you make less money than the private sector so you give up the "pay me now" for the "pay me later". In the case of your mother in law, she's getting the pay me later. Good for her!

In my younger days I had the chance to take a government job at $11.00 an hour and working the night shift as opposed to the private sector where I made $16.00 an hour working normal day time hours. I choose the private sector because I was a hard worker and I knew I would make a lot more money for my family at that moment.
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