Thee RANT

I started contributing to the 457 in 1989 or 1990.
I think I started at 7 or 8%
Each raise I got, I upped my percentage by half.
Say the raise was 2% that year, I went up another 1%.
If the next year’s raise was 4%, my contributions went up another 2%. When I got promoted, I figured out the percentage and increased by half.
By the mid-late 90’s, I was maxing out every year.
I retired in the mid 2000’s and went to the Feds.
I joined their version of Deferred Comp. (theirs is better-they have a 5% match).
I maxed out from the beginning.
I now (as of the November statement) have near 1.5 million in the combined accounts. That, and the soon to be second pension, is not a bad position to be in.
My advice to him is to contribute what he can now and it will make a large difference in retirement.
10% or 15% at this point is not the question.
Start now and increase as you go along.
This is not a strategy to start when you are 45.
It may suck now with the low pay but he should do it now while he lives at home.
After a while the salary will increase and it will not be be as noticeable.

Watch PBA-sponsored video below of Pension Seminar aimed specifically for Tier 3 members.  It's little long, but really informative.

Click HERE for PBA video.

Advise : Get into 457 asap (contributions go in first, then you get taxed only on remaining amount of your paycheck).
Pick a "medium" portfolio - don't waste money investing in low-paying stable fund and don't chance it in high-risk international equities.
In order to maximize this benefit, you have to begin making 457 contributions early in your career - even if it's 5%, just start.

Know many MOS who did very well with 457 - invested when they were rookies and continued with increased contributions throughout their police career - personally know couple guys who had over 1/2 million, 2 had $800k+, and 2 who had a million plus when they all retired.  Guys in their late 40's and early 50's and none of them will will ever have to work again if they choose not to...

[quote
Pick a "medium" portfolio - don't waste money investing in low-paying stable fund and don't chance it in high-risk equities.[/quote]

During the first 25 years, most of my portfolio, if not all, was in high-risk equities.
The reasoning being I was younger, still working, and could ride it out.
Now I am in the process of moving portions of my portfolio to lower risk as I am now older and coming near retirement.

High risks ( equity, large and small ) is the way to go right now in my opinion since the market is still recovering from the pandemic.
Just my opinion, I am not an expert.

Rule of thumb from someone i know who is an expert is to let it ride with high risk if you have 10 plus years to go. Once you have 1-3 years to go , start moving to stable funds since you won’t have enough time to recover if the market drops.

I just got off the phone with my nephew.  Asked him some fairly easy questions and he didn't really know the answers.  I told him that when he goes into the Academy today, ASK QUESTIONS !!  He needs to educate himself on what his Tier offers him.  I didn't start deferred comp until my second year in.  Maximum contributions at that time was $7500.  My first year in DC i was only able to save $5300.  After that I maxed out until I left NYPD for greener pastures.  I should have left my money in NYC Deferred Comp but instead I rolled it over to the NYS DC and I took a little bit of a hit.  I didn't know I could have 2 separate deferred comps.   The PBA should bring all the new guys together for a seminar and EDUCATE them on what they need to do for their future.  MY 28 years has flown by and I'm happy as hell that I used deferred comp.  In March i will finalize my retirement pension and figure out whether or not I need to supplement my pension with DC withdrawals.  I'm hoping to hit a million bucks in the next 18 months if the market stays the way it is.  I have an appointment with my financial planner in January and we will estimate and fine tune my first year of retirement and also start a possible exit strategy out of NY.

can anyone let me know what was a average salary for top pay was in 2003 to 2008. I am trying to figure what a pension for guys who left at 20 holds up in 2020. I am aware of the massive difference between a 20 year vs a 25 year pension. Or if I bail out at 24 years because i can and don't want to stick around. The inflation calculator I used in an earlier post is scary. 

I checked my pay stubs for 2002-2003.  My Gross Income was $74,466.   I had a day gig on the side for extra money and was not a big O/T guy.  So you could add some more to adjust for any O/T money that might have been made.  I had 11 years on at this time and worked Midnights.  I left NYPD in Feb. 2003 and went to a Nassau County Village and could not tell you after 2003.