Thee RANT

When I started in the early 70's, it wasn't unusual to run into guys who had retired in the late 40's and the 50's.

They always wanted to talk about how little their pensions were worth.

At that time, there were no age limits for Federal jobs, so we had lots of guys from the Department who did different things at different ranks retire and come on to our jobs.

For the most part, they were the best field training officers we ever had, even though they were technically trainees like us kids.  And everything they told us about the job was RIGHT.

Now that we're all retired and they are all gone, we still remember all of them as part of the best days of our lives.

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.

NYbronxPD wrote: ↑

Dec 27, 2020

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.

Want to guess which bit of advice was the one we ignored (in most cases)?

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.

Deferred Comp is still making good money. The payroll deduction hurts at first, but then you figure out to live with it. It really pays off in the long run.---20 is Plenty

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.