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Some people's $$$ decisions baffle me.

March 3rd, 2011 at 10:59 pm

Why would someone throw away a pension? My coworker quit last week, it was totally unexpected. I guess she is going to be a fulltime Monovie consultant.

She had 14 years with the company I work for, that is 14 years part-time which means if she went back to just part-time work she could retire 6 years from now and get $814.39 minimum a month once she reaches age 60 plus paid medical once she reaches age 60. Part-time employees put in an average of 25 hours a month.

Of those 14 years, she had 9 years fulltime with the company, this means had she continued to work an additional 11 years full time she would have gotten a pension of a minimum of $1766.70 per month plus paid medical starting from the date of her retirement which would have been age 43.

I know that the job sometime is not the greatest with all its rules and regulations but she was making $53,443.68 a year salary and $16,320.48 of that was tax free.

The median income per household for our town is $39,422; males had a $33,804 income and females had $22,647. She is single with no children, she has a mortgage and tried to sell her home last year and was unsuccessful because of the location, size and lack of garage.

I wish her the best but I worry for her. I wonder if she really thought this through. I mean if she lived to be 80 years old the full time pension would have been another $65,367.90 of income. Also what is she going to do for health insurance? She is still young so maybe she totally spaced off the medical costs since for the last 9 years her medical has been covered 100% by the company.

Just a month ago she was talking to our big boss asking about financial advice, she wanted to START to invest and her family friend was selling some sort of insurance investment thing. She said she was investing 10% of her base pay which is the pre-tax portion not the tax free part which is only $5,334 per year into her 401K, so she wanted to start branching out because she felt she was behind in her retirement plans.

A big portion of my retirement plan is that pension. My BF will be eligible for two pensions, the part-time one mentioned above and a fulltime one but his fulltime one does not include medical. Now IF we were to be married when our retirement time came (13 years for me), 10 years for him but he can go longer IF he wants…I think 13 years would be perfect, okay sorry got off topic but if we were married he would be eligible for medical under my pension package.

Time goes by so fast, I just do not understand why she did not switch to at least part-time so that she could keep the medical and dental portion but paying less than $100 in premiums for it while she got her monovie consulting business off the ground plus that pension at age 60.

4 Responses to “Some people's $$$ decisions baffle me.”

  1. LuckyRobin Says:

    Maybe she hated the job and really wanted out badly? More likely she just didn't think it through. A lot of people will quit something they hate in a fit of pique and then regret it later.

  2. creditcardfree Says:

    Would she have been deployable? That gets old fast.

  3. Single Guy Says:

    I don't know your work, but 14 years... is that not enough time to be vested for some type of pension? Where I work now, my pension vests after only 5 years (I'm going on year 8 at the moment) If I left now I would get a pension worth about 15% of my current salary when I hit 65. If I left after 14 years I would get close to 30%. Of course I have to help contribute to the pension, so its not all gravy, which may be why this vests after only 5 years.

    BTW, I hope to retire at 20 years with this job. I should have enough in my deferred compensation plans at that point I won't want or need to work (I have just over $200k now, I should have $500k by then, hopefully more).

  4. LittleMsMom Says:

    Single Guy:
    To answer your question no, for this pension you MUST have 20 years either partime or 20 years fulltime UNLESS you are injured at work that results in you unable to continue to do any job with the company then you become elligible for retirement at 15 years, but the payout date would be based on what type of employee you are. We pay nothing in to the pension except "doing our job" so thus the 20 years.

    Creditcardfree: Yes she was deployable. BUT she has not deployed yet in her 14 years. We do have a one year deployment coming up but it falls under a peace keeping mission so it is not like it is a life or death mission. Oh and she would have been on stop loss because of her ETS so technically she would have been elligible for an additional $500 per month for the length of the deployment.

    LuckyRobin: I never got the impression that she even disliked anything about her job. That is why I am just totally shocked.

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