Look, nobody can plan for every contingency but a diversified portfolio can handle anything. I never believe a single entity whether it is the state or feds or company when they say something is guaranteed. Not gonna happen. The examples I used were all people from different walks of life. My father worked for a large company, 1 grandfather was self employed and the other grandfather has worked a number of jobs to get by and provide for his family. All of them, (even the 2 world war 2 vets), worked with the concept that the federal government is not and will not be the sole provider for their livelihood following retirement.
I don't care how "fair the pension is" I am not going to count on that. Could the economy bomb out? Sure. And my investments are currently in higher risk and will be moving to moderate risk to finally a low risk at retirement. It's not rocket science. All of your scenarios still put someone else in control and that was my whole point.
As for your economy statement - well all I know is that I am richer now than I was 30 years ago and my parents are richer now than they were 30 years ago so maybe the economy isn't as bad as you think....
Adult, "comes of age" in the 1950s. Works for 35 years for XXX Megacorp. Retired in 1990.
XXX is then bought out by XYZ corporation, who refuses to honor pensions that were guaranteed by XXX corp. Said adult paid for 35 years into a pension that is now going to dry up on them. Is that the fault of the retiree?
Adult pays into Social Security their entire life after being told that their "retirement" will be available in SS when they reach the appropriate retirement age. Can said adult live comfortably for the rest of their life?
Teacher pays into TRS in the late 1960s, 1970s, 1980s, and 1990s. Teacher retires. Teacher heard for thirty five or more years that "TRS income is guaranteed" and that it was a "fair pension" so they did not invest a ton of additional money, but money was invested in what looked like quality stocks and pensions. When teacher retires, the TRS is sufficient to live upon, and stock money is not touched.
Economic downturn occurs. Mortgage crisis. Rapid inflation. Dot-com bubble. All of the money invested in stock market disappears. Retiree is now upside-down in equity in their house. Retiree is now making half in real wages what they made when they retired. (Cost of living adjustments make real wages about 2/3 what they are today, to say nothing of increased healthcare costs)
You can talk all you want about "plan better" but the fact of the matter is, our economy has been systematically destroyed over the past thirty years. Both political parties are responsible.
I hope for your sake that you have the money in no-risk and low-risk funds and accounts, and not in anything that may up and vanish on you like Enron stock. Your money can vanish, too.
It is EXACTLY an entitlement that you expect to obtain things that you are entitled to. Why is that such a bad thing? If you're told "You will earn X salary" and you don't earn that salary, you'd complain too, because you're ENTITLED to your salary. Retirement is the exact. same. thing.
I'm going to approach this in pieces. The first part is a good question. The problem is in how most people will answer and in fact, what is implied.
"You need to ask yourself, ‘who decides if I get a cost of living raise when I am retired"
ME! I decide if I get a cost of living raise. Pure and simple. TRS is not my primary retirement. My retirement will come from multiple sources that I CONTROL and thus, I will be the deciding factor in earning more than the state of Texas tells me I get to. If TRS is your only source of income then don't be surprised that you don't have as much control as you would like.
"This must change and only the people of Texas – and especially teachers in Texas – can change this total lack of concern about how, or even if, a retired teacher can pay their electric bill or put food on the table."
At the point you retire you are a grown adult. You have at least one college degree and years of life experience. It should not be MY concern about YOUR household just like my household shouldn't be your concern. The sense of entitlement in that statement is astounding. Who makes sure my father, now retired, can put food on his table, (he wasn't a teacher)? Who makes sure my grandfather can put food on his table, (also not a teacher)? Who made sure my other grandfather, (also not a teacher and self employed) was able to eat and get his medicines? Maybe that's why I have the opinions I have, (which aren't always popular in the teacher's lounge).
Be independent and DON'T rely on someone else, especially a government entity, to provide for you. Provide for yourself. Plan ahead. Live below your means now so that you don't have to worry about food and electricity later. I am not without compassion. Let's save the resources and the help for those that TRULY need it. There are people that really need the help. As educators making good money, let's be good stewards with what we have and take care of ourselves.
I agree with those who have agreed before me.
I ask this question, of course, knowing that answer. I retired in 2001, so it has been 17 years. TRS is, as I have read, one of the most fiscally viable retirement systems in the country – not just Texas mind you – but the country.
However, in the 17 years TRS members have not received one dollar raise or cost of living adjustment. In fact, a few years ago my TRS check was reduced by about $60.00 and then the first of this year it was reduced by $82.52. Now that is not a great deal of money ($990.24 over the year), however, tack that on to the $60.00 reduction (tax increase) and it comes to several thousand dollars over the years.
Those of you that are retired know this all too well. Those of you still working and looking for that day you can retire and “enjoy life after the class room”, need to know that your current politicians could really care less about if you eat or not when you are old.
I know, I do not want this to be a political post because I HATE to read them here, however, this is a ‘teachers’ board and how you are treated after you give the State of Texas 30 or more years of your life and skill – really need to know the reality of being a retired teacher in Texas.
You need to ask yourself, ‘who decides if I get a cost of living raise when I am retired’ and you need to become politically active. Just think what you paid 17 years ago for bread, fruit, cars, electric, cloths… anything! This must change and only the people of Texas – and especially teachers in Texas – can change this total lack of concern about how, or even if, a retired teacher can pay their electric bill or put food on the table.
This is a serious problem and an important aspect of being a teacher. I could NEVER recommend to a student that they become a teacher knowing what I know now.
What is the problem with one of the richest retirement systems in the country giving their ‘members’ a basic cost of living increase? I have been retired long enough to have seen the thousands of dollars raise that our politicians gave themselves several years ago. And, I have lived long enough to have to take a job at 70 plus years, to make up for inflation!