[quote=no_such_reality]Yep, at 55, figured at 3% a year of their highest years wages less some things. So when you look at that firefighter with a $140,000 a year in income, how much of that qualifies for the 3% a year. If they retire at 55 having started at 25, that’s 90%. 90% of $140,000 is $126,000/yr. At 55, CalPers says they’ll live to 87 based on current retirees. That’s another 32 years…[/quote]
And how did he manage to get this pension? By contributing to his pension plan for 30 years. If he had started with $80,000 a year and $2000/year raises, he contributed 7% of his pretax salary to a 401k, his employer matched the contribution, and the 401k averaged the same rate of return (7.75%) as CalPers, he would have had approximately $1.5 million in the pension fund. Which, again assuming continued 7.75% rate of return in the future, would have lasted him till 83 or so with $126,000/yr annual withdrawals.
By the way, where did you get 87? The 2005 United States life table shows the life expectancy of a 55-year-old to be 26 to 27 years.
