Row 4686

Row ID: 4686 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 4686 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

Hello all. After reading this and the personal finance subreddit over the years I have become familiar with the general retirement advice that you should invest 15% of your income in low cost index funds, hope for a 7% inflation adjusted return rate over 30+ years, and you might be able to withdraw about 4% annually safely in retirement.

However, I work for the State of Arizona that uses a pension system where I never vest into my employer match unless I leave it until retirement and opt into the system/pension annuity. I am required to put 12% of my paycheck into the system which my employer matches 100%. So for my income of 100k, I "get" $24k into the pension, though as I mentioned I can never access the match for say a 401k or IRA rollover.

The tricky part comes from the fact that the pension annuity is calculated not off the total $ amount but a weird formula: "multiplying your total years of service with ASRS covered employment by your average monthly compensation and by a multiplier factor depending on years of service."

For example if I stay with ASRS for 30 years I would get (10 years*(100k/12 months)*0.021 multiplier)= 1750/month or $21,000 a year. This only replaces 21% of my income which isn't ideal. The math shakes out better the longer I stay and reaches 69% if I stay 30 years.

Given I do not know if I will stay employed with the State of Arizona my entire 30+ year career, how can I save the recommended 15%? I can't just add 3% in an IRA since my remaining 12% is locked in a pension not earning the inflation adjusted 7% one could hope for from low cost index funds that track the market or a target date fund.

Any advice on how to figure out if I am on track with my current 12% pension contribution and how much more in addition I need to place in an IRA or 479b to get me to the ideal 15% recommendation? Thank you.

FieldValue
text Hello all. After reading this and the personal finance subreddit over the years I have become familiar with the general retirement advice that you should invest 15% of your income in low cost index funds, hope for a 7% inflation adjusted return rate over 30+ years, and you might be able to withdraw about 4% annually safely in retirement. However, I work for the State of Arizona that uses a pension system where I never vest into my employer match unless I leave it until retirement and opt into …
label r/investing
dataType post
communityName r/investing
datetime 2024-04-20
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url_encoded Z0FBQUFBQm5Lak9GMElFU3pWWHFUUENnZXd2cDN1dlpKVU5rSm91dFFVVk4tR2JydUgyOHFhZi1TbTRtNUZLQXdZQTlIYkw2ZlNFd1g2NFpJNEpwSUhwVWFBZG9BQlRObGlsbHhvNHJ1Z2M0b3dOclBpU1ZId0lOc1NrNnpGZ1hjcm9TR0FKeFlobGp5VWZrMlFvcnU4U0pUY2ZNdEFUX19veHdwQU9qTTFnY3lxSFZaaEVaMVZGVzFDVXZTdjVWeWJySW8zaWp4ZHphZkRQUXA3dEwxWXBvWHBJaHNtMWxZQT09

Raw Record

{
  "text": "\nHello all. After reading this and the personal finance subreddit over the years I have become familiar with the general retirement advice that you should invest 15% of your income in low cost index funds, hope for a 7% inflation adjusted return rate over 30+ years, and you might be able to withdraw about 4% annually safely in retirement. \n\nHowever, I work for the State of Arizona that uses a pension system where I never vest into my employer match unless I leave it until retirement and opt into the system/pension annuity. I am required to put 12% of my paycheck into the system which my employer matches 100%. So for my income of 100k, I \"get\" $24k into the pension, though as I mentioned I can never access the match for say a 401k or IRA rollover.  \n\nThe tricky part comes from the fact that the pension annuity is calculated not off the total $ amount but a weird formula: \"multiplying your total years of service with ASRS covered employment by your average monthly compensation and by a multiplier factor depending on years of service.\"\n\nFor example if I stay with ASRS for 30 years  I would get (10 years*(100k/12 months)*0.021 multiplier)= 1750/month or $21,000 a year. This only replaces 21% of my income which isn't ideal. The math shakes out better the longer I stay and reaches 69% if I stay 30 years.\n\nGiven I do not know if I will stay employed with the State of Arizona my entire 30+ year career, how can I save the recommended 15%? I can't just add 3% in an IRA since my remaining 12% is locked in a pension not earning the inflation adjusted 7% one could hope for from low cost index funds that track the market or a target date fund. \n\nAny advice on how to figure out if I am on track with my current 12% pension contribution and how much more in addition I need to place in an IRA or 479b to get me to the ideal 15% recommendation? Thank you. ",
  "label": "r/investing",
  "dataType": "post",
  "communityName": "r/investing",
  "datetime": "2024-04-20",
  "username_encoded": "Z0FBQUFBQm5LakwxeTNIeTdZMWdhTFdNT18za0N5QW1SYWIyX1ozUzFGTmZzOVRxaDVDV3duNjJiQ0haeW1lVVgyWS1RZVFZT1NWOXNtTG5NRFhKZzg3bmlENVNDVExhV2RScXB1bm9WMWZfUE90REF1ZmJWQms9",
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}
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