Tuesday, January 28, 2014

Case Study of West Warwick Pvt vs Public Employee

The page below is  a calculation of how a demographically determined Private Sector worker in West Warwick Rhode Island pensions compare the average active  Public Employee in West Warwick.


so above is a link to figure out the value of the pension employees are expecting to receive
 ...this is real data as issued Jan 13 2014 and using current annuity quotes. 
test it for yourself..
   demographic of active West Warwick public Employee
Retirement Contributions by employee
 career until age 65 *

Value of Pension
At retirement
1.8 factor
6.7% rate
Annual Pension Income Replacement  
West Warwick Public   Employee
 Age 45

 with 11.8 years of service


Annuity value
$ 1,048,608
  80 % +cola
Private Sector Worker  S.Sec only

   age 40 

assume working since 28 


$ 61,742
(($42,399+$20,250)/2) age 65 input to SSA
$ 1037*12


Annuity Value
$ 192,871



 Conclusion: Public employees in West Warwick  1) earn more than twice the median income of other residents in that town. 2) Public employees contribute 3 times as many dollars in their Career for pension and receive 5 times as much value  in retirement. 3) Social Security private sector workers replace only 29% of pre-retirement income while Public Sector workers replace up to 80% of highest salary

inputs  monthly income raised 3% annually until age 65  final payout 80% highest salary did not include colas
http://www.ssa.gov/retire2/AnypiaApplet.html       inputs  current income raised 3% annually until retirement  produces monthly benefit    $ 1037

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