Research conducted by Andrew Biggs of the American Enterprise Institute indicates that some of those millionaires who live next door are retired full-career public servants who's retirement lifestyle is funded by their state pension plans.
Many full-career public employees receive very generous pensions. For example:
Some full-career public service employees don't receive generous pensions. For example:
So, the average state's annual pension benefits for full-career retirees amounts to $36k+.
BUT...the cost of living varies from state to state and some state employees do not receive Social Security benefits. So, Biggs examined total retirement income (pension benefits as well as Social Security) for full-career state employees. He then compared that figure with the earnings of full-time employees in each state.
- In the average state, the typical full-career government employee has a retirement income higher than 72% of full-time employees working in that state.
- Oregon full-career state employee retirees average benefits greater than the earnings of 90% of full-time employees in Oregon. West Virginia's were 89%, while California and Nevada both were 87%+.
One note: These may be "low ball" figures because some retirees may also receive interest or dividend income from personal savings. In addition, most public retirees also receive free healthcare coverage. And, that's to say nothing about the fact that the cost of living for retirees tends to be lower on average than the cost of living for working-age Americans.
The total benefits paid out to full-career public service retirees over the course of their retirement indicates that many states actually have created "pension millionaires" who earn $1M+ in retirement benefits. Alaska, California, Colorado, Connecticut, Nevada, Oregon, Pennsylvania, and West Virginia lead the pack with Rhode Island and Texas not far back. The average career retiree receives a lifetime retirement benefit worth $768k+.
Then, Biggs notes, there's the astounding claim made by the American Federation of State, County, and Municipal Employees (AFSCME): The average AFSCME member receives only $19k/year after a public service career.
BUT...to arrive at this number, Biggs notes, AFSCME includes short-term government employees.
The end of the story?
The nation's middle class taxpayers--the so-called "99%"--who are scraping to get by on their retirement savings and pensions have created all of those millionaires next door--the so-called "1%"!
Talk about "income inequality" all he wants, those next door neighbors aren't the people President Obama is castigating from his Bully Pulpit. No, they're standing behind, applauding, and cheering for him in all of those photo ops!
Come to think of it, why would any young person go to college and incur all of that debt if all that individual had to do is to work for the government to become a millionaire next door?
Let the discussion begin...
To read Andrew Biggs' article, click on the following link:
"Not So Modest: Pension Benefits for Full-Career State Government Employees."