Hi everyone, I am almost 32 years old, and work for a local government. I make only around $23,000 a year. I have a defined benefit plan through Oklahoma municipal retirement fund, which I think is in good shape long term. I get 2.75% of average pay for each credited year. I am also vested in a defined benefit plan through Hertz, and will get around $349 a month at full retirement age, if the plan is still solvent by then. this fiscal year, my employer is also offering a defined contribution plan that i can enroll in, in addition to the defined benefit plan. My question is, do i need to enroll in that plan also? Im not sure yet what type of plan it will be, or if there will be a matching contribution.
Sat Aug 20, 2016 3:10 pm
oldguy Senior Member
Cash: $ 715.00
Joined: 21 May 2006
Personally, I would minimze the annuity plans and switch priority to the the defined contribution. The reason is that the annuities won't give you much retirement money. Eg, that $349/m annuity in 2046 probably won't be enough to put gas in the car. Same with the pension annuity at 2.75% build-up, you'll need to work 36 yrs to get your final salary.
Will you get SS? That is a good annuity because it is one of the few annuities that increases with inflation.
But in general, the defined contribution plan is the way to build wealth. Eg, if you put $400/m into the Plan for 30 yrs, and select a generic stock index fund (SP500) that averages 11%/y you'll have close to a million at age 62.
Sat Aug 20, 2016 3:28 pm
kforbes862 New Poster
Cash: $ 0.45
Joined: 20 Aug 2016
I will get social security also, latest estimate is $1,056 a month, which may change over the years. My plan is to build a small home on land I own in another country before retiring there.