Tradtional vs Portable

[Oldfart]

The main complaint I hear from people is the elimination of the Traditional. I was is the traditional for over 25 years and it topped out at 25. The last few of years didn't do much to improve my payment. My traditional payment will be toughly 2k per month, depending on how I take it. I have no idea how to do the math but I wonder how my return would be if FDX had the Portable the entire time that I was in the Traditional. Putting in the 4 to 8% of my yearly salary, then letting that money grow at 4% each year like the Traditional has from day 1. I have been in the Portable for roughly 12 years and it has grown to right at 100k. If I had over 40 years in the Traditional, I can't help but wondering what my balance would be like. Would it not be more than my Traditional and Portable combined? Someone smarter than me could possibly figure out the difference using the Social Security website to see your salary history.

 

[It will be fine]

The main complaint I hear from people is the elimination of the Traditional. I was is the traditional for over 25 years and it topped out at 25. The last few of years didn't do much to improve my payment. My traditional payment will be toughly 2k per month, depending on how I take it. I have no idea how to do the math but I wonder how my return would be if FDX had the Portable the entire time that I was in the Traditional. Putting in the 4 to 8% of my yearly salary, then letting that money grow at 4% each year like the Traditional has from day 1. I have been in the Portable for roughly 12 years and it has grown to right at 100k. If I had over 40 years in the Traditional, I can't help but wondering what my balance would be like. Would it not be more than my Traditional and Portable combined? Someone smarter than me could possibly figure out the difference using the Social Security website to see your salary history.

Just post your social security number and the login and passwords for all your accounts and I'll figure it out for you.

 

[Meat]

The main complaint I hear from people is the elimination of the Traditional. I was is the traditional for over 25 years and it topped out at 25. The last few of years didn't do much to improve my payment. My traditional payment will be toughly 2k per month, depending on how I take it. I have no idea how to do the math but I wonder how my return would be if FDX had the Portable the entire time that I was in the Traditional. Putting in the 4 to 8% of my yearly salary, then letting that money grow at 4% each year like the Traditional has from day 1. I have been in the Portable for roughly 12 years and it has grown to right at 100k. If I had over 40 years in the Traditional, I can't help but wondering what my balance would be like. Would it not be more than my Traditional and Portable combined? Someone smarter than me could possibly figure out the difference using the Social Security website to see your salary history.

Doesn't the PPP get, like, 1.5 percent interest?

 

[Oldfart]

Just post your social security number and the login and passwords for all your accounts and I'll figure it out for you.

Thanks. I appreciate you doing that. Just send me your cell phone number and I will text it to you. Along with some interesting pics.

 

[Oldfart]

Doesn't the PPP get, like, 1.5 percent interest?

1% per quarter, 4% per year from day 1. Even got 4.25% 1 year. EXCELLENT return. I wish I knew how to get that from some other money.

 

[Meat]

1% per quarter, 4% per year from day 1. Even got 4.25% 1 year. EXCELLENT return. I wish I knew how to get that from some other money.

Interesting.

 

[Oldfart]

Interesting.

Told my financial planner that it was getting 4%, he did everything but call me a liar. Once I showed him a statement, he actually handed me a phone and wanted me to call the Retirement Dept. and ask them where that money was invested. I called and they were very vague in their explanation. You won't get rich with 4% but when you get my age and begin to get more conservative with your investments, that is an excellent number. I plan on taking out 5 to 6% yearly from my 401k upon retirement. If I could get 4% return with no worries, my kids will have a handsome chunk when I pass on.

 

[vantexan]

The main complaint I hear from people is the elimination of the Traditional. I was is the traditional for over 25 years and it topped out at 25. The last few of years didn't do much to improve my payment. My traditional payment will be toughly 2k per month, depending on how I take it. I have no idea how to do the math but I wonder how my return would be if FDX had the Portable the entire time that I was in the Traditional. Putting in the 4 to 8% of my yearly salary, then letting that money grow at 4% each year like the Traditional has from day 1. I have been in the Portable for roughly 12 years and it has grown to right at 100k. If I had over 40 years in the Traditional, I can't help but wondering what my balance would be like. Would it not be more than my Traditional and Portable combined? Someone smarter than me could possibly figure out the difference using the Social Security website to see your salary history.

Under the traditional if your 5 highest years averaged $60k you'd get $30k a year starting at 60. $25.5k at 55. Not hard to do for a topped out courier getting some OT.

You have to have 75 points under the PPP to be in the top bracket. Someone starting at 25 would reach top bracket at 50. At least now they'd top out in 9 years so if getting 6% it's on better money.
The biggest difference between the plans is say someone started with the company at 21. He has 25 credited years in at 46 with a 5 year average of $50k. He decides he'd like to try another career field, or travel, or take care of his elderly parents full-time, or whatever. He'll still get that $25k at 60. Under the PPP he'll need to keep working many more years to accumulate enough to supplement his 401k and Social Security.

You mention you have $100k now. How much money would you need to give you the equivalent of $25k annually? A million dollars at 2.5% interest will generate $25k. $250k at 10% the same. Takes a bit of risk to your principle though to generate 10% and if you get caught on the wrong side of a crash you could lose a lot of principle. Meanwhile under the traditional you still get your $25k. And unlikely most couriers will accumulate $250k or get a 10% return consistently.

 

[vantexan]

Told my financial planner that it was getting 4%, he did everything but call me a liar. Once I showed him a statement, he actually handed me a phone and wanted me to call the Retirement Dept. and ask them where that money was invested. I called and they were very vague in their explanation. You won't get rich with 4% but when you get my age and begin to get more conservative with your investments, that is an excellent number. I plan on taking out 5 to 6% yearly from my 401k upon retirement. If I could get 4% return with no worries, my kids will have a handsome chunk when I pass on.

And you bring up an interesting point. When FedEx established the PPP it was very easy to get more than 4% anywhere. FedEx could have put your contributions in bank CD's and made enough to generate your 4 percent and make a nice profit for themselves. Now no one is paying 4% on secure investments. Is FedEx buying junk bonds to pay the interest? Or is the difference between what they make on secure investments like treasuries and what they pay you being covered by them? And if we get into another bad economic crisis will that jeopardize them keeping the PPP? They are under no obligation to keep it, only pay out what's been accrued so far. Day may come when it's just the 401k. So best idea might be to contribute as much as possible to 401k because you never know.

 

[Oldfart]

Under the traditional if your 5 highest years averaged $60k you'd get $30k a year starting at 60. $25.5k at 55. Not hard to do for a topped out courier getting some OT.

You have to have 75 points under the PPP to be in the top bracket. Someone starting at 25 would reach top bracket at 50. At least now they'd top out in 9 years so if getting 6% it's on better money.
The biggest difference between the plans is say someone started with the company at 21. He has 25 credited years in at 46 with a 5 year average of $50k. He decides he'd like to try another career field, or travel, or take care of his elderly parents full-time, or whatever. He'll still get that $25k at 60. Under the PPP he'll need to keep working many more years to accumulate enough to supplement his 401k and Social Security.

You mention you have $100k now. How much money would you need to give you the equivalent of $25k annually? A million dollars at 2.5% interest will generate $25k. $250k at 10% the same. Takes a bit of risk to your principle though to generate 10% and if you get caught on the wrong side of a crash you could lose a lot of principle. Meanwhile under the traditional you still get your $25k. And unlikely most couriers will accumulate $250k or get a 10% return consistently.

For many, the traditional ended when salaries were nowhere neat 60k. 11 years ago I would imagine I was in the upper 30's maybe, can't remember. The % you built up under the Traditional maxed out at 25 years. The ONLY increase was the 5 best years salary. So the last 11 years and from here on out, my monthly pension MIGHT have increased $300. In the meantime, I have built up a nice Portable. Way more than the $300 increase would have given me.
I will do the math 1 day but I would imagine if I had over 40 years in the Portable and was getting 4% yearly return, I would have to be in the 300k range maybe more. $2000 a month in the Traditional will take close to 15 years to draw the same. If someone offered me $300k today or $2000 a month, I am taking the $300k. If I were not married, the Traditional goes away at my death. The Portable gives you way more flexibility. I know some of my numbers are estimates, but if a person were to put 4 to 8% of his salary into plan and draw 4% yearly for over 40 years, he just might be better off than a plan that maxed out at 25 years.

 

[Oldfart]

And you bring up an interesting point. When FedEx established the PPP it was very easy to get more than 4% anywhere. FedEx could have put your contributions in bank CD's and made enough to generate your 4 percent and make a nice profit for themselves. Now no one is paying 4% on secure investments. Is FedEx buying junk bonds to pay the interest? Or is the difference between what they make on secure investments like treasuries and what they pay you being covered by them? And if we get into another bad economic crisis will that jeopardize them keeping the PPP? They are under no obligation to keep it, only pay out what's been accrued so far. Day may come when it's just the 401k. So best idea might be to contribute as much as possible to 401k because you never know.

According to Bankrate, 2004 was the last year of above 4% CD returns. Since then they have been dropping and are presently below 1%, yet we still get 4%. Like I said, when you get older and want more stability and less risk, 4% is an excellent return. I can draw out 5 or 6% while earning 4%, that makes 401k go a long way as far as years your money will last. I don't want to get 8 or 9% when I retire because that means my money is at risk of being lost. It would be nice to get that return and some of my money will be in riskier investments, but overall, I am going conservative when I retire.

 

[vantexan]

For many, the traditional ended when salaries were nowhere neat 60k. 11 years ago I would imagine I was in the upper 30's maybe, can't remember. The % you built up under the Traditional maxed out at 25 years. The ONLY increase was the 5 best years salary. So the last 11 years and from here on out, my monthly pension MIGHT have increased $300. In the meantime, I have built up a nice Portable. Way more than the $300 increase would have given me.
I will do the math 1 day but I would imagine if I had over 40 years in the Portable and was getting 4% yearly return, I would have to be in the 300k range maybe more. $2000 a month in the Traditional will take close to 15 years to draw the same. If someone offered me $300k today or $2000 a month, I am taking the $300k. If I were not married, the Traditional goes away at my death. The Portable gives you way more flexibility. I know some of my numbers are estimates, but if a person were to put 4 to 8% of his salary into plan and draw 4% yearly for over 40 years, he just might be better off than a plan that maxed out at 25 years.

I was referring to traditional as if we still had it. But I knew of couriers in California making $70k when we had the traditional. Before traditional ended topped out couriers were making over $20hr on lowest payscale. So plenty of topped out couriers in higher payscales working 50+ hrs a week grossed $60k or more.

Also while traditional pensions limited payouts to formula based on 25 years max, they still took your five highest paid years to figure your pension. Thus if you worked 30 years, and your last five years were your highest paid, those were the five years used to figure your highest average annual pay.

 

[vantexan]

According to Bankrate, 2004 was the last year of above 4% CD returns. Since then they have been dropping and are presently below 1%, yet we still get 4%. Like I said, when you get older and want more stability and less risk, 4% is an excellent return. I can draw out 5 or 6% while earning 4%, that makes 401k go a long way as far as years your money will last. I don't want to get 8 or 9% when I retire because that means my money is at risk of being lost. It would be nice to get that return and some of my money will be in riskier investments, but overall, I am going conservative when I retire.

Not sure what you're looking at, but in 2007 you could get 6% or more on one year or longer terms. 5 year CD's went over 7.5% from many banks.

 

[Oldfart]

Not sure what you're looking at, but in 2007 you could get 6% or more on one year or longer terms. 5 year CD's went over 7.5% from many banks.

Historical CD Interest Rates 1984-2016 - Bankrate

According to Bankrate, the last time to get 7% was the early to mid 90's

 

[vantexan]

Historical CD Interest Rates 1984-2016 - Bankrate

According to Bankrate, the last time to get 7% was the early to mid 90's

Just did some quick googling, average 5 year CD rates in 2006-2007 were around 5.7%. But more was certainly offered by some. I used to read Money and Kiplinger's and they posted monthly best CD rates around the country. Capital One, among others, used to pay very well and not long before the crash saw 7.8% from one bank. And we're talking CD's. FedEx could have made serious money from other investments like REIT's.

 

[Oldfart]

Just did some quick googling, average 5 year CD rates in 2006-2007 were around 5.7%. But more was certainly offered by some. I used to read Money and Kiplinger's and they posted monthly best CD rates around the country. Capital One, among others, used to pay very well and not long before the crash saw 7.8% from one bank. And we're talking CD's. FedEx could have made serious money from other investments like REIT's.

I guess the chart I put up from Bankrate was incorrect. Bankrate chart said one thing, you said another. I always knew one of the leading money websites like Bankrate was usually wrong.

 

[vantexan]

I guess the chart I put up from Bankrate was incorrect. Bankrate chart said one thing, you said another. I always knew one of the leading money websites like Bankrate was usually wrong.

Bankrate most certainly is right. But it's an average. Some banks pay more, and when the real estate market was going through the roof quite a few paid more to compete for investors.

 

[Route 66]

Everybody!, I just had this really bizarre dream that oldfart and van were engaged in a lengthy rational discourse.

Must've been the Ambien.

 

[Oldfart]

Everybody!, I just had this really bizarre dream that oldfart and van were engaged in a lengthy rational discourse.

Must've been the Ambien.

I prefer 1980's era quaaludes.

 

[Meat]

Everybody!, I just had this really bizarre dream that oldfart and van were engaged in a lengthy rational discourse.

Must've been the Ambien.

It's not surprising. If you haven't noticed, old dudes like to pretend that they know a lot about specific subjects, depending on what ever factually inaccurate article they happened to have read on the internet on that particular day. From what I have seen, with dudes, it's an inevitability of aging; I'm not looking forward to it.