Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I think you need to sit down and work through a number of different financial scenarios to make a decision, even if they are somewhat off base.

The real advantage to a government pension is that the state is footing the risk- and they have a lot of guns and manpower to enforce taxation in the future even if your other investments go south. That is to say, it introduces another uncorrelated asset class into your retirement picture, which is very good.

How good? That is a tough question. If it is an inflation indexed pension, then I would estimate it to be worth 20-25x the annual income, at least. So lets say it was worth $10,000 a year for life. This would be worth around $200-$250,000 of assets in the bank. However, I have to think it is in reality worth a bit more than this, possibly up to $500,000 in the bank simply because it won't "deplete" if you live to be 100 and have unusual financial turbulence in the next fifty years, which could wipe out other investment classes. (An annuity from a private held company could go bust if their underlying investments tank- but a government pension, as I mentioned, is free from this worry).

I think of higher priority than this is access to a reasonable cost health care plan. Why do I think this is more important? Because I have a friend who literally must pay $36,000 a year for health care. This would blow through your asset base fast, so you would be better of hedging against this possibility with a job which gave you access to a health care plan with guaranteed rates. If a normal health care plan ran you $10,000 a year and you suddenly have to come up with $26,000 a year looked at in the same light this is a potential cost of an asset base of $650,000.

So those are some things to consider. Personally I think a 90 minute commute blows and I'd rather be poor or work an extra 5 years than commute on that hell track. Plus it seems if a major terrorist attack were to occur they would probably attack DC, so that is another knock against it.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.