Property Tax Increase

[BCClone]

IPERS is a glorified Social Security that somebody, who isn't the employees, is making money off somewhere. My wife plans to retire when she hits rule of 89. At that point, she will receive 2k/month (at least that is being hopeful, the amount keeps getting smaller every year in their brochure). If she would have taken the money that was placed into IPERS for her and rolled 7% return over those years, and figure 5% for a conservative investment when she retires, she would have 2750/month just off interest. Would have principle to pass to the kids for inheritance.

She will get a 20% haircut in monthly payments and have nothing left when she passes.

 

[SEIOWA CLONE]

I have been emailing both my local rep. in the house and senate today, both did respond. And they made the exact same quotes, "it will not harm IPERS, this has nothing to do with IPERS". That is a total lie, this bill will put cities and schools into a straight jacket on future finical items. There was an amendment that was going to be added to the bill last night, but it was voted down. That amendment would have taken IPERS out of the equation.

The Iowa GOP is following the advise of ALEC, this bill is working its way through many midwestern states, all the bills are almost exactly the same, basically word for word.

In a couple of years, local governments and schools will be struggling for funds, and without the ability to pass property tax increase, will be forced to go to the state, and have them fix it. Then the GOP will say, "they do not want to change IPERS from a defined benefits package to a 401K package" but will be forced too, to keep the program solvent.

This has been the GOP plan along, they will just have to wait a few more years. Illinois did the same thing a few years ago, and now they are broke. When the change over occurs to a 401K type of program, the young employees are no longer paying into the retirement system, so when that money runs outs, its estimated in Iowa that would take 15 years or so. Then the government has a choice, offer a buyout to the retired or increase taxes to cover them.

Which do you think the GOP will do? Bad day to be an IPERS worker like myself, and I have 30 years in, so I could be basically screwed here down the road.

 

[Trice]

IPERS is a glorified Social Security that somebody, who isn't the employees, is making money off somewhere. My wife plans to retire when she hits rule of 89. At that point, she will receive 2k/month (at least that is being hopeful, the amount keeps getting smaller every year in their brochure). If she would have taken the money that was placed into IPERS for her and rolled 7% return over those years, and figure 5% for a conservative investment when she retires, she would have 2750/month just off interest. Would have principle to pass to the kids for inheritance.

She will get a 20% haircut in monthly payments and have nothing left when she passes.

Defined benefit pensions have their pros and cons, but in exchange for the cons you get guaranteed income for life regardless of market conditions. She could save up all that money in a defined contribution plan, and if the market nosedives when she retires she still might not have enough to live on for 30 years let alone pass anything down.

 

[EnhancedFujita]

I have been emailing both my local rep. in the house and senate today, both did respond. And they made the exact same quotes, "it will not harm IPERS, this has nothing to do with IPERS". That is a total lie, this bill will put cities and schools into a straight jacket on future finical items. There was an amendment that was going to be added to the bill last night, but it was voted down. That amendment would have taken IPERS out of the equation.

The Iowa GOP is following the advise of ALEC, this bill is working its way through many midwestern states, all the bills are almost exactly the same, basically word for word.

In a couple of years, local governments and schools will be struggling for funds, and without the ability to pass property tax increase, will be forced to go to the state, and have them fix it. Then the GOP will say, "they do not want to change IPERS from a defined benefits package to a 401K package" but will be forced too, to keep the program solvent.

This has been the GOP plan along, they will just have to wait a few more years. Illinois did the same thing a few years ago, and now they are broke. When the change over occurs to a 401K type of program, the young employees are no longer paying into the retirement system, so when that money runs outs, its estimated in Iowa that would take 15 years or so. Then the government has a choice, offer a buyout to the retired or increase taxes to cover them.

Which do you think the GOP will do? Bad day to be an IPERS worker like myself, and I have 30 years in, so I could be basically screwed here down the road.

I feel for you man, that's a long time to count on something and have it screwed over. I'm only 13 years in, so conceivably I can start adding a lot more to my other retirement savings, but the assumption was always that IPERS was going to be a main component. Plus, to add more into another retirement fund means I'm just eating into my disposable income that I need.

 

[BCClone]

Defined benefit pensions have their pros and cons, but in exchange for the cons you get guaranteed income for life regardless of market conditions. She could save up all that money in a defined contribution plan, and if the market nosedives when she retires she still might not have enough to live on for 30 years let alone pass anything down.

It would need to take a 25% permanent nosedive at retirement to even equalize the example I gave. Besides, do you expect to live on 24,000/year? IPERS will equate to 40% of her income upon her retirement. Her investments annually are less than the 15-16% that goes into IPERS and she has been contributing for a shorter period into them. IPERS is basically a bad annuity. It's good for those you can't handle money at all, but a bad deal for anybody who has any economic sense.

 

[EnhancedFujita]

It would need to take a 25% permanent nosedive at retirement to even equalize the example I gave. Besides, do you expect to live on 24,000/year? IPERS will equate to 40% of her income upon her retirement. Her investments annually are less than the 15-16% that goes into IPERS and she has been contributing for a shorter period into them. IPERS is basically a bad annuity. It's good for those you can't handle money at all, but a bad deal for anybody who has any economic sense.

However, as a government employee I was automatically enrolled into it and contribute 7% of my income to it. It is what it is, but I shouldn't have my required contribution put at risk. It'd be entirely different if my employer provided multiple options and I chose this. As it stands now, I'll have to spend even more to save for retirement to make up for the IPERS uncertainty.

 

[BCClone]

However, as a government employee I was automatically enrolled into it and contribute 7% of my income to it. It is what it is, but I shouldn't have my required contribution put at risk. It'd be entirely different if my employer provided multiple options and I chose this. As it stands now, I'll have to spend even more to save for retirement to make up for the IPERS uncertainty.

Did you read the part where you can opt out of IPERS if you did it either immediately or in the first few months? My wife was teaching and stuck before we met, otherwise she would have some confused people as to why she walked away from the 9% or so employer match and invested outside .

 

[Trice]

It would need to take a 25% permanent nosedive at retirement to even equalize the example I gave. Besides, do you expect to live on 24,000/year? IPERS will equate to 40% of her income upon her retirement. Her investments annually are less than the 15-16% that goes into IPERS and she has been contributing for a shorter period into them. IPERS is basically a bad annuity. It's good for those you can't handle money at all, but a bad deal for anybody who has any economic sense.

So basically everybody, then? Listen, I agree that there are a lot of downsides to a pension like IPERS. Probably the biggest one that you didn't even mention is that as bad off as you think your wife will be, it's even worse for people who won't spend their careers in the system because they don't get the benefit of years of vesting/service so they'll only get a fraction of their benefit.

But more and more research is concluding that the 401(k) system that the US stumbled into accidentally is far more damaging to the retirement savings and quality of life of Americans than the pension system. There's a reason Social Security is really popular and (unfortunately) the centerpiece of a lot of people's retirement plans, to the extent many even have a plan at all.

 

[BCClone]

So basically everybody, then? Listen, I agree that there are a lot of downsides to a pension like IPERS. Probably the biggest one that you didn't even mention is that as bad off as you think your wife will be, it's even worse for people who won't spend their careers in the system because they don't get the benefit of years of vesting/service so they'll only get a fraction of their benefit.

But more and more research is concluding that the 401(k) system that the US stumbled into accidentally is far more damaging to the retirement savings and quality of life of Americans than the pension system. There's a reason Social Security is really popular and (unfortunately) the centerpiece of a lot of people's retirement plans, to the extent many even have a plan at all.

Everybody, yeah that is way off. I think there are a good portion of people out there that are better with their money than people say. Many of my wife's co-workers have been fed the standard line of IPERS that you don't have to worry about retirement because you have IPERS. Not surprisingly, many go back to work as soon as they can and complain about IPERS not being enough for them to live on.

Now in regards to what you say is the biggest one, I don't see it that way. I say someone who spent 10 years in the IPERS system and then got out and starting putting away and understanding what they truly need to live on is better off anyhow.

I'm 47, most of the people who I am friends with say, I don't expect anything from SS and if I do, it will just be some fun money. Doesn't sound like it's that popular of a program to people I know. People who are younger than me that I speak with never mention SS. I did the math on that, and I need to live into my 90s just to get my contributions back, not with interest, just contributions. I grew up through the farm crisis with parents who grew up in the depression. They taught me to just put a little away all the time and not need new stuff all the time and things will be ok. Money management is not hard, unfortunately many people just prefer to let someone else handle stuff for them.

 

[ArgentCy]

Wow, fake news much. The IPERS shortfall was a legislation created problem in the early 2000s. A rate change was needed and the legislature voted it down, leading to the shortfall. They finally passed a reform in 2012 that set a course to erase the shortfall, but those things take time.

It isn't going to work. A bandaid at best. The Demographics simply don't work.

 

[ArgentCy]

The stupid thing is that even the property tax side of things just isn't necessary. So now a growing community attracts a large value tax payer (say like Microsoft Data Center) that raises the tax growth of the community higher than 2%. In the current situation, the City can just use those new dollars to provide needed services to their community (or sometimes they even use that to lessen residential taxes, yes it does happen).

Well now, they are capped at 2% unless they can pass a super majority vote. You'd expect that to happen but its not guaranteed. So now the City can't use that new revenue to pay for services. I guess all those Facebook posts I saw this winter about people hating potholes were all facetious, cause this is how you end up with lots of systemic problems and no revenue to fix them.

That depends upon the specific wording in the bill. I highly doubt it caps the Gross Tax Revenue for any growth in the city. I suspect, but haven't read the bill, that it caps any Rate increases at 2%. Those are very different things.

 

[ArgentCy]

The stupid thing is that even the property tax side of things just isn't necessary. So now a growing community attracts a large value tax payer (say like Microsoft Data Center) that raises the tax growth of the community higher than 2%. In the current situation, the City can just use those new dollars to provide needed services to their community (or sometimes they even use that to lessen residential taxes, yes it does happen).

Well now, they are capped at 2% unless they can pass a super majority vote. You'd expect that to happen but its not guaranteed. So now the City can't use that new revenue to pay for services. I guess all those Facebook posts I saw this winter about people hating potholes were all facetious, cause this is how you end up with lots of systemic problems and no revenue to fix them.

If you need 2% MOAR every year just to fix potholes you are doing a very poor job.

 

[Trice]

Everybody, yeah that is way off. I think there are a good portion of people out there that are better with their money than people say. Many of my wife's co-workers have been fed the standard line of IPERS that you don't have to worry about retirement because you have IPERS. Not surprisingly, many go back to work as soon as they can and complain about IPERS not being enough for them to live on.

Now in regards to what you say is the biggest one, I don't see it that way. I say someone who spent 10 years in the IPERS system and then got out and starting putting away and understanding what they truly need to live on is better off anyhow.

I'm 47, most of the people who I am friends with say, I don't expect anything from SS and if I do, it will just be some fun money. Doesn't sound like it's that popular of a program to people I know. People who are younger than me that I speak with never mention SS. I did the math on that, and I need to live into my 90s just to get my contributions back, not with interest, just contributions. I grew up through the farm crisis with parents who grew up in the depression. They taught me to just put a little away all the time and not need new stuff all the time and things will be ok. Money management is not hard, unfortunately many people just prefer to let someone else handle stuff for them.

1. I can't speak to your wife's co-workers because I don't know what they make, what they spend, when they retired, what their benefits are, and so on. I know many do fine on IPERS, especially when Social Security is added in, so mileage varies.

2. If you dislike IPERS so much, it seems odd to suggest that someone who spends 10 years in the system, and then walks away with less than what they put in and less experience managing their savings because they haven't had to do it, is actually better off. My broader point was IPERS is okay if you spend your career in it, but if you aren't in it for many years the benefits drop off pretty significantly.

3. You should do more research on Social Security. Somewhere this idea took hold that it's going to end, and that isn't true. If it continues without any changes, benefits will need to be reduced, but it's somewhere in the neighborhood of 20-25% after 2035. (Of course, Republicans would be happy to do away with Social Security, just like they would with IPERS, so you can't rule anything out.) You might plan well enough to not rely on it, and good for you if you don't. But for a huge number of people it's all they've got.

 

[ArgentCy]

I have been emailing both my local rep. in the house and senate today, both did respond. And they made the exact same quotes, "it will not harm IPERS, this has nothing to do with IPERS". That is a total lie, this bill will put cities and schools into a straight jacket on future finical items. There was an amendment that was going to be added to the bill last night, but it was voted down. That amendment would have taken IPERS out of the equation.

The Iowa GOP is following the advise of ALEC, this bill is working its way through many midwestern states, all the bills are almost exactly the same, basically word for word.

In a couple of years, local governments and schools will be struggling for funds, and without the ability to pass property tax increase, will be forced to go to the state, and have them fix it. Then the GOP will say, "they do not want to change IPERS from a defined benefits package to a 401K package" but will be forced too, to keep the program solvent.

This has been the GOP plan along, they will just have to wait a few more years. Illinois did the same thing a few years ago, and now they are broke. When the change over occurs to a 401K type of program, the young employees are no longer paying into the retirement system, so when that money runs outs, its estimated in Iowa that would take 15 years or so. Then the government has a choice, offer a buyout to the retired or increase taxes to cover them.

Which do you think the GOP will do? Bad day to be an IPERS worker like myself, and I have 30 years in, so I could be basically screwed here down the road.

The property taxes here are ALREADY at the max level allowed by the state and nearly on par with New Jersey in the 2.5% range. It's out of control and a big reason I'm not going to buy a house here.

 

[ArgentCy]

So basically everybody, then? Listen, I agree that there are a lot of downsides to a pension like IPERS. Probably the biggest one that you didn't even mention is that as bad off as you think your wife will be, it's even worse for people who won't spend their careers in the system because they don't get the benefit of years of vesting/service so they'll only get a fraction of their benefit.

But more and more research is concluding that the 401(k) system that the US stumbled into accidentally is far more damaging to the retirement savings and quality of life of Americans than the pension system. There's a reason Social Security is really popular and (unfortunately) the centerpiece of a lot of people's retirement plans, to the extent many even have a plan at all.

Of course its more popular. It was never sustainable without significantly more employees than retirees. That is why the private sector dumped them decades ago.

 

[BCClone]

1. I can't speak to your wife's co-workers because I don't know what they make, what they spend, when they retired, what their benefits are, and so on. I know many do fine on IPERS, especially when Social Security is added in, so mileage varies.

2. If you dislike IPERS so much, it seems odd to suggest that someone who spends 10 years in the system, and then walks away with less than what they put in and less experience managing their savings because they haven't had to do it, is actually better off. My broader point was IPERS is okay if you spend your career in it, but if you aren't in it for many years the benefits drop off pretty significantly.

3. You should do more research on Social Security. Somewhere this idea took hold that it's going to end, and that isn't true. If it continues without any changes, benefits will need to be reduced, but it's somewhere in the neighborhood of 20-25% after 2035. (Of course, Republicans would be happy to do away with Social Security, just like they would with IPERS, so you can't rule anything out.) You might plan well enough to not rely on it, and good for you if you don't. But for a huge number of people it's all they've got.

Never said SS is going to end. We just don’t expect anything because what we will get will be fairly insignificant compared to other retirement and savings. Using a theory of don’t count on it and it will be a pleasant surprise whatever you get.

For 2. It’s good to know that we agree the Employer portion is a benefit that the employer pays instead of salary to you. I may be off but in that situation you would get what is designated as employee contribution and 3% per year of what is considered employer match plus respective interest. I feel that while the person is in their early 30s they have ample opportunity to get their ducks in a row and straightened out. Hopefully they invested outside IPERS and they are some more set aside.

 

[SEIOWA CLONE]

Did you read the part where you can opt out of IPERS if you did it either immediately or in the first few months? My wife was teaching and stuck before we met, otherwise she would have some confused people as to why she walked away from the 9% or so employer match and invested outside .

The only people that can opt out are part time elected mayor or city council or other positions, judges, city administrators, boards ect. Your basic regular employee, hired by a school or city is NOT ALLOWED to opt out in the state of Iowa.

According to my wife, our asst. city clerk, the employee puts in 6.29% of their salary, and the school or town puts in 9.44% for a total of 15.73% towards retirement.

BCClone, if your wife is bringing home less than 2 grand a month, then one of two things happened, she either did not get in the full 30 years or will not reach her 62/20 rule, or she did not make much in salary. Therefore she will not be getting much back.

My five year average which is used to figure my return is around $55,000, I am eligible to receive right at $2,830 a month for life before taxes right now after 30 years. If I max out for the full 35 years, it would only bump it up another $200 a month.

Everybody, yeah that is way off. I think there are a good portion of people out there that are better with their money than people say. Many of my wife's co-workers have been fed the standard line of IPERS that you don't have to worry about retirement because you have IPERS. Not surprisingly, many go back to work as soon as they can and complain about IPERS not being enough for them to live on.

Now in regards to what you say is the biggest one, I don't see it that way. I say someone who spent 10 years in the IPERS system and then got out and starting putting away and understanding what they truly need to live on is better off anyhow.

I'm 47, most of the people who I am friends with say, I don't expect anything from SS and if I do, it will just be some fun money. Doesn't sound like it's that popular of a program to people I know. People who are younger than me that I speak with never mention SS. I did the math on that, and I need to live into my 90s just to get my contributions back, not with interest, just contributions. I grew up through the farm crisis with parents who grew up in the depression. They taught me to just put a little away all the time and not need new stuff all the time and things will be ok. Money management is not hard, unfortunately many people just prefer to let someone else handle stuff for them.

I know many educators that when they reach 62 and start drawing SS, are making more between IPERS and SS then they were while teaching. That is before and after taxes are paid.

If I get hit by a truck tomorrow, my wife would collect right at $278,000 from what I have in IPERS right now, to say that its a poor program is grossly uneducated.

 

[ArgentCy]

The only people that can opt out are part time elected mayor or city council or other positions, judges, city administrators, boards ect. Your basic regular employee, hired by a school or city is NOT ALLOWED to opt out in the state of Iowa.


I know many educators that when they reach 62 and start drawing SS, are making more between IPERS and SS then they were while teaching. That is before and after taxes are paid.

If I get hit by a truck tomorrow, my wife would collect right at $218,000 from what I have in IPERS right now, to say that its a poor program is grossly uneducated.

You are not helping your argument. This is not sustainable.

 

[BCClone]

The only people that can opt out are part time elected mayor or city council or other positions, judges, city administrators, boards ect. Your basic regular employee, hired by a school or city is NOT ALLOWED to opt out in the state of Iowa.

According to my wife, our asst. city clerk, the employee puts in 6.29% of their salary, and the school or town puts in 9.44% for a total of 15.73% towards retirement.

BCClone, if your wife is bringing home less than 2 grand a month, then one of two things happened, she either did not get in the full 30 years or will not reach her 62/20 rule, or she did not make much in salary. Therefore she will not be getting much back.

My five year average which is used to figure my return is around $55,000, I am eligible to receive right at $2,930 a month for life before taxes right now after 30 years. If I max out for the full 35 years, it would only bump it up another $200 a month.


I know many educators that when they reach 62 and start drawing SS, are making more between IPERS and SS then they were while teaching. That is before and after taxes are paid.

If I get hit by a truck tomorrow, my wife would collect right at $218,000 from what I have in IPERS right now, to say that its a poor program is grossly uneducated.

My wife makes slightly more than you now. They have the reduced rates for right after she began in 95. Older people were grandfathered in. She plans to retire at first shot like most at her school do. Always get early retirement packages that pay most of your insurance. She will be 56.

Yeah if you think 218k is good for what you have out in there at anywhere from 11+ to 15+ percent over the years then wow, I just don’t know what to say. You would have a mountain more if it was outside.

The opt out was printed on her IPERS statement that they mail out. I read that that was an option she had when she started, maybe IPERS needs to check what they print EDIT: I double checked and I see that they did eliminate the opt out and have eliminated that statement from the statement she gets.

 

[SEIOWA CLONE]

My wife makes slightly more than you now. They have the reduced rates for right after she began in 95. Older people were grandfathered in. She plans to retire at first shot like most at her school do. Always get early retirement packages that pay most of your insurance. She will be 56.

Yeah if you think 218k is good for what you have out in there at anywhere from 11+ to 15+ percent over the years then wow, I just don’t know what to say. You would have a mountain more if it was outside.

The opt out was printed on her IPERS statement that they mail out. I read that that was an option she had when she started, maybe IPERS needs to check what they print EDIT: I double checked and I see that they did eliminate the opt out and have eliminated that statement from the statement she gets.

Not going to argue with you about this, just look at the current IPERS website, average employees cannot opt out. I know I was never given the chance to when I started in 1985, nor was my wife when she started. You can not opt out today, I am not saying there might have been a few years that people were allowed too, but that was not the case before and after when your wife started. The only people that can opt out are elected officials, certain city positions and a few select other jobs. Your wife as a teacher would not be in either of those groups.

As too how much I would have in if I had a 401K program, we will never know. I do know many included myself that lost over half their retirement in other accounts, during the last downturn in the economy under Bush Jr.