this post was submitted on 22 Feb 2025
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cross-posted from: https://lemmy.ml/post/26319922

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[–] chiliedogg@lemmy.world 2 points 8 hours ago

It depends on the organization.

I'm part of the Texas Municipal Retirement System. I put 7% of my salary into TMRS, and th city double-matches that, so I've got 21% going into the pension annually.

When I retire, the pension pays me according to what I put in and what I make the last 5 years of my career. Each member city that I've worked at contributes to my pension until I doe according to how long I've worked there.

The biggest thing to understand about a pension versus a 401k is that you can't cash out on a pension. When I retire, I'll get paid the rest of my life and even get raises, but I won't have a huge pile of money I can pull out or give to my heirs.

On the flip side, I don't run the risk of outliving my savings.