CALPERS earns dismal 1 percent on investments. Why is this important? CALPERS return “was well below its projected return of 7.5 percent for the fiscal year that ended June 30…” and “The investment returns are critical because taxpayers are on the hook for the difference if the pension funds fail to meet their performance targets.” Hey, the bullet train is gonna save California just like Army Detachment Steiner saved Berlin from the Soviets.
This post was last modified on January 26, 2021
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$11,000 per month. That's what a retired Lieutenant with a 30 year pension gets from the County Sherriff. And then they get hired back to do specialist work on contract - the requirements for which they wrote - and surprisingly they find themselves as the only ones qualified to do the work!
Faster California, faster...
You have to be a retired General from the military with over 16 years of service before you get that kind of money!
Ever seen their building in Sacramento? The Taj Mahal comes to mind. I bet they have Taj Mahal salaries and benefits,too.
I told my stepson that now that he makes good money (NOT a government job) he needs to start preparing for retirement, he's 30.
I set up a plan for him to follow that will take advantage of the best interest rates, as well as long term investment goals. I also told him he needs to be realistic and not expect to retire in 5 years.
He will be maxing out his Roth IRA each year, and from there, buy into 6 month CD's at a rate of one per month. This way, he has his money growing at a stable rate, and it's safe. The CD's will start maturing every month, and he will then roll them over and add to them as they renew.
Now, as the interest rates increase, he will be able to take advantage of the new rates every month.
He is fortunate that the job he has pays a good salary, as well as daily and monthly bonuses. If he follows my plan, and just invests his bonus money, he will be sitting pretty in 15-20 years.
Investing is simple if you don't have unreal expectations and don't keep chasing the high return investments. High return means high risk, and you can lose your ass.
The triumph of hope! Many public employee pension funds wear the same rose colored glasses as CALPERS when forecasting returns of 7-8%, even though recent experience is returns of 2-3%(I don't suppose that has anything to do with the Obama economy). Of course, by using the inflated earnings projection the pension fund does not have to admit that it is underfunded, which allows retirees to continue receiving their generous benefits, and taxpayers to continue to believe they will not have to work forever to pay for public pension benefits. Unfortunately, this problem is not confined to California.
CALPERS was using 8%, I believe, up until a couple of years ago when they "rationalized" their expectations by lowering it to 7.5. Yeah, 7.5% for a fund the size of CALPERS is pretty much fantasyland, especially in an environment like today when one needs a microscope to view T-bond yields.
I wonder what percentage of their portfolio was in 'socially responsible' firms where 'people come before profits',(and thus they don't make much in the way of profits), and out and out green swindles such as Solyndra.