Paid more than perm staff nurses?

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quick question about travel nursing...i've met a few and am a current student (debating between nursing and RAD tech) and i heard that as a travel nurse, you get paid more than perm staff nurses? is that correct? i heard that was true in one place and am not sure if it's just because of the area there or if that's a standard across the US...thanks! ~amanda

But generally, travel nurses don't get any pensions. That's a biggy consider future retirement income. Only company matching 401 plan, sometimes they only match up to 50%.

:confused:

Pensions are a thing of the past. Retirement security is more of a personal responsibility now. As far "only matching 50%", this is an ignorant comment. A guaranteed 50% return on investment is absolutely wonderful. If you know of a different vehicle that returns more I would LOVE to know about it.

401k's work by matching your contributions. For an example, a company may match 50 cents for every dollar you contribute up to 6% of your income.

Pensions are a thing of the past. Retirement security is more of a personal responsibility now. As far "only matching 50%", this is an ignorant comment. A guaranteed 50% return on investment is absolutely wonderful. If you know of a different vehicle that returns more I would LOVE to know about it.

401k's work by matching your contributions. For an example, a company may match 50 cents for every dollar you contribute up to 6% of your income.

I don't understand why people are willing to give up on pension benefits so easily. While I agree that pensions are a thing of the past with a lot of hospitals but, that doesn't mean every employer doesn't have them.

401K's are a ripoff ... pensions are much better.

50 cents for every dollar you contribute up to 6 percent of your income is actually pathetic. If you're making $60,000 a year that means the company only contributes $3600 max to your 401K every year.

After 20 years that means the company has only contributed $72K to your retirement ... a little more than one year's salary.

After 20 years with my pension plan I'll collect half of my salary for the rest of my life ... 75 percent after 30 years. Plus, I get health benefits in retirement with that pension.

Since the average retiree lives for 20 years, it's a much better deal than just one year's salary with no health benefits. So ... pension benefits are not something to be underestimated.

:typing

Specializes in Peds, ER/Trauma.

However, with pensions, you have to stay at the SAME hospital or health system for a loooooooong time. 401k's can be rolled over if you change jobs.

However, with pensions, you have to stay at the SAME hospital or health system for a loooooooong time. 401k's can be rolled over if you change jobs.

If I recall correctly you have to stay with an employer about 5 years to get the maximum matching funds with a 401K so ... it's not like you don't have to invest some time there also.

Besides ... usually after five years you're vested with a pension plan also so, even if you want to quit at that point you still get more money:

At $60K a year under the 401K and getting the maximum contribution after five years the company contributes about $18K to your plan.

Under my pension plan after five years at $60K I would collect $7500 a year for the rest of my life, starting at age 50, plus health benefits (which is no small expense).

Average life expectancy is 85 years so from age 50 forward I'd potentially collect: $262,500 ... much better than just $18K.

BTW ... I have a 401K to supplement my savings also. There's no matching but, I don't mind because the pension is better anyway.

:typing

401K's are a ripoff ... pensions are much better.

50 cents for every dollar you contribute up to 6 percent of your income is actually pathetic. If you're making $60,000 a year that means the company only contributes $3600 max to your 401K every year.

After 20 years that means the company has only contributed $72K to your retirement ... a little more than one year's salary.

This is completely wrong. You guys are on the right track but the math is off. Let me explain why a 401k is a great investment.

First, a 401k is a retirement account that lets you choose how you want to invest your money. You can choose different vehicles that carry different levels of risk and different potential levels of return. It is also a tax shelter meaning every dollar you contribute per paycheck is not taxed with the rest of your money. The tax is delayed, occurring when you draw out your money at retirement.

Here is the great part though and where your math was wrong. The money you put into this account grows. It is compound interest. Think of it like how credit cards charge interest only in reverse. I'll use your example to explain.

Say your match is 50 cents for every dollar up to 6% of your income. If you make $60,000 annually. This would mean a company match of $3600 annually as you said. So each year this amount is added to your account, but let's say it is also in a "vehicle" earning 12% interest. If you go to http://www.bankrate.com and plug these numbers into a savings calculator, after 20 years as you mention this $3600 a year grows to $287,921.56. If you continued to do this for 10 more years you would have $ 1,048,489.24. Keep in mind this is just your companies match and not ANY of the money you have contributed!

I don't understand why people are willing to give up on pension benefits so easily.

:typing

Because they are impractical. I don't plan on staying with any employer long enough to make it worthwhile, but even if I did, I have absolutely no faith in them actually meeting their obligations. I just don't believe they will have the money to give by the time I retire. The baby boomers are going to suck those systems dry. I think people who are relying on those pension cheques are really vulnerable.

401Ks, IRAs, etc. all allow me to control my own money and I KNOW that I'll get it when I want it. Plus, the extra 2K a month I make as a traveller allows me to contribute a lot more to my own retirement accounts than I could as a staff member.

Say your match is 50 cents for every dollar up to 6% of your income. If you make $60,000 annually. This would mean a company match of $3600 annually as you said. So each year this amount is added to your account, but let's say it is also in a "vehicle" earning 12% interest. If you go to http://www.bankrate.com and plug these numbers into a savings calculator, after 20 years as you mention this $3600 a year grows to $287,921.56. If you continued to do this for 10 more years you would have $ 1,048,489.24. Keep in mind this is just your companies match and not ANY of the money you have contributed!

I see your point but you're assuming a completely rosy investment scenario, which just isn't practical. If we're going to do hypothetical rates of return ... you can't just look at the upside with the 12 percent a year ... you've also got to look at the downside.

First of all ... 12 percent is very optimistic. The average, diversified portfolio rate of return is more like 8-9 percent. If you're getting 12 percent that's probably a portfolio heavily weighted with stocks and that means a lot more risk.

Sure ... the 401K can be a great investment but, not always. What if the stock market tanks ... which is bound to happen in the next 20-30 years. The stock market doesn't just go up and up. It goes up and down. And when the market tanks, it really tanks. Does anybody remember the bear market of 2001? It wasn't that long ago.

Even if you invest the $3,600 a year at 12 percent compounded ... it would add another $4K to your account for a total of $22K after five years. BUT ... that $22K could easily get down to $12K in a bear market like what we saw in 2001. Then you could wait years for your investment to recover (which is what happened the last time). You've lost your 12 percent and then some in that scenario.

Meanwhile, I'll get my pension for the rest of my life no matter what happens with the market. Not to mention the health benefits, which is no small expense, especially as you get older. How much is health insurance going to cost you in retirement? Probably a lot. Healthcare won't cost me anything if I go with Kaiser, for example.

With a 401K the risk is totally on you. Ask anybody who mistakenly invested all of their money in Enron, etc. and lost all of their 401K investments. With a pension fund, the risk is on them. My pension fund invested in Enron, etc. BUT unlike people who lost everything with 401K's ... they still made those pension payments regardless of what was happening with the stock market.

Why? Because even though the pension fund took a hit with Enron and other stocks, it barely made a dent in their funding because they have $150 billion in assets.

:typing

Because they are impractical. I don't plan on staying with any employer long enough to make it worthwhile, but even if I did, I have absolutely no faith in them actually meeting their obligations. I just don't believe they will have the money to give by the time I retire. The baby boomers are going to suck those systems dry. I think people who are relying on those pension cheques are really vulnerable.

401Ks, IRAs, etc. all allow me to control my own money and I KNOW that I'll get it when I want it. Plus, the extra 2K a month I make as a traveller allows me to contribute a lot more to my own retirement accounts than I could as a staff member.

And you have faith in your 401K? I don't have that much faith in mine ... how do you know you'll get that money when you want it?

Remember the market crash of 2001? Has everybody completely forgotten what happened? All of the accounting scandals? Plenty of people either lost their 401K's all together or ... they had to delay retirement for years and wait for their 401K investments to recover before they could cash them out.

There's just as much (and arguably more) risk investing your own money ... unless you go with really conservative investments that don't pay much investment income ... which defeats the advantages of the 401K to begin with. Less investment income = less retirement nest egg, especially if a 401K is all you've got.

Don't get me wrong ... I certainly understand you're skepticism with pension plans and some pensions just aren't worth it. Some of them are not fully funded, they've made bad investments, etc. However, not all pension funds are poorly managed either.

But I don't see how you can only be skeptical of pension funds alone ... I'm equally skeptical of Wall Street, investment bankers, corporations etc. They're not exactly saints either. One accounting scandal with any of them and poof! You're money is gone.

I investigated all of these concerns ... which is why I went to work for state government. The Calpers pension fund was the best managed pension I could find. It's fully funded and protected by state law. They have $150 billion in assets. Schwarzenegger tried to mess with it and couldn't which, to me at least, demonstrated that it was pretty bullet proof.

And, when I compared the hospital contributions to a 401K plan versus the pension, there was no comparison ... the pension is much better, IMO.

In the end ... I looked at the history. What actually happened in the worst case scenario.

When the stock market crashed in 2001 ... nobody missed their Calpers pension payments ...

Plenty of people lost money with their 401K investments. So that's why I still think the pension is better.

:typing

Actually if you look into it, 11-12% is the historical average rate of return since the markets inception. Also, I'm not saying to put your money in single stocks. As you mentioned there is too much risk with that. I'm suggesting good growth stock mutual funds. A mutual fund as the name implies is a fund that buys stocks of maybe 100 different companies and is funded by thousands of different people. This is called diversification leading to less risk. Those who were investing wisely in growth stock mutual funds and some international funds in 2001 would have barely noticed the market of 2001 when some peoples 401k turned into a 201k. I just like the idea of having control of my retirement and the potential of retiring a multimillionaire!

Actually if you look into it, 11-12% is the historical average rate of return since the markets inception. Also, I'm not saying to put your money in single stocks. As you mentioned there is too much risk with that. I'm suggesting good growth stock mutual funds. A mutual fund as the name implies is a fund that buys stocks of maybe 100 different companies and is funded by thousands of different people. This is called diversification leading to less risk. Those who were investing wisely in growth stock mutual funds and some international funds in 2001 would have barely noticed the market of 2001 when some peoples 401k turned into a 201k. I just like the idea of having control of my retirement and the potential of retiring a multimillionaire!

Well ... I'm glad you're dreaming of millions but ...

Mutual funds do spread the risk, but they are still subject the whims of the market ...

As this graph shows ... the Dow did not recover to it's previous 2000 levels until 2006 ... it took six years to get back over 11,000 ...

http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=2000

So I don't see how you can assume a 12 percent rate of return in that scenario.

And if you planned on retiring in 2001 ... you had a long wait to recover, unless you sold your investments right before the crash.

:typing

Specializes in med&surg.

Hi Shery257! Thanks for your insights on pension plan and 401k. I really learned a lot. I am from Canada and we have different systems here. From reading all you guys posts, I think it will be wise to have both pension plan and 401k, so in case one plan fails (for which ever the reason, market crash or plan dryingout), you still have another to back you up.

I still have some questions after reading sheri257's posts. Hopefully you will help me on these.

1. "the salary" that a pension plan based on, is your base salary or the gross salary, which includes your bonus and shift differences, etc?

2. "the salary" is your last year's salary before retirement, or the highest salary you've ever made, or the average salary you've made?

3. assume that a person can collect the pension when age 50, what if she continues to work until 65, can she still collect the pension while working? Or if she push back the pension collection until age 65 right after her retirement, does it make difference in pension payout?

4. In your other posts, you mentioned that if the salary is 60k, you can collect $7500/yr.... you also mentioned that if a person worked for 20 years, she could collect 50% of the salary, lets assume the salary is 60k, does that mean she can get $30000/year? I am a bit confused here. To me, $7500/year or $625/mo will be insificient to one's retirement life, but either 50% of your salary (say 60k) or $30,000/year might be if you have other retirement savings as well. Please explain to me. Thanks!

please stick to the topic that was originally asked in the first post on this thread.

discussing the benefits of 401ks and the other pension items was not the topic that was being discussed. this makes it hard for those that do a search for information related to the original topic.

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