An interesting thing happens when you’re taking care of a child all day long – you end up going outside as much as possible in order to try and interact with other adults 🙂 If you’re good with timing you’ll know when everyone’s out and about to increase your odds of some good interaction, and if not you’ll have to hop in the car and go look for it elsewhere. Like at the mall, grocery store, etc …
Lately though, I’ve been pretty good with meeting my favorite people around the community. In particular our postman who’s kind enough to entertain (and answer!) all my questions about what it’s like to deliver mail all day long 😉 Things like:
- Where do you use the bathroom? (“At a friend’s house or office building along my route.”)
- Have you ever got bitten by a dog? (“No, but I’ve come close… Also to hitting them!”)
- Do you think Saturday deliveries will ever go away? (“I have no idea but they’ve been saying that for years… I just concentrate on today and let everyone else worry about that stuff. Nothing I can do about it anyways.”)
And my most recent question, which leads us to today’s topic: Do y’all get a pension?
I figured their benefits would be pretty good considering they work for the Gov’t (he pays like $60/mo for health insurance!), but I just assumed they all got pensions which he told me was incorrect. At least the path HE’s on… According to him – and I’m sure there’s some cut off here – he gets matched 100% of whatever he puts in himself. Which means if he puts in 5%, he’ll then get a match of 5% thereby DOUBLING his money from the get go! And being the smart man that he is, he’s been contributing 10% every single year going on 26 years now 🙂 Effectively investing 20% of his salary each time.
“You invest 10% of your paycheck? That’s awesome!! And they give you 10% match just like that?”
“Yup. And I’ve been doing it for 26 years in a row now.”
“WOW. Good for you man. What if you put in 50% of your paycheck? Would they match that too?”
“How the hell could I live off 50%?”
I wanted to ask him more at that point like “How much have you saved so far??” but our convo got cut short when cars started piling up behind us (we always talk in the middle of the street as he’s coming or going from his runs). So for now we’ll have to guess until I can run into him again and work it all back into our conversation 😉 So far he doesn’t seem to mind sharing though, bless his heart…
So here’s what we know up to this point:
- He contributes 10% of his salary every paycheck, and receives 10% back in matching.
- He’s been doing this for 26 years in a row now, and will probably retire in another 6 years (his latest guess when I asked)
Now, I have no idea what postal workers’ salaries were back then, but I do know after some quick Googling that the median pay for these guys/girls right now is around $53,860 (According to the Bureau of Labor Statistics in 2010). Which is a) A LOT higher than I would have guessed for some reason? But b) even better for my hopes that he’ll soon become a millionaire if he’s not already 😉 So let’s just say for calculation reasons that he was making $30k conservatively for 5 years when he started out, then got bumped to $35k after 5 years on the job, and then up to $40k the next 5, and $50k the remaining 11 years following. Again, I could be totally wrong here, and they seem super conservative really, but let’s just see what happens when we run the numbers…
This would mean he made an average salary of about $41,350/year across his past 26 years of employment so far. (($30k x 5) + ($35k x 5) + ($40k x 5) + ($50k x 11) all divided by 26). Which would also mean an average of $4,135 contributed to his retirement account so far, with that same amount of $4,135 matched as well. Totaling $8,270 every single year of employment. So far so nice! 🙂
Now if we multiply those yearly investments by 26, it’ll mean he has saved a whopping $215,020 without factoring in any growth or inflation/etc so far at this time. If we add in the typical 7% compounded growth over the years like most calculators use, AND disregard inflation (cuz that wouldn’t have any affect in the AMOUNT he’d have in his retirement accounts at all, just purchasing power), that would bring his total amount of investments to a sizefull pot of $567,954 🙂 Love it.
And if we factor in the next 6 years at the same rates until he thinks he’ll retire? That brings his nest egg to a whopping $911,504!! So close to my millionaire guess! Woopee! Hahah… And honestly it’ll probably be higher since our salary numbers were on the lower side in my opinion… A few more hundred invested every year would make a killer difference. (Btw I’m using the retirement calculator from CNN Money btw to get these numbers)
Now we’ll have to see how close I am the next time I catch him in our neighborhood 😉 You think I’ll be in the ballpark? Think I’m missing any major factors here? Take a guess yourself and let us know! We’ll see who gets the closest when I find out 🙂 (Watch him answer everything but that now, haha…)
Anyways, now you know what happens when I watch Baby $ all day long these days… I harass people during our walks and then try and figure out how much money they have 😉 Next up? The policeman that lives on our street… Time to start tracking her moves!
Photo credit: striatic