The International Brotherhood of Electrical Workers (IBEW) is committed to giving our union workers the best experience throughout their employment and continuing through to their retirement. Preparing for the future is important and should begin as soon as you can. It is never too early or too late to plan for retirement. The IBEW knows the importance of solidifying a strong financial future for your family. Here is a brief explanation of the retirement and annuities that you could take advantage of by becoming a member.
Because you don’t want to work forever, and you will ultimately be responsible for paying for your retirement:
If you want to stop working one day, you are going to have to think about how much income you will need to live. Social Security provides a basic “floor” of income that you will have to build on for a comfortable retirement. Pensions have provided about 1/3 of retirees with some added income each month. Look for a job that comes with a pension. Others have a savings plan at work. Use it.
Because you want to have enough money saved for a comfortable retirement:
Many people assume that expenses will go down in retirement, but frequently that is not the case. Inflation means you will need more, not less. Higher property taxes could cause your housing costs to be more. You might spend less on clothing, except you’ll have more time to do it! Many other expenses may arise: increased medical costs and health insurance premium costs; financial help for children/grandchildren, or even elderly parents; more free time that could result in more money being spent on traveling and entertainment.
Because you don’t know how long you will be able to work:
The Retirement Confidence Survey found that 39 percent of current retirees retired earlier than planned due to an unexpected event such as health problems or changes in their company such as downsizing. The earlier you start preparing for unexpected events, the better.
Because you don’t know how long you will live:
People today are living longer. Retiring at age 65 today? A man would have a 50% chance of still being alive at 81, a woman 85. A 25% chance of living to nearly 90. A 10% chance of getting close to 100. How big a chance do you want to take of living longer than you savings lasts?
This 30 year retirement projection is based off of the average hours worked by a journeyman. The calculation includes the $8400 in annuity an individual will receive after completing the apprenticeship program. Your investment of $8,400 earning a rate of 8% annually for 30 years would grow to $91,860, before taxes. You will receive the contractor contributed $4.10 per hour would total $7,085 per year for 30 years. The total amount including annuities, contributions, and interest over 30 years would be $977,034. The charts below illustrate a breakdown of the calculation.
Total Annuity Contribution and Interest Calculation: 30yrs
The average journeyman hours worked in
=
1728 hours per year
Local 343 jurisdiction
1728 hour per year x $4.10 per hour
=
$7,085 per year
(Contractor contributed)
$7,085 / 12 months
=
$590.42 per month
$590.42 x 8% interest per year
=
$977,034
(compounded over 30 yrs.)
The annuity gained over 30 years is $977,034.
You could retire with the monthly interest return of $6,514.
Annuity Interest & Other Retirement Plans Calculation
Annuity of $977,034 @
$6,514
8% interest divided by 12 months (Interest Only)
NEBF $32 per month x 30 years*
$960
IBEW $4.50 per month x 30 years**
$135
Social Security
$1,234
Total Monthly Pension Benefit
$8,843
Total Yearly Income from Interest, Other Pensions & Social Security
$106,116
*NEBF-National Electrical Benefit Fund is the national pension plan.
**IBEW-International Brotherhood of Electrical Workers pension plan.
A monthly interest total of $8,843 without touching the principle amount.
Totaling a $106,116 yearly income just off of interest & pension benefits alone.
The 20 year retirement projection is based off of the average hours worked by a journeyman. The calculation includes the $8400 in annuity an individual will receive after completing the apprenticeship program. Your investment of $8,400 earning a rate of 8% annually for 20 years would grow to $41,385, before taxes. The contractor contributed $4.10 per hour would total $7,085 per year for 20 years. The total amount including annuities, contributions, and interest over 20 years would be $391,224. The charts below illustrate a breakdown of the calculation.
Total Annuity Contribution and Interest Calculation: 20yrs
The average journeyman hours worked in
=
1728 hours per year
Local 343 jurisdiction
1728 hour per year x $4.10 per hour
=
$7,085 per year
(Contractor contributed)
$7,085 / 12 months
=
$590.42 per month
$590.42 x 8% interest per year
=
$391,224
(compounded over 20 yrs.)
The annuity gained over 20 years is $391,224.
You could retire with the monthly interest return of $2,608.
Annuity Interest & Other Retirement Plans Calculation
Annuity of $391,224 @
$2,608
8% interest divided by 12 months (Interest Only)
NEBF $32 per month x 20 years
$640
IBEW $4.50 per month x 20 years
$90
Social Security
$1,234
Total Monthly Pension Benefit
$4,572
Total Yearly Income from Interest, Other Pensions & Social Security
$54,864
*NEBF-National Electrical Benefit Fund is the national pension plan.
**IBEW-International Brotherhood of Electrical Workers pension plan.
A monthly interest total of $4,572 without touching the principle amount.
Totaling a $54,864 yearly income just off of interest & pension benefits alone.
This chart shows the projected annuity calculation for our journeyman with and without going through the apprenticeship program. The journeyman columns on the left illustrate the annuity calculation without going through the apprenticeship program.These journeymen will not receive the $8400 because they did not go through the apprenticeship, but will still receive an exceptional retirement.The journeyman columns to the right show the annuity calculation after an individual completes the apprenticeship & received the $8400 annuity.
This calculation chart is based off of the contractor contribution towards your retirement and the average interest rate over the listed period of years.
This graph illustrates the importance of investing early and the power of letting your investment work for you. By taking a proactive approach in investing, you can help solidify a strong financial future for you and your family.
