Comparing a Former U.S. President's Pension to YOURS | Ed Slott and Company, LLC

Comparing a Former U.S. President's Pension to YOURS

By Beverly DeVeny, IRA Technical Expert

Follow Me on Twitter: @BevIRAEdSlott

Prior to 1958, the U.S. did not provide a pension for its former presidents. George Washington retired to Mount Vernon where he resumed his role as a plantation owner/farmer. Abraham Lincoln did not live to collect a pension. His wife, Mary Todd Lincoln, petitioned Congress for a widow's pension in 1870, five years after Lincoln's death. She was awarded the sum of $3,000 a year.

The current law provides for a presidential pension amount equal to the pay of senior government officials. In 2012, this amount was $199,700 per year. The pension for the outgoing president begins at noon on Inauguration Day when the incoming president is sworn in. In President Obama's case, he will start collecting his pension in the year he turns age 56.

In addition to the pension, the outgoing president receives lifetime Secret Service protection, staff and office allowances – capped at $96,000 a year after 30 months, official travel expenses, and transition expenses. The former president is entitled to medical care in military hospitals, which he must pay for at “interagency” rates. If he/she wants private health insurance, that is at their own expense.

Not bad for a job that only lasts for eight years – if you get re-elected.

Contrast this with the declining number of companies offering pensions to new hires and companies that are buying out the existing pensions of retired employees. These are individuals who would have to work far longer than eight years to receive any benefit, and the benefit is vanishing. Many of today's employees find they have no company-provided pensions and instead, must fund their retirement with deferrals from their own salaries. If they are lucky, their employer will match at least part of their own contributions. And they are the lucky employees. Individuals who work for small businesses often have no retirement plan offered at work.

Is there a solution to the pension dilemma? I’d like to think so, but it will take work on the part of Congress and employers to come to a solution and I don’t expect it to happen very soon.
 

Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner

 


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to matt@irahelp.com for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at matt@irahelp.com or (516) 536-8282 with any questions.

 

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.
 

I agree to the terms and services:

You may review the terms and conditions here.