What Weiner walks away with

This post comes from Jack Hough at partner site SmartMoney.

Anthony Weiner just resigned from the House of Representatives, his 12-year political career ended by Twitter indiscretion. In doing so, Weiner walks away with retirement benefits that are far more generous than what most workers with similar pay and length of service could ever hope to match.

Members of Congress are covered under the Federal Employee Retirement System, which features a pension-style plan at minimal cost to employees. They contribute less than 1% of pay, and contributions bear no relation to the benefits. Weiner, 46, has been a congressman for 12 years and has a recent salary of $174,000 (standard for both the House and Senate). After leaving office he has a couple of choices. He can begin taking discounted pension payments of about $25,000 a year starting at age 56 or wait until age 62 and collect about $35,000 a year.

• Bing:Do federal workers pay into Social Security?

For the average retirement investor, that's a benefit comparable to $1.2 million in the bank. With the 10-year Treasury yield at 2.9%, that's how much it would take to produce a guaranteed income of $35,000 a year.

Note that such "defined benefit" plans protect the recipient from having to worry about things that concern most investors, like stock market returns and interest rates. Over the past 12 calendar years the U.S. stock market has returned a meager 3.8% a year compounded. Savings yields are at historic lows.

A worker who socked away $12,000 of his own money in a 401k plan and received a $3,000 employer match and collected a 3.8% yearly return would have $231,000 after 12 years. Suppose such a worker left his job today and rolled over his 401k proceeds to a self-directed retirement account. Also, suppose future returns and yields look better than current ones. He grows his money at 5% a year and then draws a 4% income in retirement. By age 56, said worker would have enough to produce $15,000 in yearly income. If he waited until 62, he could collect $20,000. Post continues after video.

If that seems unfair, it gets worse:

• First, the 401k saver is contributing mostly his funds, while the federal pension is paid mostly from taxpayer funds.
• Second, after retirement he must think about things like the rising cost of living, whereas the federal plan adjusts automatically for the rising cost of living after retirement.
• Third, any risk that the federal pension won't perform well enough to pay its obligations is borne by taxpayers, not federal workers.
• Fourth, federal employees don't miss out on being able to contribute to 401k-style plans. They have one of those, too.

In addition to his pension, Weiner will collect from this additional plan, plus Social Security. He also has a blue chip stock portfolio that disclosure filings show was worth $226,000 in 2009 when the market had tanked, so it's probably worth about $300,000 now.

Add to that any retirement savings the congressman had from his six-year stint as a New York City councilman, plus whatever CNN inevitably pays him in the future to co-host next to Eliot Spitzer.

The point here isn't that politicians don't deserve decent retirement plans. The last thing America needs is financially insecure lawmakers. But Weiner is getting the equivalent of a $1.2 million exit payment after serving just 12 years on the job. Now that's worth tweeting about.

More at SmartMoney and MSN Money:

• Saving for retirement: A new way to figure it out
• Weiner's most shameful reveal
• Transportation nightmares: Worst cities in America for seniors
• Strapped seniors trying to hang on
• Calculator:Am I saving enough for retirement?
• How much money will my 401k provide?