It is a depressing reality, but it is reality. More people need to understand that the stock market is irrelevant to everyday life for everyday people. It's a game, and we don't get to play.
My wife and I have used our 401k and 403b to build an incredible amount of money to retire on. Neither of us have ever made over $100K and we literally have millions of dollars for retirement (for now). If you are not using your 401k I strongly suggest you do so now.
You aren't going to convince the foolish to not be foolish. It's a wonder how immigrants come here and make it with just the shirt on their back and no connections. Yet Americans born here pretend it's just impossible.
I'd gladly open our boarders for those who beileve and try for the American dream and send these people to the socialist economies they love so much
On the surface 401ks are great, but they are a shitty replacement for pensions, which are practically unheard of these days
Yeah max out your 401k if you can… get the match, and I could talk your ear off on investing, but this safety net got a lot of holes in it. Mostly worried about less fortunate people.
I don't disagree, but everyone historically underfunded pensions because they could. Instead, they they used the money to grow the company or to give back to management or shareholders. Then the unrealistic pension assumptions caught up with them over time and the unfunded liability was so great it became crippling to many employers (both private and government). While great for the employees, pensions put all market risk in the employers hands and companies don't like risk. It isn't ever coming back.
My uncle worked for an airline at the time of 9/11. After that, the pension benefits were cut. The PBGC (pension benefit guaranty corporation) does guarantee something in the case of a corporation/pension going bankrupt, but that benefit is much less than what a typical person would get from a pension. Those are risks with a pension. It isn't really your money until you get it. A 401k is your money. There is no changing your benefit and there is no I'm sorry we underfunded it for the past 30 years. When you leave an employer, you can take the 401k funds with you (via rollover to new employers or ira).
Yep, any issues with the 401k not making money are squarely on the owners shoulders. With the internet anyone can learn the basics of investing and there are low fee companies that make it do-able for not a lot of money. It's hard when you are making min wage to do anything at all investing wise, though.
pension over 401k any day. when i retire ill get 80% of the average of my best 5 earning years till I die. you add social security to that its pretty much 100%. I’ll also get subsidized healthcare. i could do a 401k on top of it but most people here dont need that. 401k might be a totally workable option for alot of people but I’d love to see a big come back for the pension.
when i retire ill get 80% of the average of my best 5 earning years till I die.
Assuming the pension is and stays properly funded and the company doesn't dissolve. Perhaps I'm cynical but I'd rather be the steward of my own financial security than trusting someone who doesn't know me from Adam to do it.
One can acknowledge that the tools are getting worse and try to change it. My grandfather was a union truck driver who was able to retire comfortably on his pension. Didn’t finish highschool. Didn’t have to invest in anything but his house
I will probably be able to retire, but I am an outlier, I’m paid very well in a high demand field. And I’m smart with money/investing. People used to be able to retire after working an “unskilled” job their whole life… that no longer exists
This is a crazy bunch of statements. I work with 60 dudes that drive trucks and make 100k-120k a year. Most of them are millionaires when retirement rolls around from their 401k alone. Not to mention their homes and properties that they own. Then throw on a few thousand/month in social security…
My one friend is mid 30’s with 3 kids with 200k+ saved already, I’m in my 20’s with 6 figures saved, I will certainly be able to retire. I think the common theme on the internet is a constant “gloom and doom” about how much the world sucks. It really doesn’t suck that bad for a lot of people.
The old unskilled job is the new skilled job. It’s not a bad thing. More people are more educated and they do work that is less physically demanding, which also allows more women to participate in the job market. Both you and your grandfather are a product of your time and both are/was/will be doing well. But in a way your life is easier on the body. We live more leisurely lives now.
they can, but their job is as hard as it was 60 years ago. where as the more educated will be able to retire with jobs that are easier on the body to do.
Do you live under a rock? My point is that these used to be union jobs that took care of you. Today you’re an I9 and it’s “your fault” you didn’t do X to make sure you could retire
I will probably be able to retire, but I am an outlier, I’m paid very well in a high demand field.
Lol, you are hardly an outlier in being able to retire. I help people retire for a living, a lot of them with "mediocre" lifetime incomes. You can always outspend your income and that's what a lot of people do. Never cash out IRAs or employer retirement accounts and contribute what you can as early as you can. The hard part is not cashing it out when you can and living slightly below your means.
People used to be able to retire after working an “unskilled” job their whole life… that no longer exists
Name me the unskilled job you are referring to here, if you don't mind.
If I had to choose, it would always be a 401k over a pension. Too many times, retirees have had to go back to work because of some incompetent management. Granted, most people are too uneducated on investing to manage a 401k which is a shame considering how easy it is.
Pensions are guaranteed. 401ks ride the market so god forbid you plan to retire and the bottom drops out, forcing you to keep working to help recover the costs.
Also: retirement fund fees are straight fraud. It’s beginning to get more attention but the whole lack of “fiduciary responsibility” is resulting in trillions being removed from older Americans’ 401k accounts in the form of fees.
So yeah, I’m ok with a pension provided it’s well funded and not used by company/govt as a relief fund when they need cash.
Nothing in life is certain except death and taxes. All it takes is one accounting scandal, bankruptcy, or failure to fund the pension, and you get pennies on the dollar. At least with a 401k, what you put in is what you keep plus or minus gains/losses. When I picked my 401k allocation, I had the option to choose low fee funds .03% or higher fee funds .35%. It really depends on what your company plan offers.
“What you put in” minus an atrocious amount of management fees. Average fees for a 401k are about 2.23% of total assets (so about $22,000 gone if you’ve socked away $1m which doesn’t I close the federal taxes when you withdraw).
Many accounts can have fees as high as 4-5% (so about $50,000 gone out of $1 M)
Anything above 1% is a total ripoff. If your fees are between 0.03 - 0.80 you’re doing well.
I am also 100% for 401ks, but dont sugar coat what they are.
401ks are set up by wall street to take 30% of your profits. They were originally designed to be tax free like Roth IRA's, but Ronald Reagan took that away when he was president.
Pensions also force employees to stay employed even if they don't necessarily want to remain with a company. My gov position had it removed because the official in place basically said that he wanted employees to stay because they wanted to stay and not because they felt required.
Like yeah, we have a lot of people who come in for the training and free school and leave. However, we also have a lot of older burned out guys who probably shouldn't be around anymore because of the pension.
What has happened is that, our leadership has decided to increase wages borderline exponentially for the past 4 years. We are talking 8% every year for 3 years and we have a 12% around the corner. This is on top of our insane benefits(100% price match retirement) and 4% step raises. My job now pays so much that I cannot leave without taking a substantial pay cut. Surrounding counties are trying to keep up and struggling to do so.
401ks are portable and transferable upon death. There are not so many pension plans that donthe same. The match is a good incentive, but so are the tax implications.
So be married, and don't outlive your spouse or it's gone when you die. Meanwhile, my 401k can go to my daughter to help her with some extra financial security.
It depends on the plans - which are varied and have all sorts of fine print in both cases (pension and 401k.)
There are pensions you can name your children as beneficiaries if you (and your spouse) die.
You can’t name a minor child as a 401k beneficiary; you can name a minor child as a pension beneficiary
Pensions have not been modernized like 401ks simply due to the latter being more favored by private sector over last 50 years. If we wanted to remake pensions, we could. It’s just policy, not rocket science. And 401ks need a ton of reform (bc I’m sure you don’t love the idea that 5% of your contributions are taken for fees?). Say im 41 yrs old with a 401k valued at $280,000 and I contribute 15,000 a year with an employer match. If I want to retire at 66 and have 1% fees, I lose out on more than $500,000 in retirement income just in fees - and that’s before taxes kick in.
Many 401k mgmt fees can be 5%. Now you’re talking about millions being taken by financial mgmt firms.
You can’t name a minor child as a 401k beneficiary; you can name a minor child as a pension beneficiary
Well, I did on mine. And if for some reason I couldn't do so directly I could just name my trust the beneficiary so she would get it regardless.
c I’m sure you don’t love the idea that 5% of your contributions are taken for fees?)
Mine isn't, but I don't think some fee is unreasonable. The people who are investing/managing it presumably aren't working for free. Do you think pensions have no fees and the management companies just do so out of the goodness of their heart?
My work stopped the pension plan and went to 401k right before I started and my 401k is way better than what their pension is. And I’m not nearly as limited either
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u/Groovychick1978 5d ago
It is a depressing reality, but it is reality. More people need to understand that the stock market is irrelevant to everyday life for everyday people. It's a game, and we don't get to play.