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(Marketwatch)   In 1980, 62% of companies had a pension plan. In 2008, that number had fallen to 7%. Good luck with your 401(k) and make sure you collect those cat food coupons   (marketwatch.com) divider line 139
    More: Scary, defined benefit, Pretax, Lexington, Kentucky, pensions  
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1312 clicks; posted to Business » on 13 Nov 2012 at 7:46 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



139 Comments   (+0 »)
   
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2012-11-13 12:13:58 AM  
"So, why should we set something up that pays people who don't make us money anymore?"

"They already payed into it."

"So find a way to get it all back so we can put it all on Wall St. derivatives."

"Yes, sir."
 
2012-11-13 12:32:25 AM  
We have a perfectly viable pension system in America. It's called "give all the leftover cash to the CEOs and screw everybody else".
 
2012-11-13 12:36:55 AM  

Marcus Aurelius: We have a perfectly viable pension system in America. It's called "give all the leftover cash to the CEOs and screw everybody else".


Hey, we live in a free market system. If the market didn't think the CEOs were worth it, they wouldn't earn it. Total free market buddy, study it out.
 
2012-11-13 12:39:12 AM  
My retirement plan is "Shotguns are $300 at Walmart and Canada geese are delicious pest animals they'll pay you to cull."
 
2012-11-13 01:21:42 AM  
I always dreamed of being a train robber, maybe I'll try that.
 
2012-11-13 02:18:00 AM  
Tuna is pretty cheap and you can get a loaf of three day old bread for half off and those mayo packets at the take out counters at most food restaurant are free. How you manage to keep the gas on long enough to wrap your lips around it and check out in complete despair once you realize you worked your ass off 50 years, only to be ripped off, lied to and discarded, is your problem.
 
2012-11-13 06:18:42 AM  

bunner: Tuna is pretty cheap and you can get a loaf of three day old bread for half off and those mayo packets at the take out counters at most food restaurant are free. How you manage to keep the gas on long enough to wrap your lips around it and check out in complete despair once you realize you worked your ass off 50 years, only to be ripped off, lied to and discarded, is your problem.


But it's so high in cholesterol.
 
2012-11-13 06:24:13 AM  
I've calculated the math. If I save 12,000 grand in addition to my 401k contributions every goddamned year AND my investments perform an average of 2% growth then I should have enough money to retire on an income of 40k a year (not adjusted for inflation ). It also assumes that social security will be operable.

This year I've terminated cable which saves me like 50 bucks a month. So, you know, I'm well on my way of shaking 12k a year from the magic tree. Fml.
 
2012-11-13 07:40:21 AM  
I never realized way back when I joined the Air Force that my subsequent retirement benefits of health care and pension would become so valuable now.

/Still pumping contributions into my 401k though.
 
2012-11-13 07:42:01 AM  
Hmm. They pay your food and housing in prison...I own a gun...that CEO is a douchebag...


...


It all ADDS UP!!!
 
2012-11-13 07:52:24 AM  
I feel fortunate now that I'm working for a state university where I pay in to the state pension fund. I also get the option of deferred 457 plan. Too bad they don't let you roll an old 401k into it.
 
2012-11-13 07:57:48 AM  
We showed those pesky unions, didn't we!

Uh, where's my cut?
 
2012-11-13 08:07:21 AM  
I'm lucky here in Canada that my company has a pension fund and matches my contributions. The CPP (aka social security) works out nowadays to $17000/year when you retire.

Fark that.
 
2012-11-13 08:09:18 AM  
A professor at Harvard mentioned that Americans are great to hire because it's one of the countries where the government isn't on the side of the employees. If you don't offer a host of benefits, the government doesn't penalize you in some monetary way. He also said, hiring people from southern Europe was a pain to just avoid all together, because of their government does want you to offer the benefits based on their laws. Food for thought.
 
2012-11-13 08:11:36 AM  
Waaaaaahhh! Gimme everything, Mr. employer!!

Companies don't have pensions anymore because they realize that pensions are poison to the companies that provide them. They are essentially borrowing without restriction from employees....making promises that don't have to be dealt with for decades.

State and local governments still provide them, however they're a ticking time bomb there as well. In the coming decades were going to see such governments facing the consequences of the imprudent decisions of years ago to offer generous pensions.
 
2012-11-13 08:14:36 AM  
My 401k is just fine, maybe you don't know how to manage yours
 
2012-11-13 08:22:03 AM  

tbhouston: My 401k is just fine, maybe you don't know how to manage yours


graphics8.nytimes.com
 
2012-11-13 08:35:23 AM  
Thanks a lot, gay marriage and single-mothers.
 
2012-11-13 08:38:46 AM  

Debeo Summa Credo: Waaaaaahhh! Gimme everything, Mr. employer!!

Companies don't have pensions anymore because they realize that pensions are poison to the companies that provide them. They are essentially borrowing without restriction from employees....making promises that don't have to be dealt with for decades.

State and local governments still provide them, however they're a ticking time bomb there as well. In the coming decades were going to see such governments facing the consequences of the imprudent decisions of years ago to offer generous pensions.


What flavour was the Kool-aid?
Pensions were largely funded by the employees deferred income. Mismanaged or outright plundered pensions is why they are poison now. Did employees get a raise in there take home pay equivalent to what used to go into their pension?
 
2012-11-13 08:39:45 AM  
Ladies and gentlemen, the "McJobs Creators" lets give them all a hand.
And tax breaks for shipping jobs overseas.
And Tax havens.
And let's make average citizens pay to stay enslaved to the system, nay, not even pay but eagerly line up to pay to fulfill their own petty fantasies of the ego.
 
2012-11-13 08:39:59 AM  
A pension plan just means that somebody else owns your retirement. No thanks... I'd rather own it myself.
 
2012-11-13 08:42:21 AM  
there = their heh, 1 for 2 holy crap I need more coffee
 
jgi
2012-11-13 08:47:56 AM  
Don't get a mortgage, a car loan, student loans, or have kids (this one is flexible if you're smart with money in your 20s). Don't buy stuff just to buy stuff. Don't buy stuff you don't need. No matter how small, try to start your own business. If you need something, pay cash (or, similarly, pay off your credit card every month -- no exceptions). Essentially, don't buy into the standard American lifestyle. You do have that choice.
 
2012-11-13 08:52:04 AM  
Am I the only one that doesn't want a pension and would rather have the cash and the fate of my investments in my own hand? After Enron and with the current state of our government, you would have to be a hopeful idiot to count on pensions and social security for retirement.
 
2012-11-13 08:52:32 AM  
Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet
 
2012-11-13 08:52:45 AM  

jgi: Don't get a mortgage, a car loan, student loans, or have kids (this one is flexible if you're smart with money in your 20s). Don't buy stuff just to buy stuff. Don't buy stuff you don't need. No matter how small, try to start your own business. If you need something, pay cash (or, similarly, pay off your credit card every month -- no exceptions). Essentially, don't buy into the standard American lifestyle. You do have that choice.


Failed, failed, failed by marriage, failed by sex, okay but could be better, failed, good advice, agreed, and agreed.

Damn I suck.

Debt...the American dream

I'm weeping on the inside.
 
2012-11-13 08:54:25 AM  

sno man: Debeo Summa Credo: Waaaaaahhh! Gimme everything, Mr. employer!!

Companies don't have pensions anymore because they realize that pensions are poison to the companies that provide them. They are essentially borrowing without restriction from employees....making promises that don't have to be dealt with for decades.

State and local governments still provide them, however they're a ticking time bomb there as well. In the coming decades were going to see such governments facing the consequences of the imprudent decisions of years ago to offer generous pensions.

What flavour was the Kool-aid?
Pensions were largely funded by the employees deferred income. Mismanaged or outright plundered pensions is why they are poison now. Did employees get a raise in there take home pay equivalent to what used to go into their pension?


In order for there to be deferred income, there has to be a company with revenues. Why count on that? And the answer to your last question is yes.
 
2012-11-13 08:54:42 AM  
Doing OK by living by these assumptions:
1) It's easier to work with the system than fight it. Not always better, but always easier.
2) However, the system is not built for your benefit. It's built for the benefit of those who built it. You did not.
Therefore: Learn the rules, learn where the traps are and go around them.

Pensions were only going to be around as long as workers had more leverage over employers. For about a generation, America had a labor shortage. For over a generation, we haven't had one.

That doesn't mean you can't succeed, but you won't get very far buying into a system built to screw you.
 
2012-11-13 08:55:26 AM  

stuhayes2010: Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet


I do, though during the downturn we agreed on a corporate level to cut the company match significantly.
 
2012-11-13 08:57:09 AM  
Those god-damned teachers and their pension system are the only ones who will ever get to retire....


/what do you mean they're paying 14% of their gross pay into it?!?
 
2012-11-13 08:58:48 AM  
Like other have said, if companies and THE GOVERNMENT kept their mitts off the pension funds and Social Security, we would all be fine.

Problem is folks just can't stand to see that pile of money just sitting there. They want it.

It has been said that if the average person put into a private account, what they paid in Social Security, at retirement age 65 they would have $1.3 million dollars banked and could draw down somewhere around $3700 a month, without touching the principal.

So now, at age 65 I MIGHT get $2K a month, maybe. The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......
 
2012-11-13 08:59:14 AM  

jgi: Don't get a mortgage


Because paying rent forever makes a whole lot of sense. I'd amend this to say, "Don't get a mortgage you can neither pay off nor pay for indefinitely." For wage earners that invariably means have a plan to pay it off, because the only way mortgage payments ad infinitum doesn't impact your retirement is if you're loaded to begin with.
 
2012-11-13 09:05:44 AM  
Wow that was educational and depressing. I was just playing with my 401k and savings and realized no matter how much I save (20% to mutual funds and max out 401k), I'll never retire. This article just confirmed that.
 
2012-11-13 09:07:26 AM  

Pick: Like other have said, if companies and THE GOVERNMENT kept their mitts off the pension funds and Social Security, we would all be fine.

Problem is folks just can't stand to see that pile of money just sitting there. They want it.

It has been said that if the average person put into a private account, what they paid in Social Security, at retirement age 65 they would have $1.3 million dollars banked and could draw down somewhere around $3700 a month, without touching the principal.

So now, at age 65 I MIGHT get $2K a month, maybe. The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......


It has been said, but it's not exactly true. Otherwise pension funds wouldn't be in the trouble they are in.
 
2012-11-13 09:07:56 AM  
Unslidified , because that crap annoys me.

/you're welcome?
 
2012-11-13 09:17:42 AM  
I turn 30 today, this game is already over for me.
 
2012-11-13 09:22:21 AM  

Pick: The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......


SS is effectively 10.4% for the self-employed and is capped at $106, 800 of yearly income. In 2012 dollars, the max you could possibly pay into SS in a given year is $11,107 a year for a total for $444,000 over 40 years.

Your numbers are more exciting though.
 
2012-11-13 09:29:03 AM  

stuhayes2010: Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet


Do you mean employer matching? If so, yes. Current employer matches 50% up to 10% employee contribution. Previous employer (in the 90's) matched 100% up to 20% employee contribution.
 
2012-11-13 09:30:14 AM  
Indiana Teacher's Retirement Fund FTW!

/hope it holds up
 
2012-11-13 09:33:22 AM  

DrPainMD: A pension plan just means that somebody else owns your retirement. No thanks... I'd rather own it myself.


tbhouston: My 401k is just fine, maybe you don't know how to manage yours


Maybe you're the lucky ones, but if any average guy could be successful in the stock market, then Wall Street jobs would pay any average guy wages.
 
2012-11-13 09:43:06 AM  

12349876: DrPainMD: A pension plan just means that somebody else owns your retirement. No thanks... I'd rather own it myself.

tbhouston: My 401k is just fine, maybe you don't know how to manage yours

Maybe you're the lucky ones, but if any average guy could be successful in the stock market, then Wall Street jobs would pay any average guy wages.


There is nothing lucky about it. I am 31 and have probably spent over 2000 hrs over the last few years learning how to invest. This while working 50-60 hrs a week. I never understand why people would rather catch the next episode of Walking Dead than learn how to fight for their own damn survival.

BTW I also work my ass off to make sure that the government doesn't get one cent more than I can legally minimize my taxes, SS,whatever to be. Screw anybody who thinks that they can sit around and shuck responsibility for their own wellbeing and have me pay for their lazy ass in 30 years. Also, before you call me insensitive, I sympothize for the less fortunate who can't, and donate liberally based on my own set of values, not some beaurocrat's.
 
2012-11-13 09:43:51 AM  
I actually had a pension plan for a couple years that I'll ostensibly get to keep, but they cut off contributions to it after I was with the company for a couple years so my payout is frozen. Anyone got a guess what $300/month will buy me in 2046?
 
2012-11-13 09:46:39 AM  

Rapmaster2000: Pick: The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......

SS is effectively 10.4% for the self-employed and is capped at $106, 800 of yearly income. In 2012 dollars, the max you could possibly pay into SS in a given year is $11,107 a year for a total for $444,000 over 40 years.

Your numbers are more exciting though.


Assuming, you just stick it under the bed, yeah. But if you invest that and earn 5% over inflation (about 5-9% per year), you'll have $1.3 million.
 
2012-11-13 09:47:44 AM  

12349876: Maybe you're the lucky ones, but if any average guy could be successful in the stock market, then Wall Street jobs would pay any average guy wages.


An average guy can match the returns of the overall market with index funds while keeping expense ratios very low, or get rather safe below market returns with high quality bond funds. A person who puts in a ton of work and/or is very lucky can beat the market by making prudent choices, but I think for most people the most important thing is to avoid getting eaten alive with fees because most people are panicky and being panicky is a bad thing for an investor.
 
2012-11-13 09:50:35 AM  

Rapmaster2000: Pick: The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......

SS is effectively 10.4% for the self-employed and is capped at $106, 800 of yearly income. In 2012 dollars, the max you could possibly pay into SS in a given year is $11,107 a year for a total for $444,000 over 40 years.

Your numbers are more exciting though.


You both are technicaly correct. His numbers just involve more math.

The 1.3mil comes from the max SS buy in invested at a 5% return for 40 years. the compount interest reaches the $1.3mil figure stated above.
 
2012-11-13 09:52:23 AM  

Rapmaster2000: Pick: The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......

SS is effectively 10.4% for the self-employed and is capped at $106, 800 of yearly income. In 2012 dollars, the max you could possibly pay into SS in a given year is $11,107 a year for a total for $444,000 over 40 years.

Your numbers are more exciting though.


Actually if considering 3% compounding that number moves to 850k. Though no where near his number.
 
2012-11-13 09:53:31 AM  

stuhayes2010: Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet


My company matches my 401k for up to 10% of my annual salary, plus they add 3% of my annual salary to the 401k regardless of what I pay into it. I'm not sure how they dance around the $17.5k limit though; I don't really pay it much attention.
 
2012-11-13 09:55:32 AM  

rugman11: Rapmaster2000: Pick: The government in effect has stolen $1.3 million dollars from me and $1700 a month. All because, well, you know......

SS is effectively 10.4% for the self-employed and is capped at $106, 800 of yearly income. In 2012 dollars, the max you could possibly pay into SS in a given year is $11,107 a year for a total for $444,000 over 40 years.

Your numbers are more exciting though.

Assuming, you just stick it under the bed, yeah. But if you invest that and earn 5% over inflation (about 5-9% per year), you'll have $1.3 million.


Ah. Had to re-read the "in effect" part.

I'd say 5-9% is pretty good when "sophisticated investors" are getting advice from SeekingAlpha.
 
2012-11-13 09:56:24 AM  

Genju: stuhayes2010: Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet

My company matches my 401k for up to 10% of my annual salary, plus they add 3% of my annual salary to the 401k regardless of what I pay into it. I'm not sure how they dance around the $17.5k limit though; I don't really pay it much attention.


The 17.5k is your limit. Their contribution limit if 50k.
 
2012-11-13 10:00:15 AM  

Genju: stuhayes2010: Just a quick pole: How many farkers get 401k contribution (if you have a 401k at all)? I'd like to see the number in 1980 of contribution versus now.

Pensions are way to pricey for a company to still do.

/DNRTFA, yet

My company matches my 401k for up to 10% of my annual salary, plus they add 3% of my annual salary to the 401k regardless of what I pay into it. I'm not sure how they dance around the $17.5k limit though; I don't really pay it much attention.


The $17.5k limit is your personal max contribution. The employer match doesn't count towards that. That's a very nice match you have BTW. The average match if 5%.
 
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