Are they good quality jobs, with benefits and job security? Or gig economy jobs or service sector jobs that pay low wages with shit hours? The KIND of job matters, actually. But both @tinoesroho and @gracchus beat me to those points. Bears repeating, tho.
My friend’s folks are doing better literally than everyone else who took the change. They are not going to worry about the next couple of decades of their life financially, because of their pension. Granted, they are both tenured (now emeritus) college professors at a public university, but I bet you see exactly the same in other fields as well.
And people can and should fight that.
They have not so far, and likely won’t for retirees. When the stock market tanks right before you retire with a 401K (depending on what it’s invested in of course), you’re just as screwed if not more so.
True.
This does not surprise me either.
Yep. We’re all working till we die, just like they want us to (well, if we’re American). That is if we can get a decent job as we age, because age discrimination is a thing, too.
So, if you don’t understand or don’t have the TIME to understand how the stock market works, you’re screwed? That’s a pile of bullshit right there.
California is set to cut their public sector pensions.
Frankly, with the way most pensions are set up to allow workers to spike their earnings in the last 3-5 years prior to retirement and artificially inflate their pension for the rest of their lives, i can see why.
And people who are upset about it will be able to do more against their elected representatives who support the cut than they would with a corporate executive or vulture capitalist.
The state can and likely will contest that with the unions. Of course, conservatives and Libertarians will call for a special exception for the public sector union that protects their property even as they howl about those “greedy” teachers.
The whole point was, it’s not hard. Invest in a broad low cost index fund. It doesn’t take a genius to do that.
The gifs are cute, but you should try adding something substantive to the conversation. Or you could go look at a chart of the Dow for the last 100 years.
As noted, the 401k plan (as distinct from the employee’s 401k account) is administered by the employer. The rules give employers a lot of latitude to make changes in things like matching contribution levels, qualifying investment vehicles, plan administrators, etc. The employees have no real say in those changes, and leaving behind a 401k from a current employer presents a lot of difficulties.
So, for example, a vulture capitalist that took over a company could say: “hard times, so we’ll be matching a smaller amount going forward. But don’t worry, our crack investment arm will administer the plan from now on [unspoken: for a higher fee than the old administation firm], and while we’ll be removing some [”]underperforming[“] investment options [unspoken: like that boring ol’ index fund] we’ll be adding new ones, including some opportunities in our other great portfolio companies.”
Before they tightened up on the rules, I saw worse during the Dotcom 1.0 era: recently IPO’d companies where the only real investment choice in the 401k plan was heavy on the company’s own stock.
You can probably go to an IRA to retain a small amount of the tax benefits, but you’re foregoing matching funds. You’ll also likely be subject to pressure from management and their useful idiots to stay in, especially if you share your decision with your co-workers.
Again, how are people who don’t have a basic understanding of how investing works, and who do not have the TIME to do so meant to know that?
I have actually. It’s not either or, so don’t you fucking condescend to me.
You do realize that prior to the new deal, the market regularly peaked and crashed and has gone back to that pattern since the 70s, yeah? Plenty of people have lost their entire savings several times over, people who’ve had 401ks over long periods of time. The difference between people who’ve retired with a pension and those who retired with a 401k is pretty telling. Many people with a 401k have had to go back to work, because they can’t support themselves on their savings.
Maybe if we had a proper tax structure that supported the needs of the community, instead of constant tax cuts for the rich and corporations, we would be closer to a balanced budgets in many of our states.
The problem I have with @cilareg 's argument is that investing in the stock market is simply giving rich F%^&s more money to play with.
This is a “good” thing how? I’m not interested in making the rich, richer. At least with housing, you know they aren’t making more land. In fact there may be far less of it, if climate change doesn’t get slowed down pretty damn quickly.
Yes - People who get scared and sell at the bottom. It happened a lot during the last recession. Self directing your 401k is a double edged sword. You get to control it, and you get to mess it up. With a pension you have no control, so presumable cooler heads prevail.
That’s great. You should read my link about the worst market timer ever, who starts his career in 1970 and still retires with over $1M.
It’s not giving anyone anything. It’s buying parts of a company (or companies) that you believe will be successful and earn you money.
I never said I was giving money away. I said it was giving money to rich fucks to play with. The things I do or don’t do, do not change the ups or downs with the stock market. However, dRumpf says something stupid and the market changes, Gates says something and the market changes. Buffet says something and the market changes.
I’m not interested in giving the richest 10% of stock market ownership more ways to manipulate money and the market to make more for themselves (which are not taxed appropriately).
This is worth emphasising. With a defined benefits plan, the expectations are clear: whatever cycle the market is in, you’ll get what the terms of the plan say you’ll get, no less and no more. That stability is important and valuable for a lot of retirees, especially since old people aren’t usually the risk-friendly daredevils they were when they were younger.
If you were over age 70 and your 401k was a something as simple and easy as a no-fee index fund, you got majorly hosed in 2007-2008. And many Boomers who weren’t taking their minimum distributions still put off retirement or went back to work.
The market doesn’t just “go up”… when it’s unregulated, it goes up and down and when critical economic infrastructure (like retirement funds) are connected to it, people lose money, unpredictably, when they might very well need it.
So all those fund managers are doing the work out of the goodness of their hearts and not taking a dime? No-one’s gambling with derivatives anymore? Are the hedge funds no longer shorting stocks?
I’m not opposed to building a retirement portfolio by investing in part in the equities market – directly or indirectly, that’s what’s happening with every kind of retirement scheme. But let’s not pretend that this isn’t making senior people in the financial services sector extremely wealthy or that buying and selling stocks is all that they’re doing.
Serious investors understand and have to accept that this is all still bookies, vig, and Vegas with better odds and more tasteful suits. As for those who don’t understand that, as the old saying goes, “if you can’t spot the sucker at the table, it’s you.”
Yeah… and now the market (even including the fall of the last few months) is 65% higher than at the peak before 2007, and almost 200% higher than at the bottom. So as I said, over time, it goes up.
Of course not, they take their percentage and do whatever they want. You don’t have to use a fund manager, you know. It’s all up to you. Don’t want to gamble with derivatives? Don’t invest in real estate. Don’t want a fund taking a percentage? Invest in individual stocks and roll your own fund.
Use of profanity isn’t against the terms of service for this site.
Chastising other adults for how they choose to express themselves does nothing to advance the conversation; it’s far more likely to foster needless derailments and an understandable sense of resentment.
Someone is still wetting his beak with a 401k. Heck, someone’s wetting his beak if you’re day trading or buying a low-fee index fund.
As @anon61221983 and @RobJ and you noted in separate comments, most people have neither the time nor the discipline nor the financial literacy to do that.
Even when they do have all three, they still often pay a wealth manager his fee because they don’t want to spend all their time futzing with that stuff.
