401k vs pension

[25yrvet]

I just want to point out that to compare the 2 is like compareing apples to oranges. Corporations now want you to go the 401k route--maybe matching the 1st couple %. But the earliest one can withdrawl without major penalty is 59 1/2.
Now I am in c/s pension fund & we all know the fund is hurting; but there is a slight chance I could retire from ups at age 47 & do something else (P/T, slower pace, etc).
I cannot see myself delivering when I'm in my 60's (UGH), Lord willing, I'll be outta browns in my early 50's.
I feel retirement is realistic in our 50's if we are frugal & use a combination of investments--SS,pension,stock,401k.

 

[sendagain]

A 401k plan is not going to generate the same return as a pension plan unless it is started early in someone's career and invested well during all those years. The pension alone is not a great deal of money, and needs to be combined with other investments. If possible, max out your 401k every paycheck. With the amount of debt there is in this country, prices will have to rise.

 

[Dfigtree]

25yrvet,

You need to be specific about your retirement. You must determine When you plan to retire and How much you need. This means you have to address your mortgage, your kids education, your insurances and your lifestyle (travel, golf , etc.) NOW. You will need more money than you think, particularly if you want to stop working early.

Do you qualify for an IRA, or an IRA for your spouse or Roth IRA? You don't have to pull out your money from an IRA until the April 1 after the year you turn 70 1/2. You never have to pull out your money from a Roth. Plan or get a planner. Don't guess.

 

[Hangingon]

WASHINGTON -- The trustees for the government's two biggest benefit programs said Monday that the trust fund for Social Security will be depleted in 2040, a year earlier than expected, while Medicare will exhaust its trust fund just 12 years from now.

Guess we also can't assume that SS or Medicare will be there and will have to assume it will not when calculating the amount you need to retire on.

 

[25yrvet]

DFIG,
Paying down (extra principal pmts) as we speak. 3 kids, 2 are outta the house & VERY self sufficient--the 3rd is in H.S. & getting his act together. Wife has a 403B ??? through work. She loves her job & plans on working till they hall her outta the school (teacher).
Both of my parents retired too early; as they look back, they wished they had kept working a couple more years. They're doing alright $, but just didn't know how well they had it while working.
The main point of me starting this thread is to make the advocates of corp 401k contributions vs pensions think! As I've said before, I don't want to work for 'brown' till I'm 59 1/2 if I don't have to. And if that's all we had was the corp contrbution to the 401k, like alot of other freight companies, I'd be depressed.

 

[Cezanne]

The problem we all have to face is that for the most part we do not have control of our future retirement, just too many factors involved. Social Security and Medical are being depleted in much the same way as our retirement plans are, not enough younger base participants in america today. The baby boomers after WWII will be affected, trying not to be politically correct but consider Roe V Wade 30 years ago, is it not a fair assumption that we may have been killing off our future workforce over the last 3 decades. Think about it, trust funds are based on a pryamid system of more participants paying for the benefits.

The 401K plans are going to be taxed, by how much and when you become eligible is at the best interest of the federal government. At UPS if you are a teamster you do not have a match 40lk, most investors generally state that you do not max out one that does not. Any investment is determined by the returns, so if the stock market, bond market, etc takes a nose dive you hope you will at least break even.

The Central States fund will be cut again, probadly after the international's election with the blame being put on the pension reform bill, you may have a window of a year but thinking that can be changed also. If things go really bad all retirees will be affected, laws can be changed as we all have seen before

Bottom line is that you can not depend on anything in the future and never will. Not trying to be negative but more realistic than the retirement before 50 concept, you see the forces that be DO NOT WANT THIS TO HAPPEN. They want you to continue to stay in these plans for a every long time, and they have the power to do it.

Good Luck...

 

[wkmac]

A number of good points made by all and as others have said, there's no perfect solution out there. Personally, I'd like to work after leaving UPS but the current conditions although better than they were a couple of years ago make that decision somewhat difficult, not impossible but just difficult. I'd like to see this part of the equation change.

One of the most attractive parts for example of a company run plan is at present and in the past, the company seemed to have no interest what you did after retirement other than to have an address of where to send the monthly check. However like all things this too could change at any time. 401k's have this same attraction but go one step further in that they have some portibility and you can carry them to another empolyer and continue to place monies in them. Many folks with a number of years service but still lacking enough time to retire will stay in a horrible environment just because of the retirement. Employers know and some have seen firsthand where if this is not a part of the equation that the ease for an employee to go elsewhere increases dramatically and in many case they do bolt when the time necessity appears. Not always a bad thing but not always a good thing either.

25 years ago when I came to work for UPS I wasn't thinking that much about retirement as that seemed so far away but in the following years I did give it more thought and all seemed in great shape. In fact 10 plus years ago it was looking like my 401k money would end up being my travel and goof off money but my how all that has changed. I truly believe the best thing we can do for ourselves, especially if covered by a Teamster plan is to push and push hard to vastly reduce if not totally eliminate any and all work restrictions because I honestly believe seeking some type of employment after UPS will be a must to supplement our incomes especially in light of what is happening with medicare and rising medical costs. Besides I'd like to stay attactive and keep my mind challenged as I do think this is a key to long life. Sitting at home and gathering moss is not my idea of the good life but I'm more and more convinced that the powers that be want this because they know this also leads to early death and thus their liability will die with me.

JMO.