Bye Bye Pension and Hello to matching 401k coming in 2023?

[CoffeeStainedUniform]

457 isn't all that great. Whatever the employer matches goes against the cap you can put in

I was just pointing out that a pension is not a "diferred comp" plan.

FWIW the government 457s are not bad...it's the normal type that suck.

 

[Smashmouth]

Well they aren't a good value even when they work out ok. The worker would be much better off having control of that money.

I agree if the worker could/would save that money, and if the employer would give them more money either in take home pay or a healthy 401k match.

Pensions are a deferred compensation for your retirement years. Too many of you young pups would just go spend the money on a new $60K pick up truck.

But like PT said...these days it seems the more they make the more they spend.

 

[Brownslave688]

I agree if the worker could/would save that money, and if the employer would give them more money either in take home pay or a healthy 401k match.




But like PT said...these days it seems the more they make the more they spend.

They don't have to give a match though. This is where people get confused. We could negotiate that ups put X amount of dollars in every week or negotiate some profit sharing and it go directly into the 401k.

 

[Brown_Star]

Where do people come up with this nonsense ?

Drugs BUG .....

 

[Dracula]

I was just pointing out that a pension is not a "diferred comp" plan.

Pensions, absolutely, are deferred compensation. They wouldn't be part our contract if they weren't. They are another form of compensation for services rendered. Just paid at a future time period.

That's why it's a load of BS when companies unload pensions to boast profits. If one company had an agreement with another to pay a determined amount of money at a future date, and squelched on the deal, you can bet the first company would be locked up in court for breach of contract.

The American worker? We're SOL if a company decides they won't pay us their obligations. No court in the land will take our case. We have no army of attorneys to help us out, unlike the companies.

And many of these comments are right, pensions rely on the stock market to meet their obligations. But most pensions are required to limit their risks, and only invest in AAA rated securities. That might be alright, were it not for the big banks and credit agencies, that by 2007 had rigged the system where worthless, mortgage-backed securities were rated AAA, and worthy for all pensions.

We saw how that worked out for everybody. The banks and the credit agencies skated passed the mess and pensions, and everyone who relied on them got left holding their bag.

401k's? Great idea, if they weren't slanted against us. Especially when we work for a company that doesn't match our contributions. And we take all of the risks, not the companies. 401k's assume we are all financially astute. Maybe some are, but the vast majority of us don't moonlight at Edward D. Jones. And the fees on many 401k's take a hidden chunk of our potential earnings.

More money for the big banks. The same banks that tanked our economy in 2007, and the same banks that are supposed to guard the gates. When they lose money, they get bailed out, but when our money is lost, it's tough luck for us.

Obviously, there is no perfect system. And it is definitely possible to have success with a 401k. But lets not pretend they are some retirement gift to workers. They are designed to shift financial risk from the employer to the employees.

 

[CoffeeStainedUniform]

Pensions, absolutely, are deferred compensation. They wouldn't be part our contract if they weren't. They are another form of compensation for services rendered. Just paid at a future time period.

I hate to disagree with such a small part of your analysis, because I agree with most of it. It's important to understand the difference in risk/ownership between a pension and diferred comp.
457s and 401s you own...the risk and the principal. Once vested, they cant be taken from you, and only your choices can cause you to lose it.

Our pensions get funded hourly but require us to work a rediculously long time before we get a payout. We never have ownership of the principle, and bad decisions by people unknown could lose every cent of it. It is not diferred comp.

 

[Brownslave688]

Pensions, absolutely, are deferred compensation. They wouldn't be part our contract if they weren't. They are another form of compensation for services rendered. Just paid at a future time period.

That's why it's a load of BS when companies unload pensions to boast profits. If one company had an agreement with another to pay a determined amount of money at a future date, and squelched on the deal, you can bet the first company would be locked up in court for breach of contract.

The American worker? We're SOL if a company decides they won't pay us their obligations. No court in the land will take our case. We have no army of attorneys to help us out, unlike the companies.

And many of these comments are right, pensions rely on the stock market to meet their obligations. But most pensions are required to limit their risks, and only invest in AAA rated securities. That might be alright, were it not for the big banks and credit agencies, that by 2007 had rigged the system where worthless, mortgage-backed securities were rated AAA, and worthy for all pensions.

We saw how that worked out for everybody. The banks and the credit agencies skated passed the mess and pensions, and everyone who relied on them got left holding their bag.

401k's? Great idea, if they weren't slanted against us. Especially when we work for a company that doesn't match our contributions. And we take all of the risks, not the companies. 401k's assume we are all financially astute. Maybe some are, but the vast majority of us don't moonlight at Edward D. Jones. And the fees on many 401k's take a hidden chunk of our potential earnings.

More money for the big banks. The same banks that tanked our economy in 2007, and the same banks that are supposed to guard the gates. When they lose money, they get bailed out, but when our money is lost, it's tough luck for us.

Obviously, there is no perfect system. And it is definitely possible to have success with a 401k. But lets not pretend they are some retirement gift to workers. They are designed to shift financial risk from the employer to the employees.

You really don't have to be a financial genius. Just not a maroon. Any broad market fund will beat a pension.

 

[Dracula]

You really don't have to be a financial genius. Just not a maroon. Any broad market fund will beat a pension.

I've done pretty good in my 401k, but I've spent a lot of time educating myself. I just wonder how many Teamsters do the same, knowing they have a potential pension waiting on them.

BTW, I noticed someone earlier talking about how they made all of their money back, that they lost from 2007-08, going by the current stock market numbers. But I had a financial guy tell me, in order to gain back all you lost from the collapse, you would have to double your earnings from that period in order to get back what you lost. So just because the stock market numbers now are higher than they were pre-2007-08 numbers, we would have to double our gains (not total numbers, but GAINS) from pre-2007-08 highs to the lows afterwards, just to break EVEN.

Like I said, I've done pretty good, but I haven't come close to doubling my losses, in gains.

I'm not crapping on 401k's, I'm just stating the obvious: they are not some golden rescue for us. They are just another financial product that we are told will save us from a bad pension, when they, clearly, are not.

13 Reasons Why Your 401(k) Is Your Riskiest Investment

 

[IVE GOTTA PACKAGE 4U]

I've done pretty good in my 401k, but I've spent a lot of time educating myself. I just wonder how many Teamsters do the same, knowing they have a potential pension waiting on them.

BTW, I noticed someone earlier talking about how they made all of their money back, that they lost from 2007-08, going by the current stock market numbers. But I had a financial guy tell me, in order to gain back all you lost from the collapse, you would have to double your earnings from that period, to date, in order to get back what you lost. So just because the stock market numbers now are higher than they were pre-2007-08 numbers, we would have to double our gains (not total numbers, but GAINS) from pre-2007-08 highs to the lows afterwards, just to break EVEN.

Like I said, I've done pretty good, but I haven't come close to doubling my losses, in gains.

I'm not crapping on 401k's, I'm just stating the obvious: they are not some golden rescue for us. They are just another financial product that we are told will save us from a bad pension, when they, clearly, are not.

13 Reasons Why Your 401(k) Is Your Riskiest Investment

If you did good or bad , it's still your money in the end. With what many of these pension plans look like and the amount the company puts in on your behalf
It's not a good investment.

 

[BakerMayfield2018]

If you did good or bad , it's still your money in the end. With what many of these pension plans look like and the amount the company puts in on your behalf
It's not a good investment.

Tell em’ slant head!!!

 

[IVE GOTTA PACKAGE 4U]

Tell em’ slant head!!!

The employees and the company are not getting the hang for the buck. Maybe their are a few exceptions but for the most part....NO

 

[Brownslave688]

I've done pretty good in my 401k, but I've spent a lot of time educating myself. I just wonder how many Teamsters do the same, knowing they have a potential pension waiting on them.

BTW, I noticed someone earlier talking about how they made all of their money back, that they lost from 2007-08, going by the current stock market numbers. But I had a financial guy tell me, in order to gain back all you lost from the collapse, you would have to double your earnings from that period in order to get back what you lost. So just because the stock market numbers now are higher than they were pre-2007-08 numbers, we would have to double our gains (not total numbers, but GAINS) from pre-2007-08 highs to the lows afterwards, just to break EVEN.

Like I said, I've done pretty good, but I haven't come close to doubling my losses, in gains.

I'm not crapping on 401k's, I'm just stating the obvious: they are not some golden rescue for us. They are just another financial product that we are told will save us from a bad pension, when they, clearly, are not.

13 Reasons Why Your 401(k) Is Your Riskiest Investment

You didn't lose anything unless you sold.


And having to double your losses in gains percent wise is what he means I'm sure.


12k with a 50% loss is 6k

6k with 100% gain is 12k.


You should have done that no problem.

 

[CoffeeStainedUniform]

You didn't lose anything unless you sold.


And having to double your losses in gains percent wise is what he means I'm sure.


12k with a 50% loss is 6k

6k with 100% gain is 12k.


You should have done that no problem.

My own mother just got into the annuity sales game...I overheard her use the "has to double" line talking about a 10% loss. First I facepalmed, then I gave her a simple math lesson.

 

[Brownslave688]

My own mother just got into the annuity sales game...I overheard her use the "has to double" line talking about a 10% loss. First I facepalmed, then I gave her a simple math lesson.

Duplicate

 

[Brownslave688]

My own mother just got into the annuity sales game...I overheard her use the "has to double" line talking about a 10% loss. First I facepalmed, then I gave her a simple math lesson.

This is also where dollar cost averaging comes in.


Buy all of the way down and keep buying at the bottom and you'll recover much sooner.

 

[Dracula]

You didn't lose anything unless you sold.


And having to double your losses in gains percent wise is what he means I'm sure.


12k with a 50% loss is 6k

6k with 100% gain is 12k.


You should have done that no problem.

What Will It Take to Earn Your Money Back?

You didn't lose any cash, no. But you definitely lost value, which in future terms translates into cash.

Your examples are very small. And your examples demonstrate what my friend was saying. If you took a 50% loss of 6K, it would still take a 100% gain just to get back to your starting point. And while many of us have done well since the downturn, I think you would be extremely hard-pressed to find anyone who had gains of 100%.

The biggest 5 year return I have in my 401k is the S&P 500, which has a return of 14.5%, a far cry from 100%. Hell, I don't have to show you guys, you can check Prudential for yourselves. But a quick Google search will show you that the worst 15 year period ever for the S&P 500 ended in August 2015, and was a net gain of 3.7%.

I'm no math genius, but 3.7% over 15 years is a major negative return. A seriously long way from a 100% return.

 

[Dracula]

This is also where dollar cost averaging comes in.


Buy all of the way down and keep buying at the bottom and you'll recover much sooner.

You can but cheap till the day is long, but that doesn't erase losses. You're just chipping away at what you've already lost. If you can do that at a huge discount, great, but you're still driving uphill.

 

[DriveInDriveOut]

I had a financial guy tell me, in order to gain back all you lost from the collapse, you would have to double your earnings from that period in order to get back what you lost. So just because the stock market numbers now are higher than they were pre-2007-08 numbers, we would have to double our gains (not total numbers, but GAINS) from pre-2007-08 highs to the lows afterwards, just to break EVEN.

....and then he sold you a whole life policy.

Smh.

 

[Brownslave688]

What Will It Take to Earn Your Money Back?

You didn't lose any cash, no. But you definitely lost value, which in future terms translates into cash.

Your examples are very small. And your examples demonstrate what my friend was saying. If you took a 50% loss of 6K, it would still take a 100% gain just to get back to your starting point. And while many of us have done well since the downturn, I think you would be extremely hard-pressed to find anyone who had gains of 100%.

The biggest 5 year return I have in my 401k is the S&P 500, which has a return of 14.5%, a far cry from 100%. Hell, I don't have to show you guys, you can check Prudential for yourselves. But a quick Google search will show you that the worst 15 year period ever for the S&P 500 ended in August 2015, and was a net gain of 3.7%.

I'm no math genius, but 3.7% over 15 years is a major negative return. A seriously long way from a 100% return.

The Dow jones is up almost 400% from its recession low. If you haven't made 100% back you need to see a financial planner.

 

[Brownslave688]

You can but cheap till the day is long, but that doesn't erase losses. You're just chipping away at what you've already lost. If you can do that at a huge discount, great, but you're still driving uphill.

It does erase the loses in a way because it brings your breakeven point way down. Your breakeven point for a 50% loss is a 100% gain. That's only if you don't add any new money in.

The figures here do not matter at all I'm keeping them small to make the math easy. The math is the same no matter what.


I have 20k in stock XYZ I bought at $100 It drops to $50. If I leave this be I need a 100% gain to break even. BUT let's say At $50 I buy another 20k. Now I have just significantly decreased the gains I need to break even. Now I only need a 50% gain to break even and if the stock gets back to $100 I've made a good amount of money.