Pension deductions?

[Brownslave688]

The problem, at least with our pension fund, is 5,000 more retirees than actives.

But that wouldn't be a problem if those retirees had enough money put in on their behalf.

 

[IVE GOTTA PACKAGE 4U]

But that wouldn't be a problem if those retirees had enough money put in on their behalf.

They didn't put in the money that they are getting. They are getting far more than what they out in. When I started the pension contribution was around $50 a week now it's ten times that.

 

[UpstateNYUPSer(Ret)]

But that wouldn't be a problem if those retirees had enough money put in on their behalf.

That's not how pensions work and you know it.

 

[104Feeder]

And yes you don't have clue. Once again lots of words little substance. You failed almost immediatly. Even Roth withdrawals before 59.5 are subject to taxes.


Also you failed on giving any tax advantage. The pension is taxed as income just like my 401k would be. So if we had a defined contribution plan i would essentially have two 401k. One with the company's money in it and a Roth with my money in it. EXACT SAME SCENARIO YOU LISTED. The difference is instead of being forced to take a 5k a month payment every month I have the freedom to do what I choose with the money.


Personally I would buy high divedend stocks and live off of the divedends. So not only am I not touching my principle I'm reducing my tax burden and paying capital gains only.


The only place you have me is retiring at 50. While that may be a common occurance in the WC. I can assure you going before age 57 is a very rare occurance for the rest of the country.

Where did I say to withdraw any 401k money prior to 59.5? However, you are wrong on Roth withdrawals prior to age 59.5. Only the earnings portion of a withdrawal is taxable, not the principal as you already paid taxes on that money. It is considered an "unqualified" withdrawal and you calculate the taxable portion this way:

To calculate the portion of the withdrawal attributable to earnings, simply multiply the withdrawal amount by the ratio of total account earnings to account balance. If your account balance is $10,000, comprised of $9,000 in contributions and $1,000 in earnings, then your earnings ratio is $1,000 / $10,000, or 0.10. Therefore, a $4,000 withdrawal would include $400 in taxable earnings, which would need to be included in the gross annual income reported to the IRS on your taxes.

Got it?

Apparently you do not have a decent PEER program. Even working 2.5 years longer than necessary under your plan is unbearable in my eyes. Most of our retirees leave on schedule, some stay 3-5 years after for personal reasons, and we have a diehard few who are triple-dipping. I'll take PEER 80 anyday over your scenario, which apparently puts most of your retirees in their 60's. No thanks!

 

[Brownslave688]

That's not how pensions work and you know it.

It's how a properly ran pension runs.


It's how mine is ran and @Turdferguson is ran.

 

[IVE GOTTA PACKAGE 4U]

Where did I say to withdraw any 401k money prior to 59.5? However, you are wrong on Roth withdrawals prior to age 59.5. Only the earnings portion of a withdrawal is taxable, not the principal as you already paid taxes on that money. It is considered an "unqualified" withdrawal and you calculate the taxable portion this way:
Got it?

Apparently you do not have a decent PEER program. Even working 2.5 years longer than necessary under your plan is unbearable in my eyes. Most of our retirees leave on schedule, some stay 3-5 years after for personal reasons, and we have a diehard few who are triple-dipping. I'll take PEER 80 anyday over your scenario, which apparently puts most of your retirees in their 60's. No thanks!

If you withdrawal any if your Roth earnings before 59.5 you will pay a 10% penalty that's a tax. You are correct that you can withdrawal the original contributions at any time.

You can also take out money from your 401k plan before age 59.5 if you are retired from that employer.
Of course you will still have to pay taxes.

 

[104Feeder]

Defined contribution does not depend on an employees participation for a match. The money goes into the account as long as they work the hours. End of story.

Really? So I just made up that whole IRS rule about what an employer can contribute, you know, the lesser of 25% or $53,000. So in your world, I work one day and somehow $20,800 is deposited in my account?

This is my favorite quote about defined contribution plans:

In general, a DC plan provides much less security for the employee, and much less obligation for the employer, than a pension.

 

[104Feeder]

If you withdrawal any if your Roth earnings before 59.5 you will pay a 10% penalty that's a tax. You are correct that you can withdrawal the original contributions at any time.

You can also take out money from your 401k plan before age 59.5 if you are retired from that employer.
Of course you will still have to pay taxes.

The penalty can easily be avoided with a rollover, then a withdrawal.

 

[IVE GOTTA PACKAGE 4U]

The penalty can easily be avoided with a rollover, then a withdrawal.

No it can't.
Unless you do a 72t , they you will be forced to take a a fixed amount out for five years.

The Roth money is gold. You don't touch it till later on in life.

 

[Brownslave688]

Where did I say to withdraw any 401k money prior to 59.5? However, you are wrong on Roth withdrawals prior to age 59.5. Only the earnings portion of a withdrawal is taxable, not the principal as you already paid taxes on that money. It is considered an "unqualified" withdrawal and you calculate the taxable portion this way:
Got it?

Apparently you do not have a decent PEER program. Even working 2.5 years longer than necessary under your plan is unbearable in my eyes. Most of our retirees leave on schedule, some stay 3-5 years after for personal reasons, and we have a diehard few who are triple-dipping. I'll take PEER 80 anyday over your scenario, which apparently puts most of your retirees in their 60's. No thanks!

I purposely left out the earnings part. See I can play with words too.

I'm happy the WC has the deal they have but it's simply not what 99% of the rest of us are looking at. The western is the only time I've heard of PEER. The math of retiring at 50 eventually catches up with all pension funds.


Also you were wrong on employer contributions. Only stipulation is combined 53k or 100% of the employees earnings. Whichever is less.

 

[Brownslave688]

Really? So I just made up that whole IRS rule about what an employer can contribute, you know, the lesser of 25% or $53,000. So in your world, I work one day and somehow $20,800 is deposited in my account?

This is my favorite quote about defined contribution plans:

Yes you did make up that rule. And you just made up that I said work one day and it magically goes in.


It would be a weekly contribution based on hours worked.

 

[104Feeder]

No it can't.

I actually just spoke to a member who had to make hardship withdrawals. The 10% penalty applied to the earnings portion of his Roth, not the principal. Prudential will withhold it anyway, but it was returned when he filed his taxes.

 

[IVE GOTTA PACKAGE 4U]

I actually just spoke to a member who had to make hardship withdrawals. The 10% penalty applied to the earnings portion of his Roth, not the principal. Prudential will withhold it anyway, but it was returned when he filed his taxes.

You said rollover not hardship withdrawal.


Only certain things qualify


401(k) Hardship Withdrawal | Hardship Loans

 

[Ms.PacMan]

Our pensions are portable throughout the Western Conference to any covered employer. ABF, Safeway, & Waste Management are some local examples.

The participation rates for 401k's across the board do not bear out your foolproof assumption. Even when free money is on the table, most do not participate. Only 32% of workers age 25-64 participate in employer sponsored 401k plans (2011).

You've been missing the point that we have been trying to get thru to you - participation in these scenarios would be compulsory.

If you could give me some rough estimates of your pension contributions thru the years I can backtest it with the money invested in the S&P 500 from the year you started until now.

You can't blame us for thinking of alternatives when our pensions have failed.

 

[104Feeder]

I purposely left out the earnings part. See I can play with words too.

I'm happy the WC has the deal they have but it's simply not what 99% of the rest of us are looking at. The western is the only time I've heard of PEER. The math of retiring at 50 eventually catches up with all pension funds.


Also you were wrong on employer contributions. Only stipulation is combined 53k or 100% of the employees earnings. Whichever is less.

Oh please. I think you should be playing Words with Friends.

Contribution Limits

Contributions you make for 2015 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $53,000. Compensation generally does not include your contributions to the SEP. The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants.

Publication 560 (2015), Retirement Plans for Small Business

There are additional contributions made to pay for the PEER 80. In addition, the Company makes contributions for all probationary employees into the PEER.

 

[IVE GOTTA PACKAGE 4U]

You've been missing the point that we have been trying to get thru to you - participation in these scenarios would be compulsory.

If you could give me some rough estimates of your pension contributions thru the years I can backtest it with the money invested in the S&P 500 from the year you started until now.

You can't blame us for thinking of alternatives when our pensions have failed.

Amen.
It's depressing, no doubt.

 

[104Feeder]

You said rollover not hardship withdrawal.


Only certain things qualify


401(k) Hardship Withdrawal | Hardship Loans

You can roll it over into a Roth IRA without such strict hardship withdrawal requirements.

 

[IVE GOTTA PACKAGE 4U]

You can roll it over into a Roth IRA without such strict hardship withdrawal requirements.

Why would you want to tap into any Roth money first. Let that sucker grow tax free.

 

[104Feeder]

You've been missing the point that we have been trying to get thru to you - participation in these scenarios would be compulsory.

If you could give me some rough estimates of your pension contributions thru the years I can backtest it with the money invested in the S&P 500 from the year you started until now.

You can't blame us for thinking of alternatives when our pensions have failed.

No, I haven't. I'm sorry about your pension plans, but I won't apologize for mine.
Someone already did it for you:
http://www.wctpension.org/downloads/documents/401k_vs_WCTPT_Ten_Year_Analysis.pdf

 

[104Feeder]

Why would you want to tap into any Roth money first. Let that sucker grow tax free.

We are going in circles. I wouldn't want to tap into it at all, but BS somehow seems to think you should be able to, or is happy about working 41+ years for the company (friend-That). What you guys should be doing is fixing your pension plan not abandoning it.