You know one thing that I've always wondered on this board? Just how long can a topic title be? That one in the music

[The Man]

Originally posted by Sloats
401(k) have destroyed retirement security in this nation.

I guess I'll wait until I actually understand the industry to say you are an idiot, but it sure seems that way.

Being allowed to put in money pre-taxed and matched by my employer sure seems like a better idea than putting all my hope in the governmental Social Security ponzi scheme

[Suzie]

Originally posted by Sloats
401(k) have destroyed retirement security in this nation.

please pontificate.

[diceisgod]

I don't understand anything, but I know he's an idiot.

[Suzie]

Originally posted by The Man

Being allowed to put in money pre-taxed and matched by my employer

legally your employer doesn't HAVE to match your contribution, it's done at each company's discretion.

[The Man]

yeah. But it's cool that most do. I don't even know what my company matches.

And 401Ks own. In fact, since I've been out of work for a while I meet the threshold for Roth IRAs so I'm going to move my 401K to a Roth IRA

[diceisgod]

Why don't you two get a room?

[The Man]

someday

[Sloats]

Originally posted by The Man

Originally posted by Sloats
401(k) have destroyed retirement security in this nation.

I guess I'll wait until I actually understand the industry to say you are an idiot, but it sure seems that way.

Being allowed to put in money pre-taxed and matched by my employer sure seems like a better idea than putting all my hope in the governmental Social Security ponzi scheme

Social Security was only meant as a supplement, not a full replacement of postretirement wages. Approx 15% Replacement. Plus they were not pre- funded by those who are receiving. Now the check is due.

Pension plans were meant to provide the majority of retirement income. However, an obscure law slipped into a bill set up 401(k). It was not intended to become a retirement savings plan, but it did.

The major differences between DB and DC:
DB the employer takes on the investment risk, is additional compensation. DC the EE must elect their investment stategy and is paid from their wages (with match in some cases).

The problem is that a majority of ERs (employers) did not sense much value of the pension plan. What does Final Average 5 times 2% time 25 Years of Service mean to some mathmatical illiterate at age 45? But rather than try to educate their EEs, an ER can just set up a DC plan and say: Your Benefit is $12,000.

So DB plans were terminated and converted into DC plans in the 80's, eliminating provisions and procedures necessary for a DB plan (PBGC, Actuaries, etc...). THIS IS WHERE CASH BALANCE PLANS EVOLVED. Not from a desire of the employer to screw employees, but out of a desire to retain invesment risk. But I digress.

How does this mean a death of Retirement Benefits? Well, like every other Gen Xer, I'm dropping 15% of my wages into my DC plan with a piddly 1.5% match. To reach my desired 60% replacement, I have to pay for 55% (of the 60%) of it myself. In addition, I am assuming the investment risk, which was negative the past two years. I lost money. I have to contribute more. Plus what is going to happen when I turn 45/50? 1) I have lost any Early Retirement Subsidies traditionally offered in DB plans, 2) (More importantly) The Baby Boomers will start withdrawing their money from the stock market. So, here I am 10 years away from retirement, and I am expecting to lose 10%-20% because the fucking yuppies will crash the system by liquidating their portfolios.

Security is lost because an individual is 100% reliant on the stock market for their retirement and not a balance (a diversification) in the company that they worked for and the stock market.

[The Man]

why should any company be responsible for your retirement.

They pay you to work there. Why is it assumed that every company owes their employees above and beyond that? pension, Xmas bonus, days off when the weather is bad, other bullshit.

You work. They pay. You want to make sure you have money when you are old: save some. Why should your company have to take care of you. Why should strangers take care of you (social security).

[Suzie]

You could hold it in money market or a fixed-rate option if volatility is your concern.

Originally posted by The Man
yeah. But it's cool that most do. I don't even know what my company matches.

And 401Ks own. In fact, since I've been out of work for a while I meet the threshold for Roth IRAs so I'm going to move my 401K to a Roth IRA

Just wait, coming in 2006:


ROTH 401Ks!!!!!!!!