401 Ks helping create inequality

Thing1 said:
If employees get pensions, chances are they are paying for them in some form or another.

It's really not that different from having a 401K. With 401K's, the company match is a big deal - companies that don't match will lose a competitive advantage in the marketplace for good employees.

And if you're worried about retirement, you should support privatizing social security.
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Defined benefit plans are vastly different from defined contribution plans with respect to the allocation of risk (and in terms of the cost of administration).
 
Superfreak said:
So you think the government and your employer should be responsible for you? Rather than you being responsible for yourself?
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I certainly don't think your government and your employer should benefit from people having no ability to care for themselves in old age.


what happens to the people who don't do well with their investments?
 
So the fundamental question is who should be responsible for saving for ones retirement?

The individual?
Their employer?
The gobblement?

I say the individual.

Whether a 401K is the best vehicle is irrelevant until you answer that question
 
they want the people who are shitty at investing and understanding finances to just die hungry and cold in the streets.

thatal learn um huh
 
Dungheap said:
The intent was to allow highly compensated employees save money on a tax free basis as deferred compensation. It was not designed to replace the defined benefit pension. A few years after the provision passed, companies figured out that they could use it as a means to make defined contributions (matching funds) in lieu of having defined benefit pensions, but that's not why section 401k was originally passed into law.

Also, too, why should individuals shoulder market risk? I don't understand that at all. It's, like, completely ass backwards.
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wrong again chuckles...

It was designed to get the middle class investing in the market. To encourage them to save on their own. To get them away from the pension plan format. It most certainly was the design of the government officials that passed it. Which is precisely why they began the shift over from CERS to FERS. The writing was on the wall in the 70's due to the bear market of 66-82... by the late 70's the flaw in pensions was highly visible. Especially to the government who was facing the greatest unfunded liabilities.

They should shoulder it because it is THEIR retirement. Not the company's, not the governments. It is theirs.
 
evince said:
starving old people may be OKy dokey with you super duper but not all of us are sociopaths
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dear sociopath who wants to bomb innocent brown people in Syria...

Do you understand that 401ks are not going to starve old people? No, you don't understand that because you are a fucking moron.
 
Superfreak said:
wrong again chuckles...

It was designed to get the middle class investing in the market. To encourage them to save on their own. To get them away from the pension plan format. It most certainly was the design of the government officials that passed it. Which is precisely why they began the shift over from CERS to FERS. The writing was on the wall in the 70's due to the bear market of 66-82... by the late 70's the flaw in pensions was highly visible. Especially to the government who was facing the greatest unfunded liabilities.
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We can agree to disagree as to whether 401k was intended to replace the defined benefit pension.


Superfreak said:
They should shoulder it because it is THEIR retirement. Not the company's, not the governments. It is theirs.
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But why is that sensible? I mean hooray FREEDOM and all that, but why is it a sensible policy?
 
Dungheap said:
We can agree to disagree as to whether 401k was intended to replace the defined benefit pension.




But why is that sensible? I mean hooray FREEDOM and all that, but why is it a sensible policy?
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I can only speak for myself but I support social security. I don't want to see a bunch of old age homeless people in the streets. S.S. at least gives a bare means of subsistence to those who have worked and saved nothing. I do not think it is a company's responsibility though, especially in an uber-competitive global environment, to be forced to pay for an individual's retirement. I think it's great if they contribute to an employees 401K but the defined benefit plan in a global economy does not benefit the employer which ultimately hurts the workers.

I do not think it an undue burden for people to have to save for their own retirement beyond S.S.
 
evince said:
they want the people who are shitty at investing and understanding finances to just die hungry and cold in the streets.

thatal learn um huh
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Just because you didn't know what passive income is doesn't mean everyone is ignorant.

Should people trust the gobblement that is $69 trillion in debt? How does that make sense?

Don't you trust yourself?
 
Dungheap said:
We can agree to disagree as to whether 401k was intended to replace the defined benefit pension.
But why is that sensible? I mean hooray FREEDOM and all that, but why is it a sensible policy?
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You can disagree all you want. The moves by big businesses and the federal government show what the intent was.

Why? Because you put cities, states, the Fed, the corporations all on the hook with no individual responsibility with pensions. When you have idiots (especially in the government) who then project insane rates of return in order to justify funding the pensions less each year (not to mention being able to promise more to their employees), you end up with debacles like we see currently in Detroit. Like we saw with the autos, like we see with so many states. You are setting up a system for failure.

When you put the money in the hands of the individual (who by the way still has SS as their fall back) then it is up to each individual to make investment decisions. Which is how it should be given that we all have different levels of risk tolerance, different retirement lifestyles, etc...
 
Superfreak said:
So you think the government and your employer should be responsible for you? Rather than you being responsible for yourself?
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I have a pretty all-consuming job. It's a great job. It doesn't give me time to go off and get an advanced degree in finance, so I can learn how best to invest my money. It doesn't give me time to go out and interview CFOs at various companies so I can decide where to invest my money. I have other obligations than watching my stocks hour by hour.

I accept a low return for what I've paid in social security because it's safe - or relatively safe.

I would love to have a company handling the pension fund - as long as it's a solid company that funds it appropriately - because I assume they can hire a heckuvalot better financial adviser than I can.

The thought of 300 million americans trying to invest their social security money in private funds makes me shudder - a) it's highly inefficient - think of all the fees that would have to be paid and b) WE DON'T HAVE THE INFO.

Those of us not living on Wall St. don't have the info. We saw how well individual investments worked in the crash of 2001. And the crash of 2007/2008.

My current company doesn't do pensions; so I have my 401K with the company they picked and have targeted the fund that's supposed to do best for someone retiring when I am due to retire. The rest is keeping my fingers crossed.

I do have another 401K which is basically the rollover of past companies, and it is with a firm/adviser I've picked, rightly or wrongly.

We're all out here doing our best; but if you don't want to see old people starving on the streets, yes, you should look to the corps and govt to take some responsibility for the workers.

Remember how much equity was wiped out in the housing crash in 2007/2008? the "average investor" had no clue about the games the companies were playing. We didn't have the info.

Sadly, looks like many companies played along with the hype - but they should have known better.
 
tekkychick said:
I have a pretty all-consuming job. It's a great job. It doesn't give me time to go off and get an advanced degree in finance, so I can learn how best to invest my money. It doesn't give me time to go out and interview CFOs at various companies so I can decide where to invest my money. I have other obligations than watching my stocks hour by hour.

I accept a low return for what I've paid in social security because it's safe - or relatively safe.

I would love to have a company handling the pension fund - as long as it's a solid company that funds it appropriately - because I assume they can hire a heckuvalot better financial adviser than I can.

The thought of 300 million americans trying to invest their social security money in private funds makes me shudder - a) it's highly inefficient - think of all the fees that would have to be paid and b) WE DON'T HAVE THE INFO.

Those of us not living on Wall St. don't have the info. We saw how well individual investments worked in the crash of 2001. And the crash of 2007/2008.

My current company doesn't do pensions; so I have my 401K with the company they picked and have targeted the fund that's supposed to do best for someone retiring when I am due to retire. The rest is keeping my fingers crossed.

I do have another 401K which is basically the rollover of past companies, and it is with a firm/adviser I've picked, rightly or wrongly.

We're all out here doing our best; but if you don't want to see old people starving on the streets, yes, you should look to the corps and govt to take some responsibility for the workers.

Remember how much equity was wiped out in the housing crash in 2007/2008? the "average investor" had no clue about the games the companies were playing. We didn't have the info.

Sadly, looks like many companies played along with the hype - but they should have known better.
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What a copout. Something as important as your retirement and you don't have time? Here is a thought. Spend less time here and more time educating yourself.

It is all about priorities. You seem to have chosen a message board over your financial security. Very telling indeed
 
Mott the Hoople said:
Well the inequalities with 401K investments is that I know simply to many people who don't feel that they can invest in one. Particularly families with kids.

For those who can invest, $100,000 is the magic number. No, you can't retire on that. It's the magic number because that's when market gains over time become more and more magnified. If you can have $100,000 in a 401K, given the history of the US Market, and you continue to invest and recieve company matches till you reach retirement age, you have a very high probability of meeting the 80% of pre-retirement income goal. Even if you don't recieve a company match and you continue to invest at the same rate you still have a high probability of meeting that goal.
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I felt like I needed to invest heavily in a 401k as soon as I started work at 21. I was able to do it because I chose to forego health insurance until I was 35. Couldn't do that now.

Now I have a pension, a 401k that's doing pretty good, and health insurance.
 
tekkychick said:
I have a pretty all-consuming job. It's a great job. It doesn't give me time to go off and get an advanced degree in finance, so I can learn how best to invest my money. It doesn't give me time to go out and interview CFOs at various companies so I can decide where to invest my money. I have other obligations than watching my stocks hour by hour.

I accept a low return for what I've paid in social security because it's safe - or relatively safe.

I would love to have a company handling the pension fund - as long as it's a solid company that funds it appropriately - because I assume they can hire a heckuvalot better financial adviser than I can.

The thought of 300 million americans trying to invest their social security money in private funds makes me shudder - a) it's highly inefficient - think of all the fees that would have to be paid and b) WE DON'T HAVE THE INFO.

Those of us not living on Wall St. don't have the info. We saw how well individual investments worked in the crash of 2001. And the crash of 2007/2008.

My current company doesn't do pensions; so I have my 401K with the company they picked and have targeted the fund that's supposed to do best for someone retiring when I am due to retire. The rest is keeping my fingers crossed.

I do have another 401K which is basically the rollover of past companies, and it is with a firm/adviser I've picked, rightly or wrongly.

We're all out here doing our best; but if you don't want to see old people starving on the streets, yes, you should look to the corps and govt to take some responsibility for the workers.

Remember how much equity was wiped out in the housing crash in 2007/2008? the "average investor" had no clue about the games the companies were playing. We didn't have the info.

Sadly, looks like many companies played along with the hype - but they should have known better.
Click to expand...

I hear you on the being busy part. For those that work really long hours spending what little free time you have on financial planning is about the last thing anyone wants to do and I'm speaking for myself on that as well.

Having just gotten married I've been going through what I'm sure you had to do and that's spend a bunch of time with the partner (trying to) figur(e)ing out our financial future. I'm not a CFA or a stock guru as I would surmise most others aren't as well. But I do know we need to set aside a certain amount each month for future children's education and retirement. That includes doing 401K's. I'm pretty content doing a generic mutual fund that mirrors the S&P in my 401K. Nothing fancy and I don't have to be an expert to choose it and barring a total market collapse not a real high risk choice. If I'm able to do that I know most others can.
 
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