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Tue Feb 23, 2016, 08:18 AM

White workers have nearly five times as much wealth in retirement accounts as black workers

http://www.epi.org/publication/white-workers-have-nearly-five-times-as-much-wealth-in-retirement-accounts-as-black-workers/

Since the rise of 401(k)s in the early 1980s, the retirement gap between black and white workers has widened. Before 401(k)s took off, black and white workers had similar rates of participation in retirement plans
. In 1983, 53 percent of white workers and 52 percent of black workers age 32-61 (the age range during which most workers would be expected to save for retirement before becoming eligible for reduced Social Security benefits) participated in an employer-based plan.

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Reply White workers have nearly five times as much wealth in retirement accounts as black workers (Original post)
eridani Feb 2016 OP
Erich Bloodaxe BSN Feb 2016 #1
hobbit709 Feb 2016 #2
eridani Feb 2016 #3
Nuclear Unicorn Feb 2016 #5
eridani Feb 2016 #6
Nuclear Unicorn Feb 2016 #10
eridani Feb 2016 #14
Nuclear Unicorn Feb 2016 #15
eridani Feb 2016 #17
Nuclear Unicorn Feb 2016 #25
Bluenorthwest Feb 2016 #32
eridani Feb 2016 #36
Nuclear Unicorn Feb 2016 #37
eridani Feb 2016 #38
Nuclear Unicorn Feb 2016 #39
eridani Feb 2016 #40
Nuclear Unicorn Feb 2016 #44
eridani Feb 2016 #45
Nuclear Unicorn Feb 2016 #46
eridani Feb 2016 #47
Nuclear Unicorn Feb 2016 #48
eridani Feb 2016 #49
Nuclear Unicorn Feb 2016 #50
eridani Feb 2016 #51
Nuclear Unicorn Feb 2016 #52
eridani Feb 2016 #54
Nuclear Unicorn Feb 2016 #60
Travis_0004 Feb 2016 #70
Adrahil Feb 2016 #73
Adrahil Feb 2016 #72
meaculpa2011 Feb 2016 #74
GummyBearz Feb 2016 #75
Bettie Feb 2016 #4
TipTok Feb 2016 #7
eridani Feb 2016 #8
KentuckyWoman Feb 2016 #11
TipTok Feb 2016 #13
gollygee Feb 2016 #33
WhaTHellsgoingonhere Feb 2016 #9
eridani Feb 2016 #12
WhaTHellsgoingonhere Feb 2016 #18
eridani Feb 2016 #19
WhaTHellsgoingonhere Feb 2016 #23
HughBeaumont Feb 2016 #16
alarimer Feb 2016 #20
HughBeaumont Feb 2016 #24
restorefreedom Feb 2016 #21
bigwillq Feb 2016 #22
whatthehey Feb 2016 #26
Trajan Feb 2016 #28
whatthehey Feb 2016 #30
LiberalArkie Feb 2016 #34
GOLGO 13 Feb 2016 #35
eridani Feb 2016 #42
Recursion Feb 2016 #56
eridani Feb 2016 #58
Recursion Feb 2016 #61
GOLGO 13 Feb 2016 #77
eridani Feb 2016 #41
Recursion Feb 2016 #53
eridani Feb 2016 #57
Recursion Feb 2016 #59
cascadiance Feb 2016 #76
MagickMuffin Feb 2016 #27
Trajan Feb 2016 #29
MagickMuffin Feb 2016 #31
eridani Feb 2016 #43
Recursion Feb 2016 #55
eridani Feb 2016 #62
Recursion Feb 2016 #63
eridani Feb 2016 #64
Recursion Feb 2016 #65
eridani Feb 2016 #66
Recursion Feb 2016 #67
eridani Feb 2016 #68
Recursion Feb 2016 #69
One_Life_To_Give Feb 2016 #71

Response to eridani (Original post)

Tue Feb 23, 2016, 08:48 AM

1. I'd be interested to see the spread in those retirement accounts within the white population.

I suspect there's a lot of white people with $0 in such. I know I never had a 401k, and had to drain both my IRA's down to zero thanks to losing my job in the early days of Obama's term of office.

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Response to eridani (Original post)

Tue Feb 23, 2016, 08:49 AM

2. What's five times zero?

Because that's what's left of mine.

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Response to eridani (Original post)

Tue Feb 23, 2016, 08:51 AM

3. The switch to 401(k)s hurts everyone, but black people still take the brunt of it n/t

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Response to eridani (Reply #3)

Tue Feb 23, 2016, 09:03 AM

5. How does people saving their own money hurt others?

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Response to Nuclear Unicorn (Reply #5)

Tue Feb 23, 2016, 09:04 AM

6. Not having a defined benefits pension hurts people who don't make enough to save n/t

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Response to eridani (Reply #6)

Tue Feb 23, 2016, 09:12 AM

10. Many jobs do not offer 401(k)s. It's an incentive offered by employers to attract workers.

Like expense accounts, cars, phones, etc. Those offered those benefits will -- well -- benefit from them but it doesn't hurt others.

If employers aren't offering jobs with 401(k)s to blacks because they're black that's a different issue that has nothing to do with 401(k)s.

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Response to Nuclear Unicorn (Reply #10)

Tue Feb 23, 2016, 09:23 AM

14. Many jobs don't offer defined benefit pensions either

They used to, and things have gotten worse for everyone since they stopped.

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Response to eridani (Reply #14)

Tue Feb 23, 2016, 09:26 AM

15. Okay, but that's not an unfairness issue. That's employers not being able to offer a benefit.

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Response to Nuclear Unicorn (Reply #15)

Tue Feb 23, 2016, 09:27 AM

17. By choosing shareholders over employees n/t

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Response to eridani (Reply #17)

Tue Feb 23, 2016, 11:23 AM

25. Not to draw too fine a point but 401(k) accounts are investments, making employees shareholders.

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Response to Nuclear Unicorn (Reply #25)

Tue Feb 23, 2016, 11:46 AM

32. And defined pension plans are massive collective investments making the Plan giant shareholders

 

In addition, defined pension plan participants are fully free to invest as individuals as well creating their own set of investments, perhaps with a touch more risk because that defined plan steers the moderate course.....any employee who wants to be a shareholder just needs to go buy shares. The boss does not have to help you buy them and the shares should not be just in your own company. Ask the good people at Enron about that.

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Response to Nuclear Unicorn (Reply #25)

Thu Feb 25, 2016, 05:15 AM

36. Yeah, right. The 1% own most shares

Normal people own very little of the stock market.

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Response to eridani (Reply #36)

Thu Feb 25, 2016, 05:23 AM

37. There's over $18 trillion in retirement accounts, only $5 trillion of which are in IRAs

That means the remaining $15+ trillion are in invested accounts such as 401(k)s.

The rich may be rich but they don't have $15 trillion sunk into retirement accounts (not that they need them because, you know, they're rich). This is a fight that will do nothing but alienate the middle class.

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Response to Nuclear Unicorn (Reply #37)

Thu Feb 25, 2016, 05:27 AM

38. You mean the people who have less than $5000 in savings will have hurt feefees?

Somehow I doubt it.

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Response to eridani (Reply #38)

Thu Feb 25, 2016, 05:35 AM

39. What do you propose should happen to the $15 trillion in invested retirement accounts?

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Response to Nuclear Unicorn (Reply #39)

Thu Feb 25, 2016, 05:37 AM

40. What percentage of this is actually in the stock market? n/t

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Response to eridani (Reply #40)

Thu Feb 25, 2016, 05:44 AM

44. Around 60%; so, around $9 trillion.

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Response to Nuclear Unicorn (Reply #44)

Thu Feb 25, 2016, 05:45 AM

45. How nice for the top 10% who own 90% of stock market value

Not so nice for the rest of us.

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Response to eridani (Reply #45)

Thu Feb 25, 2016, 05:49 AM

46. Again, it's not the 1% who are invested in 401(k)s. They don't need them.

Also, there are legislated limits to the amount that can be contributed. If the rich want to shelter their money there are better methods, just ask Warren Buffet. You're picking an envy-based fight that isn't even directed at the rich but rather would only alienate the middle class.

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Response to Nuclear Unicorn (Reply #46)

Thu Feb 25, 2016, 05:50 AM

47. The top 10% is NOT the middle class

It's about time the bottom 90% stopped getting fucked over.

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Response to eridani (Reply #47)

Thu Feb 25, 2016, 06:06 AM

48. I didn't say the top 10% is middle class; I said the middle class are the ones invested in 401(k)s.

Your crusade against 401(k)s isn't going to disturb the rich in the least. The rich have much more lucrative pursuits than some piddling 401(k).

I don't know what you imagine happening to $9 trillion in worker retirement accounts but you're only going to piss them off if you start making eyes towards their money and if you force their money out of the markets then you will be forcing the companies they work for to give up $9 trillion in capitalization. There is no economy in the world that can withstand a $9 trillion de-capitalization. The workers you profess to champion would all be out of jobs and the politicians that made it happen would all be hung from the nearest streetlamps.

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Response to Nuclear Unicorn (Reply #48)

Thu Feb 25, 2016, 06:08 AM

49. I see. we hve no choice but to play the game the way our owners want us to.

Not buying it.

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Response to eridani (Reply #49)

Thu Feb 25, 2016, 06:11 AM

50. What are your plans for $9 trillion in operating capital?

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Response to Nuclear Unicorn (Reply #50)

Thu Feb 25, 2016, 06:13 AM

51. Invest it in Social Security.

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Response to eridani (Reply #51)

Thu Feb 25, 2016, 06:31 AM

52. So, you would rip $9 trillion out of the operating finances of companies and

stuff it in a lock box that does nothing (assuming the money doesn't get spent because no gang of politicians is going to sit and stare at $9 trillion without trying to slide their hand up its skirt). Meanwhile, the companies that used to have that money will have to cut their operating budgets in order to satisfy your seizure. That means they will shutdown $9 trillion worth of production. Less production means less need for workers.

Not every company listed in the stock exchange is like Goldman Sachs. The overwhelming majority actually have to provide tangible goods and services in order for their stock to have any value. The more/better they produce and sell the more they are worth. That's real value and it's honestly earned. It's not CEO salaries; it's the value of resources, labor and projected consumer demand.

Remember: Workers and vendors must be paid before sales can be made. If you can't pay them then you will have no workers or resources and thus no product. No product means no sale. No sale means no revenue. No revenue means bankruptcy.

That is what you're proposing to destroy and you won't even be touching the rich because -- as I keep saying -- the rich don't invest through 401(k)s. The real rich, the ones you don't like, will just shift their investments to markets outside your legislative reach. You'll either end up in the crap-hole like Venezuela or backpedaling like France once the capital flight kicks in.

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Response to Nuclear Unicorn (Reply #52)

Thu Feb 25, 2016, 06:35 AM

54. The OP was about how things got much worse for people when defined--

--benefits pensions got replaced by 401(k)s. Companies don't just let funds reserved for those pensions sit there, you know.

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Response to eridani (Reply #54)

Thu Feb 25, 2016, 06:43 AM

60. "Companies don't just let funds reserved for those pensions sit there"

Yes, that's why $9 trillion is invested in the market with the remainder going to Munis and T-bills (those would be local, state and federal government services). When you're done ripping $9 trillion out of companies' operating capital you'll be tearing another $6 trillion out of the bonds of cities and states.

That would be some Charlie Sheen-level #winning

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Response to eridani (Reply #51)

Thu Feb 25, 2016, 07:39 AM

70. And I bet social security wouldnt get a dime

 

I would close my 401k so fast, pay the taxes, and throw it in an investment account, as would just about everybody else.

Social security gets almost nothing, but now you have taken away a path for me to have a great retirement.

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Response to eridani (Reply #47)

Thu Feb 25, 2016, 10:10 AM

73. Nonsense.

 

I am in the top 10%. Now I won;t deny I am doing better than the average bear. But I am hardly wealthy. I drive an 11 year old car, and a 6 year old car. I live in a nice house, but not a McMansion. My kid attends public school. I do take a decent vacation every other year, and we do visit the grandparents a couple times a year, but that's pretty much our only luxuries.

I live what used to be considered a pretty ordinary middle-class (admittedly upper-middle-class) lifestyle. The problem is that people like me screwing over the bottom 90%. The problem is that people like me are getting too damned rare.

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Response to eridani (Reply #6)

Thu Feb 25, 2016, 10:05 AM

72. There a re problems with defined benefit plans....

 

...not the least of which is what happens when they simply disappear, leaving the worker with nothing.

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Response to Adrahil (Reply #72)

Thu Feb 25, 2016, 10:19 AM

74. My uncle's union pension disappeared last year...

after he put in 45 years on the job.

He retired at age 72 and collected for three years before the pension went bankrupt and his monthly benefit shrunk to 20%.

The 20% that's left is the maximum allowed by the federal pension guaranty fund.

I wonder how long that will last.

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Response to Adrahil (Reply #72)

Thu Feb 25, 2016, 10:29 AM

75. Yep

 

Some people think pensions are a magical entity that just spits out money forever. They seem to forget every worker actually paid into it, and they depend on the company continuously growing in order to support more and more retirees. As soon as that stops happening for long enough, the pension goes bye-bye along with every nickle the retired have paid into it. I'll stick with a 401k that I at least have complete control over and can budget around

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Response to eridani (Original post)

Tue Feb 23, 2016, 08:52 AM

4. I'm betting that among white people

the 401K money is spread among a pretty small pool of people too, because most of the people I know have virtually nothing in those accounts.

I know very few people who can imagine ever retiring, simply because they will need to work until death to keep paying the bills.

I imagine that among the black and other minority communities the small amounts in such accounts are also concentrated among the highest earners as well.

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:06 AM

7. I wonder how much of that is driven by having a culture...

 

... Of financial education.

While it isn't very high across America, maybe it is higher in one group than the other?

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Response to TipTok (Reply #7)

Tue Feb 23, 2016, 09:07 AM

8. I'd say it's driven by not having money n/t

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Response to eridani (Reply #8)

Tue Feb 23, 2016, 09:16 AM

11. ...

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Response to eridani (Reply #8)

Tue Feb 23, 2016, 09:21 AM

13. That's part of it...

 

... But I suspect not all of it.

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Response to TipTok (Reply #7)

Tue Feb 23, 2016, 11:52 AM

33. Wealth is generational

Here's an article: http://everydayfeminism.com/2014/05/income-vs-wealth/

If you go back to WWII, white GIs were the only ones who benefitted from the GI bill. (Info about that here http://www.demos.org/blog/11/11/13/how-gi-bill-left-out-african-americans )

So if your grandparents were able to buy a home because of the GI bill, they were able to begin to create wealth - a home to borrow against to fund education, money to pass on to grandkids, etc. Because of housing discrimination, African Americans could not use the GI bill to buy homes in the only places available to them - homes in redlined areas. They could not accumulate wealth for their kids and grandkids.

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:11 AM

9. Therein lies the answer to why Bernie's campaign doesn't resonate with blacks

 

but does with whites.

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Response to WhaTHellsgoingonhere (Reply #9)

Tue Feb 23, 2016, 09:19 AM

12. Sanders has consistently been against the policies that cause the disparities

Black voters are exactly like other voters in that most of them aren't political information junkies, so they don't know that. MSM coverage of Trump is 12 times that of Sanders.

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Response to eridani (Reply #12)

Tue Feb 23, 2016, 09:29 AM

18. Black voters have specific needs and issues. My policies "raise all boats" doesn't speak to them

 

they don't care about billionaires (and presumably 401Ks). Hillary is able to speak directly to issues that matter to them, not "global" issues. I'm a Bernie supporter. I could not understand why blacks would support a Clinton of all people. I did a lot of reading and noticed the polls are set in cement. This is what I've learned and the polls reflect it.

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Response to WhaTHellsgoingonhere (Reply #18)

Tue Feb 23, 2016, 09:40 AM

19. Yes--she speaks to them by calling black youth "superpredators"

Wondering why being 10 times more likely to be jailed for marijuana possession is not a specific enough issue.

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Response to eridani (Reply #19)

Tue Feb 23, 2016, 09:49 AM

23. Water under the bridge.

 

That's why I read a lot of articles. The Clinton policies ruined blacks economically and created a new industry based on incarcerating black men.

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:26 AM

16. . . . and since the average 401k has less than $15,000 . . . .

We've been played like suckers. The three pronged stool (Pension, 401k, SS) is on it's last broken leg.

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:40 AM

20. Because companies got rid of pensions.

401ks are a shit sandwich, full of fees that go to brokers.

They only benefit those that can afford to contribute. Many cannot.

It is all part of the race to the bottom for workers. Corporations screw everyone, all the time, whenever they can get away with it, with the complicity of both political parties. Black workers have it worse because they started from a worse position.

Fuck capitalism.

Also this is why the hatred for government employees is so effective. We still (on the state level, at least) have actual pensions. Not huge ones, as is erroneously reported in the media, but real ones. So, of course, the right wing needs to pit various workers against one another. Instead of mandating a return to a pension system for everyone, they are bent on tearing down the few good jobs left.

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Response to alarimer (Reply #20)

Tue Feb 23, 2016, 09:53 AM

24. I don't even get why were suckered into thinking this would work.

Unless you make a shit-ton of money, the math simply doesn't add up. We're never going to get the returns they promised us in the 1980s-1990s. We would have to work 45-50 years to even sniff mid-six figures, and you need far more than that for a financially stable retirement.

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:43 AM

21. gee, thank goodness the aa vote is going to someone who will really help them

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Response to eridani (Original post)

Tue Feb 23, 2016, 09:48 AM

22. Not this one

 

Lol

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Response to eridani (Original post)

Tue Feb 23, 2016, 11:24 AM

26. There's a lot going on here, with various drivers

Black workers have overall lower rates of pay than whites, making it harder to save if that pay is on the cusp of livability to begin with (which is not as universal as claimed on DU, but not rare sadly).

However contrary to implications above, 401k access is very widespread, among workers at all levels. To be sure truly small few-person companies don't have one very often, but low pay/skill jobs are no bar. McDonalds for example has a very good 401k benefit, open to all. Overall 80% of FT US workers could have access to retirement savings via employers But far fewer take advantage. Is there a racial difference here? There was a few years ago in 2007, even equalized for income and education. Not sure of changes, but likely still sn issue.

The survey found that the average savings for blacks Americans earning $50,000 or more a year is $48,000, compared with $100,000 for whites with the same incomes and educational backgrounds. And while 76 percent of whites invest in stocks or stock mutual funds, only 57 percent of black investors do.

So here we see, through either financial conservatism or other cultural differences, a significant black/white shift even among the middle class. The same study goes on to show that whites choose a greater number and diversity in funds in which to invest, spreading risk and maximizing gain. Why the difference? Tempting to blame education funding, but tony white schools ignore finacial literacy too usually. Generational examples? 401ks may be a bit new for that to be a big deal specifically, although more inferential examples are plausible. Culktural norms and priorities? Possible, but notoriously hard to quantify.

The lower than optimal use of 401ks is a crying shame with many causes too. Yes some people are on the bleeding edge and cannot spare a pretax dime, but bars and restaurants are full in areas the 1% don't even know exist, cell phones costing as much as I, decidedly upper-middle as I am, put into my 401k every month sell by the millions with new ones every year, and name brand clothing is the norm on streets at any income level. There is some responsibility here, among people of all ethnicities. The difference between buying Nike trainers and generics, or an iPhone 6+ compared to a Huawei ripoff, or a couple fewer beers or shots every trip to the bar, invested pretax with an employer match, using the most basic and broad of very low index funds requiring zero personal finacial acumen, and then left alone (here another of the legendary DU double standards comes in. People who advise investing are routinewy scolded that the average working man is not a financial genius, but then the same scolders proudly assert the sense of trying to be a financial genius and cash out as markets fluctuate. Just leave the fucking money in an index fund and no "bankster" will steal it in down markets!) would build up over a working life to a level far exceeding the current average.

The badmouthing of investing in this and other social media is a great injury to the people who need investments most. From inane prattle about the "rigged casino", which has generated consistent compound growth over any appreciable period for well over a century for investors of all income levels, to lurid claims of funds "stolen" when idiots panic and sell in down markets, to fanciful nonsense about fees taking all the gains, scare those with limited financial acumen from taking free money from their employers and leveraging the advantages of tax deferral.

Again I will post the guaranteed ways to benefit from 401ks and the like. There are 3 rules that a 6th grader could easily follow.

1. Pay in as much as you can afford to, but at least as much as your employer will offer a match for. Not doing the latter is like turning down a freely offered typically 3-6% pay increase.

2. Invest in broad index funds. Your selections will list names and descriptions and performance history. Unless you have a decent grasp of the markets don't try to outguess the overall. Look for things like Russell 2000 index or SP500 index. Put most of your money in them, then spread around the rest. As you get older, move more into bond funds.

3. Leave the fucking thing alone, except for moving slowly more and more into bonds. Never sell or cash out preretirement unless homelessness or starvation or death are the alternatives. Really important here. I would live in my car on Taco Bell before I'd sell my retirement funds. The people who lose are those who sell or stop contributing when the market is down. If you can afford it that's the time to INcrease your contributions, buying more shares with the same $$. If you can't then so be it but never ever ever sell 401ks etc in crashes. If you happened to hit retirement in, say, 2008, then sell as slowly and as little as you can, starting with the bond funds.


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Response to whatthehey (Reply #26)

Tue Feb 23, 2016, 11:29 AM

28. I can tell

 

We will not be friends, no matter how long we try ...

So, let's just cut bait right now ...

You continue to blame workers, and I'll vote for Bernie ...

Goodbye

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Response to Trajan (Reply #28)

Tue Feb 23, 2016, 11:34 AM

30. Whatevs. Tata.

If people choose not to take free money, blaming people encouraging them to do so and telling them how won't really help the workers now will it?

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Response to whatthehey (Reply #26)

Tue Feb 23, 2016, 12:00 PM

34. Where I used to work the match was up to 6% paid every payday. Nice because it compounded

When I retired, the match was 1.5% on all above $250 per payday, but only paid if you were still employed with the company next April 15th. On the April 15th of the following year they deposited the previous years match. If you were fired or laid off you did not get anything. Naturally you did not see any growth of the matching because the company kept the money in a bond in their name.

Fun and games.

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Response to whatthehey (Reply #26)

Tue Feb 23, 2016, 03:14 PM

35. This is solid advice!

I'm a state worker with a pension plan & I also jumped on the voluntary deferred compensation plan that the state offers at 25% my gross pay. I did great during the Clinton years, I took big hits during the W shit years, but still kept aggressively investing because of "dollar cost averaging" - buy less when high & more when low.

I cut back to 8% during Obama's triumphant glorious reign & now my plan has never been higher or more bloated. Truly it is the best & easiest way to invest in one's future retirement. With both a pension & a deferred compensation plan, my social security will hopefully be pure FU money.

I just laugh & I don't respond to the "scolders" with their bleating cries of "rigged wall street casino". I've been through the good/bad times of the market & my great faith in the market gods have blessed me accordingly.

Now I just coast till retirement in 4 years with yet another Clinton leading us to wealth & even better prosperity.

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Response to GOLGO 13 (Reply #35)

Thu Feb 25, 2016, 05:39 AM

42. People in jobs without such plans can just go fuck themselves, presumably n/t

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Response to eridani (Reply #42)

Thu Feb 25, 2016, 06:38 AM

56. Well, no, there are plenty of individual retirement account services

I won't shill any, but as a freelancer and contractor I've had to mostly rely on those. Yeah, you don't get a match, which sucks (but I did get a match when I was delivering pizzas for Dominos; fifteen years later that money is about 8 times what I put in). And, yeah, when I was collecting bottles on the curbs of Brookline to go recycle them so I could eat something that day, it was incredibly tempting to take the tax hit and cash that out, but I'm really glad I could avoid that.

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Response to Recursion (Reply #56)

Thu Feb 25, 2016, 06:40 AM

58. Which is ever so helpful to people who don't have anything left over after expenses

Not.

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Response to eridani (Reply #58)

Thu Feb 25, 2016, 06:47 AM

61. Whatever

You're painting a world that doesn't exist. When you're poor you have to prioritize; there's no such thing as "left over" money, just "left over" expenses. That's exactly why saving is so important when you are poor. When you're middle class you can set a budget and actually meet your expenditures, and set aside $X above them. When you're poor, expenses might as well be infinite. So, again, priorities.

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Response to eridani (Reply #42)

Mon Feb 29, 2016, 11:35 AM

77. In my last quarter from Oct- end of Dec 2015

I made slightly over 20k including my miniscule 8% contributions. I'm not even remotely talented to do that on my own. But I just went about my life & let the investment company do the work for me.

Glory to Obama & the market gods!.

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Response to whatthehey (Reply #26)

Thu Feb 25, 2016, 05:38 AM

41. What about the people who can't afford to pay anything in? n/t

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Response to eridani (Reply #41)

Thu Feb 25, 2016, 06:34 AM

53. It's a pretty miniscule population that literally can't afford to put *anything* in

But, yeah, that's why Social Security is there as a backstop.

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Response to Recursion (Reply #53)

Thu Feb 25, 2016, 06:39 AM

57. No, it's the majority of the population

http://www.cnbc.com/2015/04/22/nearly-a-third-of-savers-have-less-than-1000-for-retirement.html

28% have less than $1000 saved, and 57% have less than $25,000 saved.

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Response to eridani (Reply #57)

Thu Feb 25, 2016, 06:42 AM

59. And nearly all of them could have afforded to save more

Putting some of your money away every pay period really sucks, but it's a vanishingly small number of people who literally couldn't afford to do it.

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Response to Recursion (Reply #53)

Thu Feb 25, 2016, 10:39 AM

76. Many of us who are unemployed now because of "guest worker" contractization of our work force

 

... with H-1B programs, etc. have our savings wiped out now, and are having to dip in to early distributions of retirement programs such as H-1B and 401ks. And in addition to paying tax now on that money you're withdrawing, most are now subject to 10% penalty on early withdrawals from their plans if they aren't over 60 yet.

There are loopholes to avoid these extra penalties, but most don't know about them and it is too late until it hits them in the face. And with contract jobs now being the norm, it is hard to get a 401k plan to roll over your balance in to any more so that you can do an early withdrawal from a plan administered by an employer you worked at where you turned 55 at. If you were laid off before that time, even if you are over 55 now, you don't get that benefit any more, and it often times is hard to get that newer 401k plan in a lot of contract jobs you MIGHT find to give you that freedom.

IRAs have similar problems, and you should be prepared to make sure that you are unemployed for at least 12 CONSECUTIVE weeks and then be able to write off your health insurance payment expenses (COBRA, etc.) against that 10% penalty.

White folk might have started with more 401k plans, but that is decreasing a lot as many of them are forced to cash these plans out now in this economy, and lose a lot more than if they'd never even had that 401k to begin with, if they'd just been taxed once on income earlier and not taxed on the income tax as well as the 10% penalty now.,

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Response to eridani (Original post)

Tue Feb 23, 2016, 11:26 AM

27. Well then……… Color me black

because I don't fit in with this group of whitewashed BS!!!


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Response to MagickMuffin (Reply #27)

Tue Feb 23, 2016, 11:31 AM

29. What group of white washed BS ?

 

Not sure I understand the drift of your comment ...

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Response to Trajan (Reply #29)

Tue Feb 23, 2016, 11:36 AM

31. It was my attempt at a joke since I don't have a 401K

Never had the opportunity to have one available. And it appears there are a lot of white people are in the boat as me.

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Response to eridani (Original post)

Thu Feb 25, 2016, 05:42 AM

43. 90% of the value of the stock market is held by the top 10%


http://www.nationofchange.org/economic-storm-clouds-ahead-1370096982

What about the stock market? It’s time we stopped assuming that a rising stock market leads to widespread prosperity. Over 90 percent of the value of the stock market — including 401(k)s and IRAs — is held by the wealthiest 10 percent of the population.

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Response to eridani (Reply #43)

Thu Feb 25, 2016, 06:36 AM

55. Who cares?

You've said that over and over in this thread without any indication of why that's a problem here. The very rich own most of everything; it's kind of the point of being rich. How does that change how workers need to save for retirement?

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Response to Recursion (Reply #55)

Thu Feb 25, 2016, 06:56 AM

62. Bring back defined benefits pensions

Which of course doesn't let you off the hook for saving.

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Response to eridani (Reply #62)

Thu Feb 25, 2016, 06:58 AM

63. God no. They're a horrible idea. Look at how badly they screwed workers over.

Can you even count the number of times a company has defaulted on its pension obligations, punted to PBGC, and PBGC has had to reduce benefits?

Count me out. It's as bad an idea as putting your money in your employer's stock; actually a little worse because your company can't deliberately tank its stock like it can its pensions.

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Response to Recursion (Reply #63)

Thu Feb 25, 2016, 07:02 AM

64. My defined benefits pension has saved my ass in retirement

It made the difference between modest comfort and poverty.

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Response to eridani (Reply #64)

Thu Feb 25, 2016, 07:05 AM

65. Hey, if you trust a corporation with your retirement, go for it

Like I said, count me out, though.

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Response to Recursion (Reply #65)

Thu Feb 25, 2016, 07:16 AM

66. Investing in the stock market also involves trusting in corporaqtions n/t

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Response to eridani (Reply #66)

Thu Feb 25, 2016, 07:17 AM

67. It involves trusting an entire set of markets, yes

But then again so does, for example, hoping to eat tomorrow.

Diversity is a very very good thing, and defined benefit plans are the opposite of that.

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Response to Recursion (Reply #67)

Thu Feb 25, 2016, 07:22 AM

68. Which can go down the tubes as in 2007

I'm too old to wait for the inevitable recovery

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Response to eridani (Reply #68)

Thu Feb 25, 2016, 07:23 AM

69. Which is why you slowly move out of equities starting in your 40s

If you're near retirement you won't (or at least shouldn't) have much exposure to stocks; if you just click the default plans in most brokerage accounts they'll do it for you.

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Response to eridani (Original post)

Thu Feb 25, 2016, 09:26 AM

71. Apples and Oranges

Comparing Participation Rates in 83 to current total assets doesn't add up well. The value of defined benefit plans is not equivalent across all workers.

IIRC White workers of equivalent income levels have significantly more accumulated wealth than African Americans. Something researches have speculated on reasons why. )(Poorer relatives) But I don't recall a specific report detailing the contributing reasons. Add to that the overall disparity in average income between AA and White, it is hardly surprising that an individually contributed retirement account would reflect this as well. You could force people to make defined contributions. But that is really an assumption on our part that the choices AA's make in spending their money on other people/things is less valuable than investing in their retirement.

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