General Discussion

FreeJoe

(1,039 posts)

82. I somewhat agree

Reply to IphengeniaBlumgarten (Reply #73)

Thu Dec 25, 2014, 10:01 PM

Dec 2014

The move from defined benefit pensions to 401Ks had some advantages, but it had major disadvantages as well. On the positive side, it made retirement financing more transparent and portable. On the negative side, it ruined retirement for people that didn't have the discipline to save or the knowledge of how to appropriately save. It also shifted risk from the employer to the employee.

Things might be better with some retirement savings reforms, including:
1) Better regulation of 401Ks with limits to fees charged and the requirement that index funds be offered.
2) Do something to make some form of retirement savings mandatory.
3) Work with the market to create standards for annuities to help people spread longevity risk when they retire. Without some form of annuity, you need to have enough saved to draw it down very slowly in case you live to 100+, which is rare. The problem with annuities today is that most are deliberately confusing and awful for customers.

I'm fortunate to work for a company that offers both a 401K and a pension. I've been there for about 10 years and have another 5.5 to go before I am retirement eligible. At this point, I have twice as much money in my 401K than the lump sum value of my pension and some of the 401K money is in a Roth 401K. For me, the 401K has worked better than a pension would have. I'm glad to have both, though, because it gives me a little more diversity in my portfolio.

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401(k)s are a sham: Duped by a DIY retirement dream, elderly face staggeringly low living standards [View all] NewDeal_Dem Dec 2014 OP

du rec. xchrom Dec 2014 #1

great Frontline if you missed it....shows what a scam they are antigop Dec 2014 #2

SO glad I mistrusted this from the start! silverweb Dec 2014 #3

+1 CountAllVotes Dec 2014 #6

If he lost 2/3, he put his money in some very high risk investments HERVEPA Dec 2014 #11

Maybe I have it backwards. silverweb Dec 2014 #12

I lost close to 50% joeglow3 Dec 2014 #18

A lot depends on your not having to take the money at a bad time. merrily Dec 2014 #128

This should only apply in catastrophic circumstances joeglow3 Dec 2014 #148

Do you know when you're going to get laid off? dickthegrouch Dec 2014 #151

I would consider that catastrophic. joeglow3 Dec 2014 #155

And I would share that advice like a disease joeglow3 Dec 2014 #156

As people near retirement or enter it, they are likelier and likelier to suffer catastropic merrily Dec 2014 #175

me too mahina Dec 2014 #165

The 401k plan almost definitely igave him choices of where to invest. If he lost 2/3 HERVEPA Dec 2014 #19

do you know that half the population is below average intelligence? jberryhill Dec 2014 #122

this. PowerToThePeople Dec 2014 #145

He should nt have had to 'withdraw' pangaia Dec 2014 #37

A lot of companies only offered their stock in the 401k. I think Enron was like that. LiberalArkie Dec 2014 #61

Enron highly encouraged employees to purchase company stock tammywammy Dec 2014 #65

Enron Employees Were Lied To StevePaulson Dec 2014 #97

I don't disagree that Enron lied. tammywammy Dec 2014 #102

Yep, the game is rigged and "full disclosure" is not always what it's cracked up to be. merrily Dec 2014 #130

The Labor Dept guidelines say there should be at least three options FBaggins Dec 2014 #68

Yeah, but I'm betting even with a 1/3 loss, he was still up over Adrahil Dec 2014 #72

At interest rates for the last 6 years, putting $ in the bank is about like putting $ in a mattress. merrily Dec 2014 #131

Imagine what they would do to Bush's "individual accounts social security". Enthusiast Dec 2014 #160

That's why I keep my 401K customerserviceguy Dec 2014 #17

You don't need an investment advisor. HERVEPA Dec 2014 #21

I am over fifty customerserviceguy Dec 2014 #24

Fear of a stock market collapse, and worse, pangaia Dec 2014 #38

If the 401K provider customerserviceguy Dec 2014 #42

Cna you invest in ANY Vanguard Fund? pangaia Dec 2014 #43

Unfortunately customerserviceguy Dec 2014 #45

Money market funds are NOT risk-free antigop Dec 2014 #30

If they had customerserviceguy Dec 2014 #41

NOTHING is risk-free, really. Adrahil Dec 2014 #74

Just look at the historical performance. Adrahil Dec 2014 #71

You forgot the sarcasm thingie. Enthusiast Dec 2014 #159

SO, what are you doing for retirement? Adrahil Dec 2014 #69

I never bought into it. cwydro Dec 2014 #83

What are you doing instead for retirement? Matariki Dec 2014 #103

He sold the rest? Why? He would be ahead today yeoman6987 Dec 2014 #135

here is a link....I don't think the ruling applies to trustee-to-trustee transfers antigop Dec 2014 #4

Yes, you can make as many trustee to trustee transfers in a year as you want progree Dec 2014 #23

The same n/t A HERETIC I AM Dec 2014 #96

What's the same? The trustee to trustee transfer is verydifferent from the rollover where you take progree Dec 2014 #106

I was answering the question in your last sentence. A HERETIC I AM Dec 2014 #108

Gotcha. OK. I thought so but wasn't totally sure. Thanks. n/t. progree Dec 2014 #111

They was no such animal as a 401K when I was working CountAllVotes Dec 2014 #5

Just wait until the Republicans whom the non-voters ushered in . . . Triana Dec 2014 #7

IRA's and 401's are big time crap shoot for many. Wellstone ruled Dec 2014 #8

While I do not doubt for one second you are sincere in your convictions..... A HERETIC I AM Dec 2014 #15

Thanks, that's what I was thinking customerserviceguy Dec 2014 #20

Yes, you own the 401k tammywammy Dec 2014 #25

I'm pretty sure customerserviceguy Dec 2014 #29

Assuming they deposited your funds appropriately... FormerOstrich Dec 2014 #63

Good point customerserviceguy Dec 2014 #173

Pensions Aren't That Fluid Either ProfessorGAC Dec 2014 #134

k & r. Thanks for posting. nm rhett o rick Dec 2014 #9

I am retiring next year due to my money in IRA's and 401k (amd 403b) HERVEPA Dec 2014 #10

As well as maintaining a low cost lifestyle. flygal Dec 2014 #28

Exactly. HERVEPA Dec 2014 #104

Any sort of retirement plan is only good if you put money into it bhikkhu Dec 2014 #13

Too many people do not understand basic principles of investing, nor do they understand the still_one Dec 2014 #16

You make it sound so easy. Curmudgeoness Dec 2014 #31

the new plans are better deals for the company and for Wall Street. nt antigop Dec 2014 #36

Where exactly do you think the money in a defined benefit plan is held? A HERETIC I AM Dec 2014 #44

But there is a difference. Curmudgeoness Dec 2014 #91

Just not true. Buy an index Fund and you'll likely do as well as anyone HERVEPA Dec 2014 #124

Better, actually. dawg Dec 2014 #136

Exactly! HERVEPA Dec 2014 #137

Unless you end up retiring at the wrong time. Curmudgeoness Dec 2014 #167

You are right about defined benefit pension plans bhikkhu Dec 2014 #47

Defined benefit pension plans customerserviceguy Dec 2014 #52

What came first, the chicken or the egg? Curmudgeoness Dec 2014 #93

Good point customerserviceguy Dec 2014 #172

Tell me about it. Curmudgeoness Dec 2014 #174

Educate yourself. There's not much yu need to do. HERVEPA Dec 2014 #123

" It would still be worthwhile if the fees are under 5%, ..." pangaia Dec 2014 #40

My employer match is 38% or so bhikkhu Dec 2014 #48

Caution FreeJoe Dec 2014 #50

The points you state here are exactly why 401ks should never have Nay Dec 2014 #60

+100 NewDeal_Dem Dec 2014 #86

Well said! GOLGO 13 Dec 2014 #129

First you start with 401Ks, then you take about IRA rollovers. The only way you can make a rollover still_one Dec 2014 #14

Don't bother with facts. Indydem Dec 2014 #26

Top 5% owns about 2/3 of stock. Maybe owning that much gives some a better cushion NewDeal_Dem Dec 2014 #34

Here is a breakdown according to Pew still_one Dec 2014 #180

I said the top 5% owns 2/3 of all stock. The information from Pew is saying something different. NewDeal_Dem Dec 2014 #183

I didn't not contradict you or say you were wrong. All I was pointing out is that about 60% of still_one Dec 2014 #184

really...? NewDeal_Dem Dec 2014 #185

Thanks still_one Dec 2014 #62

401K is the article, IRAs is my personal question. I don't have a 401K, thus I have no NewDeal_Dem Dec 2014 #33

Your confusion may be a perfectly understandable misunderstanding re: "rollover" FBaggins Dec 2014 #66

"You're thinking of a CD that "rolls over" into a new CD of the same maturity at the end of the term NewDeal_Dem Dec 2014 #87

Sorry... it doesn't matter what you call them FBaggins Dec 2014 #89

Yes; I know I'm losing money to inflation but I don't know what else to put it in that's NewDeal_Dem Dec 2014 #119

food for thought, you may want to investigate I-Bonds. Now may not be the best time, and still_one Dec 2014 #181

Your complaint is legitimate, but you are being punished for one couple gaming it, and the IRS ruled still_one Dec 2014 #70

I don't want to take any money out. I just want to roll over my IRAs. NewDeal_Dem Dec 2014 #84

And I gave you the reason why the IRS didn't allow it, because of that case were they gamed it. I still_one Dec 2014 #101

Trustee to trustee rollovers aren't limited. tammywammy Dec 2014 #113

If I had the money for a 'financial advisor,' i wouldn't be here. NewDeal_Dem Dec 2014 #116

Talk to whomever is doing your IRAs tammywammy Dec 2014 #117

thanks for the clarification. my credit union. NewDeal_Dem Dec 2014 #118

Good point still_one Dec 2014 #162

You are using confusing or inaccurate terminology. A HERETIC I AM Dec 2014 #114

Close but not exactly lumberjack_jeff Dec 2014 #157

You are correct. Whichever is longer. Unfortunately a lot of folks still_one Dec 2014 #161

I'm doing it for strategic reasons. lumberjack_jeff Dec 2014 #166

Everyone's situation is unique. However, heredity does play into still_one Dec 2014 #169

You have 60 days if you take the money out of the employers 401k to put it into an IRA HERVEPA Dec 2014 #179

UNREC brooklynite Dec 2014 #22

The key word here is "able" eridani Dec 2014 #32

Sure could... what's your alternative? Adrahil Dec 2014 #75

A Scandinavian safety net n/t eridani Dec 2014 #120

+1 merrily Dec 2014 #176

That isn't the point. The point you are making is people cannot afford to save for retirement still_one Dec 2014 #78

The government has been deeply involved already -- in destroying traditional pensions, NewDeal_Dem Dec 2014 #88

even before iras and 401ks there were a hell of a lot of people who did not have still_one Dec 2014 #99

According to this: NewDeal_Dem Dec 2014 #121

That report has a lot of information to digest, and will take me some time to go through. still_one Dec 2014 #139

Median HOUSEHOLD income is ~$52K. NewDeal_Dem Dec 2014 #85

52k is without context. How many people per household, geographical area, and age group. a single still_one Dec 2014 #100

Real wages have been about stagnant for 50 years. That is far from so re: the real income of the 1%. merrily Dec 2014 #133

+1 merrily Dec 2014 #177

My employer matches my contributions madville Dec 2014 #27

you understand that half the population has no pension, no stocks, no 401k, right? NewDeal_Dem Dec 2014 #46

I was in that exact scenario years ago madville Dec 2014 #55

and you understand that median HOUSEHOLD income is about 51K, right? NewDeal_Dem Dec 2014 #58

Out of every dollar of profit made in the USA, 49 cents now goes to the Bankers & Big Money people truedelphi Dec 2014 #35

PLUS ONE, a whole bunch! Enthusiast Dec 2014 #163

I was ripped off twice early on and I asked for a 401K, I was their pension specialist. hollysmom Dec 2014 #39

pensions are what should be provided at every job Ramses Dec 2014 #49

So companies should promise benefits to their own employees, and the taxpayers hughee99 Dec 2014 #152

Oh My...... Ernesto Dec 2014 #51

Record 401k gains to match the stock market? 4_TN_TITANS Dec 2014 #53

yes Skittles Dec 2014 #59

Nope. My funds have out-performed the market a tad. Adrahil Dec 2014 #76

Are you invested excluseively in large-cap stocks? FBaggins Dec 2014 #79

Collect fees, add ballast, absorb losses. moondust Dec 2014 #54

My 401k and IRA have done me pretty good. But one big line of doc03 Dec 2014 #56

And dat's why I like my Roth Fla_Democrat Dec 2014 #57

The Great 401(k) Hoax antigop Dec 2014 #64

Spot on. Octafish Dec 2014 #67

yes, spot on...the Wall St. apologists on this thread really have no shame. nt antigop Dec 2014 #81

The real culprit IphengeniaBlumgarten Dec 2014 #73

Well said! Adrahil Dec 2014 #77

I somewhat agree FreeJoe Dec 2014 #82

401ks ONLY help keeping the wall street casino alive AFTER the baby boomers leave. pansypoo53219 Dec 2014 #80

Wow. Brigid Dec 2014 #90

Enjoy Your Dog Food America Dirty Socialist Dec 2014 #92

the responses on retirement threads here on DU depress me. I think I'm going to add liberal_at_heart Dec 2014 #94

Elizabeth Warren: "The system is rigged." antigop Dec 2014 #95

Does Elizabeth Warren recommend we don't invest? Put it under a mattress? Or stick to CD's? progree Dec 2014 #109

Declining living standards are at the heart of most of our issues. dawg Dec 2014 #141

+100 NewDeal_Dem Dec 2014 #182

I have a 401K, a Roth IRA, own a bond and stock index funds, have savings, and physical precious Yavin4 Dec 2014 #98

And then there are pensions, which apparently can be crushed in one fell swoop... Matariki Dec 2014 #105

Where I worked often most of the funds were sh** funds. The CEOs seemed to have a cozy relationship RKP5637 Dec 2014 #107

Oh, crap. blackspade Dec 2014 #110

If you have access to a 401k and an employee match you should absolutely take advantage of the match Godhumor Dec 2014 #112

It is not essentially free funds. Stop working and see if you still have a job and the "free funds". Skeeter Barnes Dec 2014 #143

The question I haven't seen is what is the better alternative? Renew Deal Dec 2014 #115

The better alternative is to pay a lifelong livable wage Orrex Dec 2014 #125

I meant something else Renew Deal Dec 2014 #126

With respect, I think that you've been steered into asking the wrong question Orrex Dec 2014 #132

This is one of the many reasons I figure to work until I can't Arcadiasix Dec 2014 #127

Investing is not gambling, and Wall Street is not a casino. dawg Dec 2014 #138

A 401k was never designed to be all of your retirement. They were created to supplement pensions. Skeeter Barnes Dec 2014 #140

The greatest imperative related to this issue is the need to protect Social Security benefits ... dawg Dec 2014 #142

Choose Vanguard yellowwoodII Dec 2014 #144

Since most corporation have done away with pensions, we don't have any choice B Calm Dec 2014 #146

I intend to work until they nail the lid shut, but... meaculpa2011 Dec 2014 #147

And Hillary's pal Pete Peterson wants the rest of retirees' money too. DirkGently Dec 2014 #149

Precisely. Enthusiast Dec 2014 #164

I never bought into the scam magical thyme Dec 2014 #150

Not a scam... brooklynite Dec 2014 #158

Who ever thought that 401k was the only thing you needed? dilby Dec 2014 #153

In decent shape here, entirely because of 401k lumberjack_jeff Dec 2014 #154

When I first got a 401k I went to the most financially savvy person I knew Sen. Walter Sobchak Dec 2014 #168

Whenever got into a new 401K I would take the different investment options to my financial adviser B Calm Dec 2014 #170

Kick Liberal_in_LA Dec 2014 #171

Only means when your employer goes belly up, you might still have something One_Life_To_Give Dec 2014 #178