Originally posted by dh1989
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Pension vs 401k
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Originally posted by Scanner View PostIn today's day and age, with so many pensions failing (although I suppose they are insured by a gov't entity), I think I'd rather have the 401(k). With pensions, the co. or gov't can decide to renigg(sp?) on their deal later.
My wife actually has both, which is rare for a company.
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401ks are not better. Pensions are better. This is why employers hate pensions. Because it costs them money. They don't care about you. That's exactly why they switched to the 401k. You have to care about you because no one else will.
401k were never meant to be a retirement plan at all. See below:
"401k accounts were only meant to be supplemental accounts to supplement Social Security and defined benefit pension plans, which by 1985, 90% of employers were using as compared to 10% today.
But employers found these 401k accounts to be much cheaper than having to fund and payout pension plans so they started to scrap them in masse. The mutual fund industry had no complaints as this led the nation’s workforce directly into their products! They jumped on the bandwagon by advertising their products as retirement vehicles, when in truth, they are not. But the 401k going mainstream was such a boon to the mutual fund industry that they don’t want to see any changes to their profit margins, which are extraordinary. This is why their lobbyists fight any attempt at true transparency." -empowernetwork.com/netscript/401k-retirement-a-pipe-dream-for-millions/
Remember the words of Mayer Amchel Rothschild:
”The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages…will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their best interests” (Rothschild Brothers of London).
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Originally posted by Gina23 View PostI also have both. What has been said is true... I have no control over the pension amounts that I put in, but plenty of control over the 401K. I'm not sure how I feel about the pension and the fact that they can just "disappear into thin air" but I would be stupid not to take this deal.
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Originally posted by Manthony View Postyou don't have much control at all over a 401k itself, which can also disappear into thin air.
A pension, however, is a promise to pay money at a future date. That promise can be modified or retracted entirely. That can't happen with a 401k.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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Originally posted by Manthony View PostYou only have control over how much you put in the 401k up to IRS imposed limits. But outside of that, you don't have much control at all over a 401k itself, which can also disappear into thin air. The only "deal" you get with a 401k is a company match, if you have one, and, oh yes, its tax-preferred status. The financial industry needed some kind of incentive to get the masses to switch. That would be it.
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Originally posted by RDC_MKTG View PostThere are a lot of knowledgeable folks posting great comments in this post. I'm wondering how many of you are aware of a little thing called a private pension. Has the ability to grow tax deferred, provides tax free access, guarantees against losing your principle, growth tied to multiple indexes AND self completes should something happen to you. Now that's what I call a savings plan!
Isn't a "private pension" the latest term for an annuity?
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Originally posted by Petunia 100 View PostSure sounds like an equity indexed annuity to me. Pass.
My spouse and I both have pensions along with an employer sponsered 401K program with a modest company match. I feel very fortunate to be a part of both programs since I could easily have neither.
I look at my retirement like a diversified portfolio. I will likely retire with 45% of my income coming from my pension, 35% from 401K, 20% Social Security, and 50% from Roth IRA money totaling 150% of my preretirement income. Any of them could "disappear" and I would be fine (since I live on 50%-55% of my income now), but if they are all still around I will have extra $ to give, save, or spend as we see fit.
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Originally posted by Manthony View Post401ks are not better. Pensions are better. This is why employers hate pensions. Because it costs them money. They don't care about you. That's exactly why they switched to the 401k. You have to care about you because no one else will.
I would have hated to lose that money just because they only had a pension (or lose any match because they used any matching monies to fully fund the pension). Thankfully my current job has a pension (and I am already vested) and a 457 plan, so I will have the best of both worlds.
Lastly, I do agree, with the new system, you need to worry about yourself as your employer will (or can) only do so much. But that's just personal responsibility, and I take it seriously, even if most people don't.Don't torture yourself, thats what I'm here for.
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Originally posted by bennyhoff View PostI've never understood the hatred of 401k's. Yes, if you stay in the same job for > 10 years, a pension is probably a much better choice. But if you switch jobs often enough, the portable retirement plan is easily the better choice. Before starting my current job (2003) I had various plan amounts that totalled around $45,000, and while they are now rolled into my current 457 plan account, I would estimate they have added at least $60,000 to my current stash. I didn't stay in any jobs long enough to vest in a pension (usually you need 5 years).
I would have hated to lose that money just because they only had a pension (or lose any match because they used any matching monies to fully fund the pension). Thankfully my current job has a pension (and I am already vested) and a 457 plan, so I will have the best of both worlds.
Lastly, I do agree, with the new system, you need to worry about yourself as your employer will (or can) only do so much. But that's just personal responsibility, and I take it seriously, even if most people don't.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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Originally posted by disneysteve View PostOf course, you generally need to be vested to get the company match in a 401k also but at least you keep your contributions.Don't torture yourself, thats what I'm here for.
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