How much should I need or want for retirement in 30 years?

[Drake3287]

It isn't just new employees. I know plenty of people who have seen their "guaranteed" retirement benefits trimmed back even after retirement. Companies have simply spent decades making promises that they just can't afford to keep, especially in regards to health insurance. Costs have skyrocketed at a rate far beyond what anyone predicted years ago when those guarantees were made.

I was referring to my situation and the plan I belong to. You right though, anything could happen to anyone. For me, I think I'll dodge a bullet but younger employees might not be so lucky years down the road.

[snafu]

Kudos to you for thinking about retirement savings at age 28. It's brilliant to set up an automatic system so that you are contributing about 15% of your Gross Income to retirement in a low cost, well run program. Let us know the details of the defined plan and we'll happily make suggestions for products that you select that mesh well.

A lot of defined pension plans are underfunded because they use very conservative in investment products. Low risk resulted in far too low income/profit when interest rates tumbled. Added to that is the far higher life expectancy provided by the medical industry. In 1935 when Pres. Roosevelt signed Social Security into law, benefits commenced at age 65 but life expectancy was only 61 years.

[hehateme000]

Damn, that's crazy that the pension isn't as guaranteed as I thought. I am learning more and more that you can't assume anything when it comes to retirement.

I can't start my 401a with the company until 5 more years. In 2.5 years I will be making an involuntary contribution of $1.00/hour. Once I reach 5 years I can change that to anywhere between $1 and $14 an hour. At that point, if I choose to invest $14/hour then that will be about 23k a year. I will be 33 once I can do that.

I guess the best thing to do is open an IRA.

[~bs]

Damn, that's crazy that the pension isn't as guaranteed as I thought. I am learning more and more that you can't assume anything when it comes to retirement.

I can't start my 401a with the company until 5 more years. In 2.5 years I will be making an involuntary contribution of $1.00/hour. Once I reach 5 years I can change that to anywhere between $1 and $14 an hour. At that point, if I choose to invest $14/hour then that will be about 23k a year. I will be 33 once I can do that.

I guess the best thing to do is open an IRA.

I'm glad this is something you're taking a look into and making decisions on while you're still young.

If you can't do 401 contributions right now, you might look at doing an IRA, as you mentioned.

And FWIW, I also have a pension, looking at 60-65% of high salary, and saving as if the pension didn't exist. The extra savings allows you a lot more options when it comes closer to when you retire. You can reevaluate how your pension and how social security is looking at that time and perhaps decide you can simply retire early or afford to spend a lot more in retirement than you would have thought.

[greenskeeper]

Many pensions are simply underfunded. The people in charge are not setting aside sufficient funds to meet the future obligations they are promising their workers. In some cases it is rather fraudulent. In others, it's probably just poor planning and management. And yes, investment returns matter. So does life expectancy. If a lot of people live longer than the actuaries predicted, that puts a huge strain on the system.

The #1 problem with all pension setups are far more retirees to support than actual workers to pay into the system, mainly due to people living longer.

30 years ago it might have been 50 to 1

now it's 10 to 1

the math just doesn't work anymore

A perfect example would be SS, a very limited number of people were ever expected to collect because the life expectancy was right around when the benefit kicked in. Now people are collecting for 30+ years.

[~bs]

^

A big part of the problem with social security is that there are tons of people collecting that have never paid into it. It's basically treated like a welfare program for people that cant work or are retired, or for families or spouses of disabled people. When the program was getting off the ground, there was a lot of people that didn't even contribute into it, but when they hit retirement age, they're collecting for the rest of their life. Then you have things like "survivor benefits", children of survivors, young widow/ers. Almost 1/3 of the people collecting social security isn't even 65 years old.

Who Gets Social Security?
About 59 million people collect Social Security benefits each month, and they account for about one in six people in the United States. In about one family in four, someone is receiving Social Security benefits.

The number of Americans ages 65 and older - 46 million

[Drake3287]

Damn, that's crazy that the pension isn't as guaranteed as I thought. I am learning more and more that you can't assume anything when it comes to retirement.

Don't overly worry about it not being guaranteed. Nothing is guaranteed like an FDCI savings might be and not every pension files for bankruptcy either. Like has already been said, have a 401k, Roth, etc. as a small backup as part of your total retirement picture.