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wow, would have been nice to have bought that at the bottom. I don't have a 401k, but would it even be possible for someone to load up on an individual stock like ggp in a typical 401k? I thought they were limited in investment choices to reduce taking a big hit from a company going bankrupt.
I believe the original issue I was responding to was someone talking about how dangerous 401k's are because people "lost it all" at some point. there are no guarantees for any asset; but exaggerating the risk for any of them is either dishonest or ignorant. risks should be presented that are honest and realistic.
there are many problems with 401Ks, depending where you work. Too many companies still put your 401k $ into company stock...which is very bad. i'm not as down on 401Ks as the other poster, but there are some definite downsides.
you really have an issue with my preference here? I would imagine everyone should be on board with funding pension obligations in the present rather than leaving a shortfall to be made up later. I think that gives more security to both the company and the employee.
i'm with you, but it's not as simple as you make it sound. funding pension obligations is a calculation. and there have been "standards" to follow. in the 90s, companies lobbied to have those standards changed, because they were overfunded, and companies wanted a way to tap into that "cash" on their balance sheets. they raided them, often in the forms of executive compensation or by selling pieces of a company for cash, effectively "cashing out the pension" value, and then started complaining in the 2000s about underfunded pensions.
WSJ did an excellent report on this a while ago, and that journalist went on to write a book about it (it's called Retirement Heist and will anger most people, i think, no matter what you're political background is).
so, i guess you still have to define what "funding pension obligations in the present" means.
well, there are numerous investments that have lost everything. if you need me to find them for you, then you're fairly helpless. but 65% drop for one of the most trusted funds in the history of investing is fairly substantial.
this is a funny response. you failed to find any investments that lost everything and then you seem to project your failure onto me.
its funny how you label that fund "one of the most trusted funds in the history of investing." you and I both know you had never heard of it until it came up in a google search when you were desperately attempting (and failing) to find an investment that lost everything.
anyway, my issue was the exaggeration. I don't understand the need to exaggerate rather than just being honest about the real risks involved. of course there are risks in a 401k and there are risks in a defined benefit pension. but when we use exaggerations we aren't doing anyone favors, just preying on the emotions of the ignorant and scared. the real issue with a 401k isn't going to be the risk; its going to be the employer contribution. if they are saving money by not contributing much; then it isn't as generous of a pension. when it comes to private businesses; I don't really care which they do. its when its a public entity that is expecting the taxpayers to come through when they don't fund the pension that I have a problem.
Last edited by CaptainNJ; 11-18-2013 at 05:04 PM..
so, i guess you still have to define what "funding pension obligations in the present" means.
that's one thing that makes defined contribution simple. you just put in an amount and you don't have to worry about trying to fill future promises. that money is no longer the company's, its the employees and the employee gets to make decisions. otherwise, you need to deal with rules of what is appropriate funding and depending on actual returns, you can end up over or underfunded. im not going to come up with the rules; but im sure some decent standards could be made that are acceptable and also standards for dealing with over/under funded situations.
this is a funny response. you failed to find any investments that lost everything and then you seem to project your failure onto me.
its funny how you label that fund "one of the most trusted funds in the history of investing." you and I both know you had never heard of it until it came up in a google search when you were desperately attempting (and failing) to find an investment that lost everything.
anyway, my issue was the exaggeration. I don't understand the need to exaggerate rather than just being honest about the real risks involved. of course there are risks in a 401k and there are risks in a defined benefit pension. but when we use exaggerations we aren't doing anyone favors, just preying on the emotions of the ignorant and scared. the real issue with a 401k isn't going to be the risk; its going to be the employer contribution. if they are saving money by not contributing much; then it isn't as generous of a pension. when it comes to private businesses; I don't really care which they do. its when its a public entity that is expecting the taxpayers to come through when they don't fund the pension that I have a problem.
But ultimately, as with people making crappy wages, we ALL pay in the end. If people are not making enough to contribute much to their 401(k) they will strain social services. In the past the companies provided pensions and had experts - not Bill the janitor scratching his head over his 401(k) investment lineup - doing the investing for them. Yes it was paternalistic. But it also worked quite well for 50 - 60 years. I don't know many people in public or private sector complaining about having a decent pension. Corporate greed has made pensions mostly a relic of bygone days. Your granddad or dad may have had one but not you or I.
this is a funny response. you failed to find any investments that lost everything and then you seem to project your failure onto me.
its funny how you label that fund "one of the most trusted funds in the history of investing." you and I both know you had never heard of it until it came up in a google search when you were desperately attempting (and failing) to find an investment that lost everything.
anyway, my issue was the exaggeration. I don't understand the need to exaggerate rather than just being honest about the real risks involved. of course there are risks in a 401k and there are risks in a defined benefit pension. but when we use exaggerations we aren't doing anyone favors, just preying on the emotions of the ignorant and scared. the real issue with a 401k isn't going to be the risk; its going to be the employer contribution. if they are saving money by not contributing much; then it isn't as generous of a pension. when it comes to private businesses; I don't really care which they do. its when its a public entity that is expecting the taxpayers to come through when they don't fund the pension that I have a problem.
General Growth Properties is one. Ford lost almost everything. Citibank, Bank of America, GE all plummeted.
You've never heard of Bill Mason? His fund was widely touted, and very well known. He had the longest "winning streak" in mutual fund management history. So if you've never heard of it, fine. But i certainly heard of it and didn't have to google.
I understand your issue was the exaggeration, but it's still not a stretch to say that there are a lot of people who held investments that lost well beyond 60% of their savings. 70, 80% drops were not unlikely.
as for a public entity, the taxpayers have to come through at some point, so i guess you just don't like how in NJ, they kicked the can down the road, so they could say they "balanced the budget", and now a heavier burden will fall on the taxpayers in a shorter amount of time, if we honor the obligations.
But ultimately, as with people making crappy wages, we ALL pay in the end. If people are not making enough to contribute much to their 401(k) they will strain social services. In the past the companies provided pensions and had experts - not Bill the janitor scratching his head over his 401(k) investment lineup - doing the investing for them. Yes it was paternalistic. But it also worked quite well for 50 - 60 years. I don't know many people in public or private sector complaining about having a decent pension. Corporate greed has made pensions mostly a relic of bygone days. Your granddad or dad may have had one but not you or I.
so should we send all those women back into the kitchen and out of the workplace? people looooove the old days because when they remember them they remember very selectively.
pensions are just a matter of compensation. its the overall level of compensation that's an issue, not where it goes. if the employer contributes to a 401k then its no worse than an equal contribution to a defined benefit pension.
General Growth Properties is one. Ford lost almost everything. Citibank, Bank of America, GE all plummeted.
You've never heard of Bill Mason? His fund was widely touted, and very well known. He had the longest "winning streak" in mutual fund management history. So if you've never heard of it, fine. But i certainly heard of it and didn't have to google.
I understand your issue was the exaggeration, but it's still not a stretch to say that there are a lot of people who held investments that lost well beyond 60% of their savings. 70, 80% drops were not unlikely.
as for a public entity, the taxpayers have to come through at some point, so i guess you just don't like how in NJ, they kicked the can down the road, so they could say they "balanced the budget", and now a heavier burden will fall on the taxpayers in a shorter amount of time, if we honor the obligations.
ive never heard of him. i invest mostly in fidelity funds and that's what i know best. other than that, i know individual stocks and some big funds. im sure it must have been scary to see a 40% drop in 2008, but its not fair to only discuss 2008 in the discussion about a retirement accumulation that takes 30+ years. we all know the market has made up all its losses and then some. we also know that in 2009 (the very next year) a large % of the losses were made up.
yes, i am opposed to kicking the can down the road. either reduce the pension benefit or fund it.
ive never heard of him. i invest mostly in fidelity funds and that's what i know best. other than that, i know individual stocks and some big funds. im sure it must have been scary to see a 40% drop in 2008, but its not fair to only discuss 2008 in the discussion about a retirement accumulation that takes 30+ years. we all know the market has made up all its losses and then some. we also know that in 2009 (the very next year) a large % of the losses were made up.
yes, i am opposed to kicking the can down the road. either reduce the pension benefit or fund it.
you must have literally never read any sort of investment or personal finance magazine. in the 2000s, his name came up constantly. maybe i just read too much, i thought his name was pretty common knowledge. Legg Mason funds are(were) quite popular due to his streak.
the market may have made up all of it's losses, but few, if any, individuals have. i'm not sure what you're referring to in 2009. the DJIA? S&P? some other broad market measure? Or specific funds?
the point of discussing 2008 in the discussion about retirement is that anyone who was retiring between 2008-2013 was basically hammered. even target date funds, which were supposed to dial back risk substantially when nearing the target date, took a huge beating. Turns out, they were all far too exposed given the target dates.
I increased my 401k contributions after the market crashed, cause i'm young and have a long term outlook. but the overall lesson is, you almost can't be conservative enough when handling your retirement savings and goals, especially as you near retirement. most people aren't equipped with detailed enough finance knowledge to navigate the 401k world intelligently.
You've never heard of Bill Mason? His fund was widely touted, and very well known. He had the longest "winning streak" in mutual fund management history. So if you've never heard of it, fine. But i certainly heard of it and didn't have to google.
Actually, his name is Bill Miller, and this former wunderkind of the investment world did, indeed, have a great fall after his 15-year winning run at Legg Mason.
Here is some of the latest news regarding old Bill:
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