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Over the past couple decades, the shift from pensions to 401(k)s has driven retirement inequality to an all-time high, making it harder for the majority of Americans to retire comfortably—or at all, as new analysis from the Economic Policy Institute shows.
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And so long as incomes remain stagnant for many Americans, and employers continue to substitute 401(k)s for traditional pensions, the inability to adequately save for retirement will continue—and the gap will worsen.
To me, it just seems like 401(k)s are just a big Ponzi scheme...
I'd rather just have a defined pension plan to be quite frank, but that's just me though...
To me, it just seems like 401(k)s are just a big Ponzi scheme...
I'd rather just have a defined pension plan to be quite frank, but that's just me though...
here is a tip !
stop wishing , stop complaining and start learning to play the cards you are dealt or you will end up with the rest of the whiners who do nothing but complain about things and end up with little ..
through it all those who want to be successful find a way - the rest find an excuse
Last edited by mathjak107; 03-06-2016 at 03:24 PM..
stop wishing , stop complaining and start learning to play the cards you are dealt or you will end up with the rest of the whiners who do nothing but complain about things and end up with little ..
through it all those who want to be successful find a way - the rest find an excuse
If people did not "complain and whine" about things, nothing would change or get better!
Social progress means not accepting the status quo...
Wrong. Complaining here is useless. Things are what they are . You can complain all you want but you better learn to play those cards or face the consequences . If you think your complaining is bringing back pensions you are dreaming.
Wrong. Complaining here is useless. Things are what they are . You can complain all you want but you better learn to play those cards or face the consequences . If you think your complaining is bringing back pensions you are dreaming.
There's a difference between activism and Facebook likes.
I used to feel like you but have changed my mind. I personally believe, as long as the company 401k match is relatively high and vests quickly (federal law should make it vest immediately, IMO) I prefer a 401k over a pension from a private corp. If you want a pension, you need to go work for the state or federal government.
My reasonings are many:
It allows portability. Often, in private industry, people can maximize their raises and income potential by switching employers every few years. A pension "locks you in" to that employer.
Similar to the above, if you are vested with your employer pension plan, and the company has financial difficulty, it's possible your pension could be frozen or lost altogether. Also, the company could come after you for pay cuts in order to stay afloat, and with no backup plan you'd be forced to accept. Once the 401k money hits your account, it's yours not theirs. Bankruptcy cannot take it away from you.
You can live anywhere you want. This is huge for us. I couldn't imagine being held down to a location because of a job. You have so much flexibility when you can move about the country as you desire.
401k's can potentially outpace a traditional pension in returns. If you start at an early enough age and set aside a large amount at first, your 401k can grow to a sizeable amount after 30-40 years.
401k's can be passed down to your heirs, pensions go away when you die.
There are certainly some pitfalls and these company match programs with pittance matches (ie 50% match up to 6% or something ridiculously low) need to change. Also I've personally seen 401k plans that had only high fee funds as choices, and the administrator was a board member on the company (ie getting a kickback). It would be nice if 401k plans went away completely and the tax code was overhauled to allow IRAs at the 401k level, with company contributions direct deposited into the IRA similar to your bank account. That way you could purchase any fund you wish, you wouldn't be beholden to the plan your employer dictates.
Not everyone had a defined pension plan. And more today have the 401K available to them to save for retirement.
The past wasn't as rosy as you seem to think OP.
In 1980 only 38% of workers had DB pension plans. (source is SSA site).
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