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Old 04-28-2014, 09:04 AM
 
Location: Central Massachusetts
4,800 posts, read 4,853,880 times
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How to keep grow retirement nest egg - baltimoresun.com



Interesting points in this article. First only 25% of those earning 20k have access to a 401k and 75% of those earning over 80k have a employer sponsored program. Since the 401k law in 1978 it is surprising that more are not offered. It has been a long slow increase in the number of companies that have such plans in place. I would say that one of the key reasons is that they assume and rightly so that they would cost the employer money. It is also a lot of extra work and for what. It doesn't equate to the company making more money. It might make employees more apt to stick around and work harder but maybe not.

So here are a few tips AARP and many financial experts offer.
Quote:
Save early and often

Contribute at least up to the amount that your company will match

Investigate a potential employer before you accept a job

Invest in a balanced portfolio

Keep the big picture in mind

Remember that 401(k) funds will be taxed eventually

Consider using 401(k) or IRA funds to postpone tapping into your Social Security benefits for as long as possible
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Old 04-28-2014, 02:50 PM
 
Location: Gilbert, AZ
3,186 posts, read 1,965,390 times
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Someone who's earning $20K is probably not too interested in a 401(k), and by all rights probably should not be worrying about saving for retirement. They're much better off investing in their own career, which will allow them to earn more money over the rest of their life.

I started my first professional job at age 24. Even with a relatively well-paying job, I only put small amounts away for retirement in those first years. For me the serious retirement saving and investing didn't start until I was around 30. Before that, most of my disposable income went toward building an emergency account, paying off a student loan, accumulating a down payment for a house, and paying off a car loan.

hikernut
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Old 05-01-2014, 10:11 AM
 
Location: USA
1,815 posts, read 2,245,143 times
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I've always worked in a field where no pension or 401k was ever offered. You can save on your own. I have. And there's no timetable for when I have to withdraw my money. I am in complete control of it.
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Old 05-01-2014, 10:18 AM
 
Location: Central Massachusetts
4,800 posts, read 4,853,880 times
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Quote:
Originally Posted by Red On The Noodle View Post
I've always worked in a field where no pension or 401k was ever offered. You can save on your own. I have. And there's no timetable for when I have to withdraw my money. I am in complete control of it.

Unless you are not saving it under the title IRA, SEP or KEOGH, or it is a Roth there is a time table to withdraw. IRA and the others are tax defered and at age 70 and a half you need to make RMD's (Required Minimum Distributions). You are in complete control but if it was saved in that way Uncle Sam knows it is there and they have tracked it. They know how much you have and will ask for their cut. Do not miss that RMD because it is 50% penalty on top of the tax of the amount you were supposed to take out of those acounts.
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Old 05-01-2014, 10:53 AM
 
48,516 posts, read 83,989,888 times
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Is this all retirement plans or just 410K because there are a lot of others besides thru employer pensions and unions or associations.
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Old 05-01-2014, 11:43 AM
 
Location: Central Massachusetts
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Quote:
Originally Posted by texdav View Post
Is this all retirement plans or just 410K because there are a lot of others besides thru employer pensions and unions or associations.

If you are talking about the RMD, YES all excluding Roth and annuities which are insurance driven. Pensions are also not counted as the are normally a monthly sum of income. The key is all retirement accounts that received preferential tax treatment (meaning you took a deduction/exepmtion) is counted. All as a single pile of money. That money will be banged up against an actuary table and a percentage is withdrawn. There are two one with spouse and the other single. If you have a spouse that age is factored in and the percentage is based on that combined number.
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Old 05-01-2014, 01:45 PM
 
Location: Tennessee
23,623 posts, read 17,606,575 times
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"Interesting points in this article. First only 25% of those earning 20k have access to a 401k and 75% of those earning over 80k have a employer sponsored program. Since the 401k law in 1978 it is surprising that more are not offered."

The people who are making $20k are more concerned about subsistence than retirement planning. Moreover, employers of such low paid personal probably offer few, if any, benefits. None of that is surprising.
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Old 05-01-2014, 02:24 PM
 
Location: Columbia SC
8,992 posts, read 7,762,382 times
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Quote:
Originally Posted by Emigrations View Post
"Interesting points in this article. First only 25% of those earning 20k have access to a 401k and 75% of those earning over 80k have a employer sponsored program. Since the 401k law in 1978 it is surprising that more are not offered."

The people who are making $20k are more concerned about subsistence than retirement planning. Moreover, employers of such low paid personal probably offer few, if any, benefits. None of that is surprising.
I agree. It is not like it is there and they are not taking advantage of it. Even if there, at $20K a year one is barely getting buy with day to day needs/requirements.
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Old 05-01-2014, 08:09 PM
 
Location: Central Massachusetts
4,800 posts, read 4,853,880 times
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Quote:
Originally Posted by Emigrations View Post
"Interesting points in this article. First only 25% of those earning 20k have access to a 401k and 75% of those earning over 80k have a employer sponsored program. Since the 401k law in 1978 it is surprising that more are not offered."

The people who are making $20k are more concerned about subsistence than retirement planning. Moreover, employers of such low paid personal probably offer few, if any, benefits. None of that is surprising.
Quote:
Originally Posted by johngolf View Post
I agree. It is not like it is there and they are not taking advantage of it. Even if there, at $20K a year one is barely getting buy with day to day needs/requirements.

To respond to both on these points I would agree that it is surprising that:

1 there are not more 401k plans offered especially in the higher wage earners.
2 that the 20k wage earners are more concerned to making ends meet.

I will offer that there cannot be many families making that 20k wage. I think you can make that bagging groceries at the local Market Basket. I do not see family men and women doing that for a living. I see high school and college kids doing that. That might be just my area but I honestly have difficulty grabbing my mind around that.

Another point that is not made here is what about the 20.1k to 79.9k wage earners. It is a large chunk of workers in that and most of those would be what we would call middle class. A lot of families are 2 income homes and that could put a different spin to it should they have looked at that bracket.

I Golfingduo's world 20k wage earners would have at least access to "my RA" as previously posted in another thread. This is to hope that they would begin to look at the possibilities. Look at what could be even though it is a slow (very slow) growth fund. I think it is just the beginning.
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Old 05-01-2014, 09:29 PM
 
Location: SW MO
23,605 posts, read 31,506,246 times
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Let me try to help you wrap your brain around the reality of much of middle and deep southern America. Wages in rural villages and small towns can be as low as $8 an hour and adults do bag groceries and are happy to be employed. Not everyone lives in a coastal state or affluent area with numerous employment opportunities that provide decent wages. Poverty is pervasive as are health issues. There's a whole, wide world outside of New England, you know.
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