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Post by aztecwin on Apr 10, 2011 15:45:56 GMT -8
A 401K will absolutely meet retirement needs. It is a question of funding that plan out of current receipts to a level that will work out adequately. It is about funding to recognize the real cost without some future unfunded liability. They do not have to be underfunded and the real beauty is that it does not go away when you pass on. Of course, it is about funding. As I said, I have read no studys that say current funding levels for 401(k)s are adequate. The vast majority of people are no good at delayed gratification. This may well change in a generation or two when future workers see their parent's and grandparent's income streams from their inadequate savings run out. Most people will not be passing on 401(k) accounts to their heirs. Where would you go to find a study that addressed the idea of adequate funding for a 401K? That idea sounds funny to me. It is not about a study, it is about a simple calculation to find out a fair way for the employers and employees to both contribute to a 401K type plan that would approximate the plan that is being replaced. It is about recognizing the true cost of a retirement plan out of current receipts and not leaving a huge unfunded liability for future tax payers to try to cover. It looks like you don't want to admit that a simple fully funded plan is a idea whose time has come. It is studies. |
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Post by aztec70 on Apr 11, 2011 7:11:06 GMT -8
Of course, it is about funding. As I said, I have read no studys that say current funding levels for 401(k)s are adequate. The vast majority of people are no good at delayed gratification. This may well change in a generation or two when future workers see their parent's and grandparent's income streams from their inadequate savings run out. Most people will not be passing on 401(k) accounts to their heirs. Where would you go to find a study that addressed the idea of adequate funding for a 401K? That idea sounds funny to me. It is not about a study, it is about a simple calculation to find out a fair way for the employers and employees to both contribute to a 401K type plan that would approximate the plan that is being replaced. It is about recognizing the true cost of a retirement plan out of current receipts and not leaving a huge unfunded liability for future tax payers to try to cover. It looks like you don't want to admit that a simple fully funded plan is a idea whose time has come. It is studies. Evidently you do not understand what a 401(k) is. It is a VOLUNTARY retirement savings system. That is why they are underfunded. There is no requirement for company matches of employee contributions. You are suggesting a mandantory retirement contribution system. Would it be mandated by government? If so, are you sure you are a conservative?  You can find studys about the underfunding of 401(k)s all over the internet. The Economist article I referenced above speaks of the problem. Because of the business I am in I see them all the time. I am aware that common usage spelling of studys is "studies". I do not do it purposefully. If you are interested as to why, I will be happy to let you know. It is, however, not germane to this topic. |
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Post by aztecwin on Apr 11, 2011 12:28:18 GMT -8
Where would you go to find a study that addressed the idea of adequate funding for a 401K? That idea sounds funny to me. It is not about a study, it is about a simple calculation to find out a fair way for the employers and employees to both contribute to a 401K type plan that would approximate the plan that is being replaced. It is about recognizing the true cost of a retirement plan out of current receipts and not leaving a huge unfunded liability for future tax payers to try to cover. It looks like you don't want to admit that a simple fully funded plan is a idea whose time has come. It is studies. Evidently you do not understand what a 401(k) is. It is a VOLUNTARY retirement savings system. That is why they are underfunded. There is no requirement for company matches of employee contributions. You are suggesting a mandantory retirement contribution system. Would it be mandated by government? If so, are you sure you are a conservative? You can find studys about the underfunding of 401(k)s all over the internet. The Economist article I referenced above speaks of the problem. Because of the business I am in I see them all the time. I am aware that common usage spelling of studys is "studies". I do not do it purposefully. If you are interested as to why, I will be happy to let you know. It is, however, not germane to this topic. I know all that and agree. I am talking about a 401K type plan funded by the employer to some "fair" level with unlimited voluntary employee contribution above some minimum like around 4%. I am assuming that you are talking about employees not funding their 401K to a certain level and therefore not eligible for the match. That would not happen under the way I expect the City to structure their plan for new employees. About "studys", I have a lot of those kinds of things that I just can't get myself to do it correctly. Just trying to rub you the wrong way. |
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Post by aztec70 on Apr 11, 2011 13:38:22 GMT -8
Evidently you do not understand what a 401(k) is. It is a VOLUNTARY retirement savings system. That is why they are underfunded. There is no requirement for company matches of employee contributions. You are suggesting a mandantory retirement contribution system. Would it be mandated by government? If so, are you sure you are a conservative? You can find studys about the underfunding of 401(k)s all over the internet. The Economist article I referenced above speaks of the problem. Because of the business I am in I see them all the time. I am aware that common usage spelling of studys is "studies". I do not do it purposefully. If you are interested as to why, I will be happy to let you know. It is, however, not germane to this topic. I know all that and agree. I am talking about a 401K type plan funded by the employer to some "fair" level with unlimited voluntary employee contribution above some minimum like around 4%. I am assuming that you are talking about employees not funding their 401K to a certain level and therefore not eligible for the match. That would not happen under the way I expect the City to structure their plan for new employees. About "studys", I have a lot of those kinds of things that I just can't get myself to do it correctly. Just trying to rub you the wrong way. Do you want to discuss the City of San Diego's plan or are we talking pension plans in general? No, I am not talking about employees not contributing enough to get a match. I have never read, or heard, about any plans that require employees to contribute a certain amount to get a match. They may be out there, but they are news to me. I doubt they exist. Every plan I have any knowledge will match the first dollar of an employee's contribution, but no more than a set percentage of the employee's pay. Three percent is typical, never seen more than six percent. I am talking about people that do not contribute enough to retire on. As I said before, delayed gratification is hard for most people. It will get easier for future generations. They will have seen what happens when you don't save enough. |
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Post by aztecwin on Apr 11, 2011 18:47:24 GMT -8
I know all that and agree. I am talking about a 401K type plan funded by the employer to some "fair" level with unlimited voluntary employee contribution above some minimum like around 4%. I am assuming that you are talking about employees not funding their 401K to a certain level and therefore not eligible for the match. That would not happen under the way I expect the City to structure their plan for new employees. About "studys", I have a lot of those kinds of things that I just can't get myself to do it correctly. Just trying to rub you the wrong way. Do you want to discuss the City of San Diego's plan or are we talking pension plans in general? No, I am not talking about employees not contributing enough to get a match. I have never read, or heard, about any plans that require employees to contribute a certain amount to get a match. They may be out there, but they are news to me. I doubt they exist. Every plan I have any knowledge will match the first dollar of an employee's contribution, but no more than a set percentage of the employee's pay. Three percent is typical, never seen more than six percent. I am talking about people that do not contribute enough to retire on. As I said before, delayed gratification is hard for most people. It will get easier for future generations. They will have seen what happens when you don't save enough. Now that is a different problem. Some folks are too stupid to take care of themselves and possibly are candidates for Aztecjoe's plan to curtail breeding. I hope that the City's plan has some level of mandatory participation up to a certain level and the ability to contribute more. I also think you are right about automatic funding up to a certain level for most plans but you need to contribute to take the maximum benefit of the match. I note you seem to not dispute the wisdom of recognizing the full cost of funding retirement from current receipts. That is the biggest point to see. |
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Post by aztec70 on Apr 11, 2011 19:35:29 GMT -8
Do you want to discuss the City of San Diego's plan or are we talking pension plans in general? No, I am not talking about employees not contributing enough to get a match. I have never read, or heard, about any plans that require employees to contribute a certain amount to get a match. They may be out there, but they are news to me. I doubt they exist. Every plan I have any knowledge will match the first dollar of an employee's contribution, but no more than a set percentage of the employee's pay. Three percent is typical, never seen more than six percent. I am talking about people that do not contribute enough to retire on. As I said before, delayed gratification is hard for most people. It will get easier for future generations. They will have seen what happens when you don't save enough. Now that is a different problem. Some folks are too stupid to take care of themselves and possibly are candidates for Aztecjoe's plan to curtail breeding. I hope that the City's plan has some level of mandatory participation up to a certain level and the ability to contribute more. I also think you are right about automatic funding up to a certain level for most plans but you need to contribute to take the maximum benefit of the match. I note you seem to not dispute the wisdom of recognizing the full cost of funding retirement from current receipts. That is the biggest point to see. As to your second paragraph, the irony is so acute that I don't know where to start.  |
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Post by AztecWilliam on Apr 11, 2011 21:19:01 GMT -8
No one who objectively looks at the events in DC during that past six months could believe that the Democrats are seriously doing anything about the deficit and the national debt. No doubt the Dems would be delighted if those problems could be solved, but only if that could be accomplished without alienating their special interest group supporters. That will never happen.
In order to balance the budget and seriously reduce the national debt, plenty of pain is going to have to be felt by all. The Dems are the party that says to the voters, "What do you want, and how much of it do you want?" Politicians who have that fundamental orientation will be find it very difficult to tell citizens that they must make do with less from the government.
As for Pres. Clinton, there never, ever would have been balanced budgets had the GOP not controlled Congress from 1995 on.
AzWm
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Post by aztec70 on Apr 12, 2011 6:44:07 GMT -8
No one who objectively looks at the events in DC during that past six months could believe that the Democrats are seriously doing anything about the deficit and the national debt. No doubt the Dems would be delighted if those problems could be solved, but only if that could be accomplished without alienating their special interest group supporters. That will never happen. In order to balance the budget and seriously reduce the national debt, plenty of pain is going to have to be felt by all. The Dems are the party that says to the voters, " What do you want, and how much of it do you want?" Politicians who have that fundamental orientation will be find it very difficult to tell citizens that they must make do with less from the government. As for Pres. Clinton, there never, ever would have been balanced budgets had the GOP not controlled Congress from 1995 on. AzWm Oh, I have seen the light! Conservatives are so cool. Liberals do everything bad, and conservatives do everything good! ROFL |
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Post by aztecwin on Apr 12, 2011 13:58:13 GMT -8
Now that is a different problem. Some folks are too stupid to take care of themselves and possibly are candidates for Aztecjoe's plan to curtail breeding. I hope that the City's plan has some level of mandatory participation up to a certain level and the ability to contribute more. I also think you are right about automatic funding up to a certain level for most plans but you need to contribute to take the maximum benefit of the match. I note you seem to not dispute the wisdom of recognizing the full cost of funding retirement from current receipts. That is the biggest point to see. As to your second paragraph, the irony is so acute that I don't know where to start. Well? |
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Post by aztecwin on Apr 12, 2011 13:59:09 GMT -8
No one who objectively looks at the events in DC during that past six months could believe that the Democrats are seriously doing anything about the deficit and the national debt. No doubt the Dems would be delighted if those problems could be solved, but only if that could be accomplished without alienating their special interest group supporters. That will never happen. In order to balance the budget and seriously reduce the national debt, plenty of pain is going to have to be felt by all. The Dems are the party that says to the voters, " What do you want, and how much of it do you want?" Politicians who have that fundamental orientation will be find it very difficult to tell citizens that they must make do with less from the government. As for Pres. Clinton, there never, ever would have been balanced budgets had the GOP not controlled Congress from 1995 on. AzWm Oh, I have seen the light! Conservatives are so cool. Liberals do everything bad, and conservatives do everything good! ROFL Now you are starting to catch on! |
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Post by theMesa on Apr 12, 2011 17:54:03 GMT -8
Pooh retired from the Nav at age 38 while I retired when I was 18 years older than he was and still work half-time to make up the difference.
=Bob[/quote]
So you retired at 56??? Very, very weak statement if I must say and you're proud of that?? I am still working at 64 paying all my social security, medicare and heavy health insurance premiums since I am self employed. In addition, I struggle to make all my IRA contributions with no subsidy from an employer. The total retirement amount that I've saved to date isn't all that impressive after all the stock market crashes. To go along with that, after 35 years of sitting at a desk I have chronic neck and back pain to go along with an arthritic hand from writing hundreds of miles of calculations during that time period. This doesn't even speak to the stress that I have endured because of the precision needed in my line of work. I think about retirement every day but can't until the age of 66.
My brother-in-law retired from the military and I don't begrudge him since he put his life on the line in Vietnam. In retrospect, wish I would have followed his path and joined the military.
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Post by AztecWilliam on Apr 12, 2011 19:50:16 GMT -8
Here's a suggestion. Perhaps it would be better to refrain from taking shots at each other regarding when and how we have retired (or are anticipating retirement).
AzWm
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Post by AlwaysAnAztec on Apr 13, 2011 4:19:37 GMT -8
Here's a suggestion. Perhaps it would be better to refrain from taking shots at each other regarding when and how we have retired (or are anticipating retirement). AzWm Then the 'Administrator' should delete this thread. Shouldn't he? |
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Post by 01aztecgrad on Apr 13, 2011 16:37:55 GMT -8
On the Federal level the the benefit is not gamed in the final year, that is right. What is wrong is that the pensions are not funded. Funding Federal pensions would be a bad idea. The Federal Thrift Savings Plan is already the largest defined contribution plan in the country, and it's only been around for 20 years, and isn't a primary retirement source for the employees under the old Civil Service Rules or the Military. Why is that a problem? There is nowhere for the Government to invest the amount of money needed for a pension fund without completely distorting the market. Lets start with the idea of the Government investing in a TSP like fund, which is basically a small selection of index funds. With 2 million Federal employees, and 1.3 million members of the Military, you'd be looking at a minimum of an additional $33B a year flooding the stock market from the Federal Government. Added to the money already in the TSP, you would quickly get to the point where the Federal Government is the largest investor in all of the worlds largest companies. At that point you have to ask, who gets the Federal Government vote on the Board of Directors? What's to stop the Federal Government from essentially controlling the company through the Board? As a large investor, wouldn't the Government have an interest in ensuring that their investment is profitable by giving them an advantage in any business dealings? Wouldn't they want to help them avoid bankruptcy? That is why privatizing Social Security is a horrible idea as well. Now assume the money is instead invested in a "Trust Fund" of secure Government paper. That really just subsidizes current government spending, because there's no reason to keep money in some fictitious account when you're running a deficit, and there's no reason to pay interest on money to yourself if there isn't a deficit, and unlike Social Security, which is actually funded by dedicated taxes, this would just be funded by general tax revenue, so in a time of deficit, you'd have the Government issuing bonds in the open market on which they'll pay interest, to set up a "Trust Fund" on which it will pay interest. |
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Post by aztecwin on Apr 13, 2011 17:13:46 GMT -8
On the Federal level the the benefit is not gamed in the final year, that is right. What is wrong is that the pensions are not funded. Funding Federal pensions would be a bad idea. The Federal Thrift Savings Plan is already the largest defined contribution plan in the country, and it's only been around for 20 years, and isn't a primary retirement source for the employees under the old Civil Service Rules or the Military. Why is that a problem? There is nowhere for the Government to invest the amount of money needed for a pension fund without completely distorting the market. Lets start with the idea of the Government investing in a TSP like fund, which is basically a small selection of index funds. With 2 million Federal employees, and 1.3 million members of the Military, you'd be looking at a minimum of an additional $33B a year flooding the stock market from the Federal Government. Added to the money already in the TSP, you would quickly get to the point where the Federal Government is the largest investor in all of the worlds largest companies. At that point you have to ask, who gets the Federal Government vote on the Board of Directors? What's to stop the Federal Government from essentially controlling the company through the Board? As a large investor, wouldn't the Government have an interest in ensuring that their investment is profitable by giving them an advantage in any business dealings? Wouldn't they want to help them avoid bankruptcy? That is why privatizing Social Security is a horrible idea as well. Now assume the money is instead invested in a "Trust Fund" of secure Government paper. That really just subsidizes current government spending, because there's no reason to keep money in some fictitious account when you're running a deficit, and there's no reason to pay interest on money to yourself if there isn't a deficit, and unlike Social Security, which is actually funded by dedicated taxes, this would just be funded by general tax revenue, so in a time of deficit, you'd have the Government issuing bonds in the open market on which they'll pay interest, to set up a "Trust Fund" on which it will pay interest. Once your plan is an IRA of any sort, you vote your shares and make investment decisions. The TSP is as you describe and I can see what you are saying, but I would think that making the plan owned by you and having you make the investment decisions would overcome your objections. Social Security could be the same if privatized. I would look at the influx of money and new money every month as a possible boon to keeping market prices high. Your take however is one real reason why the TSP Model of investment choices being index funds of one nature or another is really valid, but easy to overcome by making the individual accounts owned by the individual and that individual making the decisions and voting the shares. I also see the danger if choices like Enron were made. Perhaps a private advisers participation would overcome that obvious objection. Very good take however. The people above who gripe about those of us who retired from the Military and also had long careers in Federal Civil Service seem to either have personal envy problems or just personal problems. We all have similar opportunities and make choices as we go through our working lives. Choosing a different path should not be a reason to turn green at what others have done. I also differ a little about the portion of the Federal Retirement that is the Rollover IRA from the TSP. That is by far now the largest part of my Federal Retirement mainly because I have never touched it other than having to take the mandated distribution after turning 70 1/2 and then investing that in a taxable account. |
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Post by aztec70 on Apr 14, 2011 9:20:12 GMT -8
On the Federal level the the benefit is not gamed in the final year, that is right. What is wrong is that the pensions are not funded. Funding Federal pensions would be a bad idea. The Federal Thrift Savings Plan is already the largest defined contribution plan in the country, and it's only been around for 20 years, and isn't a primary retirement source for the employees under the old Civil Service Rules or the Military. Why is that a problem? There is nowhere for the Government to invest the amount of money needed for a pension fund without completely distorting the market. Lets start with the idea of the Government investing in a TSP like fund, which is basically a small selection of index funds. With 2 million Federal employees, and 1.3 million members of the Military, you'd be looking at a minimum of an additional $33B a year flooding the stock market from the Federal Government. Added to the money already in the TSP, you would quickly get to the point where the Federal Government is the largest investor in all of the worlds largest companies. At that point you have to ask, who gets the Federal Government vote on the Board of Directors? What's to stop the Federal Government from essentially controlling the company through the Board? As a large investor, wouldn't the Government have an interest in ensuring that their investment is profitable by giving them an advantage in any business dealings? Wouldn't they want to help them avoid bankruptcy? That is why privatizing Social Security is a horrible idea as well. Now assume the money is instead invested in a "Trust Fund" of secure Government paper. That really just subsidizes current government spending, because there's no reason to keep money in some fictitious account when you're running a deficit, and there's no reason to pay interest on money to yourself if there isn't a deficit, and unlike Social Security, which is actually funded by dedicated taxes, this would just be funded by general tax revenue, so in a time of deficit, you'd have the Government issuing bonds in the open market on which they'll pay interest, to set up a "Trust Fund" on which it will pay interest. I don't think recognizing the true cost of an ongoing expense is ever a bad idea. Being ignorant of costs is a prime reason we have such a mess now. Your points are interesting and worthwhile to our conversation. On the other hand not funding any of it makes all those future costs come due on someone else's tax dollar. If we have to fund all federal pensions with current income it really adds to the problems when revenues are down. I do see you points about the largeness of the funding requirement, but really think they are overblown. Here are some suggestions for federal pensions if they must be unfunded. Make them variable, if federal revenues drop too low then pensions are adjusted downwards to reflect that fact. Delay the paying out of pensions until "pick an age". Perhaps 55 for those that retire with 30 years service, and 60 for those that retire on 20 years service. Different rules for those that are medically retired. |
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Post by Bob Forsythe on Apr 16, 2011 6:59:00 GMT -8
Pooh retired from the Nav at age 38 while I retired when I was 18 years older than he was and still work half-time to make up the difference. =Bob So you retired at 56??? Very, very weak statement if I must say and you're proud of that?? I am still working at 64 paying all my social security, medicare and heavy health insurance premiums since I am self employed. In addition, I struggle to make all my IRA contributions with no subsidy from an employer. The total retirement amount that I've saved to date isn't all that impressive after all the stock market crashes. To go along with that, after 35 years of sitting at a desk I have chronic neck and back pain to go along with an arthritic hand from writing hundreds of miles of calculations during that time period. This doesn't even speak to the stress that I have endured because of the precision needed in my line of work. I think about retirement every day but can't until the age of 66. My brother-in-law retired from the military and I don't begrudge him since he put his life on the line in Vietnam. In retrospect, wish I would have followed his path and joined the military.[/quote] If I'd had my druthers I would not have retired when I did. But management where I worked was becoming intolerable (take my word for it - every person in that department over age 50 feels threatened) and I was offered a job with a non-profit that looked great but I knew was shaky and did in fact end after about a year, so I wanted some guaranteed income. But I'm now 61 and working half-time (or more accurately getting paid for 20 hours per week) for another non-profit and loving every minute of it. I like to give Pooh all sorts of moral outrage but I really don't begrudge him for taking advantage of the system that was in place at the time. I do think, however, that maybe military retirements should be more along the lines of public safety retirement. If they retire before age 50 it's deferred until that age unless they were disabled in combat (and that would include PTSD). =Bob |
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