dancinmama
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Post by dancinmama on Jun 21, 2011 8:38:20 GMT -5
On one hand, I don't think it's kosher to change the rules of 20-30 years, two years before people are set to retire. I do think there's spiking, etc. going on and cracking down on that would be fine. On the flip side, new hires (and even maybe those hired within the last 5 years) need to be hired under different terms. The current setup is simply unsustainable. But isn't that what the federal government is talking about doing with social security and medicare (changing the rules of 20-30 years), and younger people don't seem too up in arms about that. DH "planned" to retire next year at age 55. We have been working and planning for this since he was 24. All these years we assumed that we'd get full medicare at age 65; but according to Ryan's plan, we won't. We're trying to make decisions about the rest of our life RIGHT NOW, and we don't know what the hell is going to happen with these "benefits". The government seems to think that giving someone 10 years notice about a change is enough time for people to make adjustments in their retirement planning. Our planning has been in the making for 31 years and was supposed to be implemented FIVE MONTHS FROM NOW.
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973beachbum
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Post by 973beachbum on Jun 21, 2011 8:41:26 GMT -5
Isn't the only way out of those health care contracts for the state to declare bankrupcy? Except that since the state has the ability to tax people, it can't declare bankruptcy. My state is NJ. They keep trying to push everything onto the new hires as a solution. They are rapidly reaching the point that the new hires would have to pay for all the pension and benefits for all the older workers and never be entitled to them themselves to actually solve the problem. Would anyone here actually take that?
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swamp
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Post by swamp on Jun 21, 2011 8:42:21 GMT -5
Isn't the only way out of those health care contracts for the state to declare bankrupcy? Except that since the state has the ability to tax people it can't declare bankruptcy. My state is NJ. They keep trying to push everything onto the new hires as a solution. They are rapidly reaching the point that the new hires would have to pay for all the pension and benefits for all the older workers and never be entitled to them themselves to actually solve the problem. Would anyone here actually take that? NY now has a Tier 5 for retirement, which is basically you get bupkis.
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973beachbum
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Post by 973beachbum on Jun 21, 2011 8:45:51 GMT -5
There were a couple of school districts, near me, that the unions voted that all new hires don't get health insurance benefits.
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Post by Deleted on Jun 21, 2011 9:12:57 GMT -5
I don't see state legislatures voting themselves a pay decrease, giving up their per diems and state leased vehicles, offering to pay more for their state benefits, laying off some of their staff, etc. I know in a lot of states the legislature pay is low and the work is part-time, but in PA legislative salaries are over $70,000 (more than many teacher salaries-- my BIL has been teaching for five years and is in the $40,000 range) and the perks are big. I'll believe there's a real financial crisis when everyone is forced to sacrifice. Symbolic gestures may make you warm and fuzzy, but they just frustrate me. Let's have public debates about things that will make a significant impact.
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swamp
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Post by swamp on Jun 21, 2011 9:16:01 GMT -5
I don't see state legislatures voting themselves a pay decrease, giving up their per diems and state leased vehicles, offering to pay more for their state benefits, laying off some of their staff, etc. I know in a lot of states the legislature pay is low and the work is part-time, but in PA legislative salaries are over $70,000 (more than many teacher salaries-- my BIL has been teaching for five years and is in the $40,000 range) and the perks are big. I'll believe there's a real financial crisis when everyone is forced to sacrifice. Symbolic gestures may make you warm and fuzzy, but they just frustrate me. Let's have public debates about things that will make a significant impact. You don't think full pension/retirement and health insurance benefits for someone who served one term in a state legislature doesn't make a difference?
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Post by Deleted on Jun 21, 2011 9:16:46 GMT -5
Look at how IL does their pensions. Contribute 11% of your pay, work for 30 years, and then get 70% of your HIGHEST 3 years salary. Does that make sense? At the very least, it should be 70% of your AVERAGE salary. Why would anyone be willing to give up 11% of their pay for a pension based on average salary over your whole working life? You'd be paying way too much for a tiny pension, and we're already doing that through SS. How many crappy pensions can people afford to buy into while still saving enough to actually retire at some point? I wouldn't call it "crappy". You're still talking about a $40K annual pension if they used the same formula and used the average salary as the basis. That's assuming a starting salary of $32K, 4% increases, and 30 years on the job. Ultimately the goal of the gov't should be to eliminate pensions totally, especially defined benefit pensions. No politicians have ever shown the willingness to put in the money they say they're going to put in, so why continue the charade? Let employees bargain on a year by year basis strictly for wages. No more pensions and health care.
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dancinmama
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Post by dancinmama on Jun 21, 2011 9:38:39 GMT -5
There were a couple of school districts, near me, that the unions voted that all new hires don't get health insurance benefits. And this is what burns my butt about the unions. They're waving banners saying that the benefits that ALL WORKERS in the US are getting are the result of their hard work and negotiations, then they turn around and crap on their newbie members. They aren't even taking care of their own.
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Cookies Galore
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Post by Cookies Galore on Jun 21, 2011 9:41:09 GMT -5
I don't see state legislatures voting themselves a pay decrease, giving up their per diems and state leased vehicles, offering to pay more for their state benefits, laying off some of their staff, etc. I know in a lot of states the legislature pay is low and the work is part-time, but in PA legislative salaries are over $70,000 (more than many teacher salaries-- my BIL has been teaching for five years and is in the $40,000 range) and the perks are big. I'll believe there's a real financial crisis when everyone is forced to sacrifice. Symbolic gestures may make you warm and fuzzy, but they just frustrate me. Let's have public debates about things that will make a significant impact. Symbolic, schymbolic. I only know where I live, but the PA legislature IS bloated and has to be reformed. There are a lot of problems in this state, but blaming the profession of the moment is not the long-term fix. You can't tell me that 253 representatives, thousands of staffers and aides, over 400 statewide offices (67 counties), fully funded defined benefit pensions, paid for health care (staffers are fully covered as well), salaries starting at $73,000 (we have legislatures making over $100,000), vehicle lease benefits, hundreds of dollars a day per diem, plus other fringe benefits, all for working less days a year than a teacher is okay.
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CarolinaKat
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Post by CarolinaKat on Jun 21, 2011 10:02:48 GMT -5
Look at how IL does their pensions. Contribute 11% of your pay, work for 30 years, and then get 70% of your HIGHEST 3 years salary. Does that make sense? At the very least, it should be 70% of your AVERAGE salary. Why would anyone be willing to give up 11% of their pay for a pension based on average salary over your whole working life? You'd be paying way too much for a tiny pension, and we're already doing that through SS. How many crappy pensions can people afford to buy into while still saving enough to actually retire at some point? I wouldn't call it "crappy". You're still talking about a $40K annual pension if they used the same formula and used the average salary as the basis. That's assuming a starting salary of $32K, 4% increases, and 30 years on the job. 4% annual wage increases? That's a given? I didn't know that. Teachers here rarely get a raise, even a COLA. ETA: I'm from no union land, that might be the difference
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Post by tea4me on Jun 21, 2011 10:11:12 GMT -5
OP: I exalt you. This is my favorite topic and I agree with you.
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Post by Deleted on Jun 21, 2011 10:32:19 GMT -5
Symbolic gestures may make you warm and fuzzy, but they just frustrate me. Let's have public debates about things that will make a significant impact. You don't think full pension/retirement and health insurance benefits for someone who served one term in a state legislature doesn't make a difference? Key words in my statement were SIGNIFICANT IMPACT.. It is easy to "make a difference", but it is hard to make a significant difference.
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Post by Deleted on Jun 21, 2011 10:34:32 GMT -5
I wouldn't call it "crappy". You're still talking about a $40K annual pension if they used the same formula and used the average salary as the basis. That's assuming a starting salary of $32K, 4% increases, and 30 years on the job. 4% annual wage increases? That's a given? I didn't know that. Teachers here rarely get a raise, even a COLA. ETA: I'm from no union land, that might be the difference This is union, so that's definitely the difference. My wife went from $32K in 2002 to $60K currently. But she had a bump in there for getting her masters. But still, they just signed a 5 year contract with a guaranteed raise of at least 3% plus an incentive portion based on test scores. I want to say that it maxes out at 5% or so. I think it's gotten really bad in the last 5-6 years. I think even 10 years ago, teachers wages were in-line. They typically got paid just a bit less than private sector workers and, if you annualized their salary, they were pretty much right on target. Now my wife makes the equivalent of $80K per year. Now, realistically that's not even the problem. She teaches at a really top-tier school district and the parents are willing to pay for the best teachers. However, I'm assuming that the rest of the state is picking up the tab for the inflated pensions that these teachers are getting.
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Post by Deleted on Jun 21, 2011 10:36:57 GMT -5
Symbolic gestures may make you warm and fuzzy, but they just frustrate me. Let's have public debates about things that will make a significant impact. Symbolic, schymbolic. I only know where I live, but the PA legislature IS bloated and has to be reformed. There are a lot of problems in this state, but blaming the profession of the moment is not the long-term fix. You can't tell me that 253 representatives, thousands of staffers and aides, over 400 statewide offices (67 counties), fully funded defined benefit pensions, paid for health care (staffers are fully covered as well), salaries starting at $73,000 (we have legislatures making over $100,000), vehicle lease benefits, hundreds of dollars a day per diem, plus other fringe benefits, all for working less days a year than a teacher is okay. Who is telling you it is ok? I'm telling you it is not going to fix the problem because reducing 5 or 10% of a small number is still a small number. We can all agree something should be done there, but the numbers are so small compared the the deficit in these states, the result would be symbolic.
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giramomma
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Post by giramomma on Jun 21, 2011 12:11:11 GMT -5
That's assuming a starting salary of $32K, 4% increases, and 30 years on the job.
Let employees bargain on a year by year basis strictly for wages. No more pensions and health care That's alot of assuming. I've been at my state job for 7 years, and I've never seen a 4% increase. The best I did was 2% increase in one year. Over the last two years, it was about a 3% decrease, due to furloughs. I figure, this next year, my take home will be right where I started 7 years ago. The worker's ability to bargain over conditions and wages was taken away. Raises are now tied to the inflation and capped at 5%. Who is going to waste their time bargaining over a .5% increase? To me as a consumer, the loss of the ability to bargain of conditions is much worse. Nurses can't bargain over how long they've been on the job or how many patients they are responsible for. I don't want to be in a bad accident and have a nurse who has been working for 15 or 16 hours hours straight tend to me. I can't believe most people would want this. Furthermore, our state is WAITING to take out more money for our benefits until after the recall elections are done. How is that fiscally responsible? And if it was such a need, why aren't they looking to take this money out NOW, instead of two months later.
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Post by Deleted on Jun 21, 2011 12:28:25 GMT -5
That's assuming a starting salary of $32K, 4% increases, and 30 years on the job.
Let employees bargain on a year by year basis strictly for wages. No more pensions and health care That's alot of assuming. I've been at my state job for 7 years, and I've never seen a 4% increase. The best I did was 2% increase in one year. Over the last two years, it was about a 3% decrease, due to furloughs. I figure, this next year, my take home will be right where I started 7 years ago. The worker's ability to bargain over conditions and wages was taken away. Raises are now tied to the inflation and capped at 5%. Who is going to waste their time bargaining over a .5% increase? To me as a consumer, the loss of the ability to bargain of conditions is much worse. Nurses can't bargain over how long they've been on the job or how many patients they are responsible for. I don't want to be in a bad accident and have a nurse who has been working for 15 or 16 hours hours straight tend to me. I can't believe most people would want this. Furthermore, our state is WAITING to take out more money for our benefits until after the recall elections are done. How is that fiscally responsible? And if it was such a need, why aren't they looking to take this money out NOW, instead of two months later. It's not assuming, it's reality in Illinois. It shouldn't be surprising that your wages are flat for 7 years. Look at state revenues. And not sure how the nurse working 14 hours is relevant. Doubtful that the union would have them limit work to a certain amount of hours. They'll just ask for more pay. Not much safer.
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Phoenix84
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Post by Phoenix84 on Jun 21, 2011 12:46:28 GMT -5
State's backing out of and changing the terms of contracts is wrong. I don't see how you can support a state to change employee contracts while still saying someone shouldn't walk away from their mortgage. They're essentially the same thing. The government as an obligation to meet the contracts it makes with it's workers. If the contracts are up for renewal or the laws changed then negoiating based on current conditions is fair.
Why is a contract between a lender and homeowner more sacred than a contract between the government and it's employees?
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Post by tea4me on Jun 21, 2011 13:09:04 GMT -5
State's backing out of and changing the terms of contracts is wrong. I don't see how you can support a state to change employee contracts while still saying someone shouldn't walk away from their mortgage. They're essentially the same thing. The government as an obligation to meet the contracts it makes with it's workers. If the contracts are up for renewal or the laws changed then negoiating based on current conditions is fair. Why is a contract between a lender and homeowner more sacred than a contract between the government and it's employees? Is it because the government pays it's employees with the taxpayer's money? Just asking . . .
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Post by Deleted on Jun 21, 2011 13:17:29 GMT -5
My wife is an IL union teacher so I am a beneficiary of this. But seriously, deal or not, I can't see how any teacher or public worker can say with a straight face that this isn't a HUGE ripoff for taxpayers. The main reason I don't like the "Deal is a deal" argument is because one political class, looking to win favor, can make a deal that will destroy the state for decades to come. That's why I favor 1-year contracts and limiting it ONLY to pay. Look at how IL does their pensions. Contribute 11% of your pay, work for 30 years, and then get 70% of your HIGHEST 3 years salary. Does that make sense? At the very least, it should be 70% of your AVERAGE salary. After all, that's what the contributions are based on. Compensation is not pay alone. Why could the union not negotiate an extra day off instead of a part of a raise or the employer paying a portion of the medical cost vs the raise. Or what about negotiating how overtime is done, a bigy in nurse union contracts? Why are those things bad to negotiate?
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Sum Dum Gai
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Post by Sum Dum Gai on Jun 21, 2011 13:52:42 GMT -5
I wouldn't call it "crappy". You're still talking about a $40K annual pension if they used the same formula and used the average salary as the basis. That's assuming a starting salary of $32K, 4% increases, and 30 years on the job. Of course it's crappy, you have to account for how little purchasing power you end up with thirty years later. The number itself may seem fine compared to today's wages, but thirty years of inflation will totally rape it. Taken from the national average wage index on the SSA website. 1980 12,513.46 1981 13,773.10 1982 14,531.34 1983 15,239.24 1984 16,135.07 1985 16,822.51 1986 17,321.82 1987 18,426.51 1988 19,334.04 1989 20,099.55 1990 21,027.98 1991 21,811.60 1992 22,935.42 1993 23,132.67 1994 23,753.53 1995 24,705.66 1996 25,913.90 1997 27,426.00 1998 28,861.44 1999 30,469.84 2000 32,154.82 2001 32,921.92 2002 33,252.09 2003 34,064.95 2004 35,648.55 2005 36,952.94 2006 38,651.41 2007 40,405.48 2008 41,334.97 2009 40,711.61 Add all those numbers up and you get 780,297 which you divide by thirty to get 26,009 (the average salary earned over the thirty years) which we multiply by .7 (to get the 70% pension amount), leaving a whopping $18,206* as your pension. That would have sounded like a decent amount of money in 1980, but you'd have a hell of a time living on it now. Would it really be worth giving up 11% of your pay for all those years? Somebody else will have to figure out how much 11% of those wages would be worth if it was invested in an index fund through a 401k instead, but using the 4% withdrawal rule you'd need it to be worth $455,150 to be able to withdraw $18,206 the first year. * I got lazy and just used the whole dollars and ignored the change without rounding when doing the math. It shouldn't affect the final number by more than a dollar anyway.
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Post by Deleted on Jun 21, 2011 14:17:05 GMT -5
Well that is the reality. Using your example, what did they contribute? A total of $85K. I mean what do you really expect? Personally I'd rather have a lump sum of cash that i can access too, but people are strange. They'd rather have a guranteed amount every month, which is why they money into annuities.
The crime of the state defined pension programs is that they take that pittance in contributions and try to make it into a great pension, courtesy of taxpayers.
The whole thing irks me. Kinda like when liberals will scream about how they want access to "affordable" health insurance, like the politicians have. It's not affordable, it's subsidized.
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Post by Deleted on Jun 21, 2011 14:20:35 GMT -5
My wife is an IL union teacher so I am a beneficiary of this. But seriously, deal or not, I can't see how any teacher or public worker can say with a straight face that this isn't a HUGE ripoff for taxpayers. The main reason I don't like the "Deal is a deal" argument is because one political class, looking to win favor, can make a deal that will destroy the state for decades to come. That's why I favor 1-year contracts and limiting it ONLY to pay. Look at how IL does their pensions. Contribute 11% of your pay, work for 30 years, and then get 70% of your HIGHEST 3 years salary. Does that make sense? At the very least, it should be 70% of your AVERAGE salary. After all, that's what the contributions are based on. Compensation is not pay alone. Why could the union not negotiate an extra day off instead of a part of a raise or the employer paying a portion of the medical cost vs the raise. Or what about negotiating how overtime is done, a bigy in nurse union contracts? Why are those things bad to negotiate? Personally I don't really care if unions negotiate for things not related to pay. (work conditions, sick days, overtime, etc). What I don't like is when they negotiate things that will effect future generations. Pensions and future health care basically. That's why I'd be in favor of the eliminations of state pensions (or phasing out) and only guaranty ACCESS to health care, not any specific premiums. It's irresponsible for politicians to put taxpayers on the hook for costs that they have no idea how to predict, let alone set aside funds for.
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Frappuccino
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Post by Frappuccino on Jun 21, 2011 14:26:04 GMT -5
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Sum Dum Gai
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Post by Sum Dum Gai on Jun 21, 2011 14:30:31 GMT -5
Well that is the reality. Using your example, what did they contribute? A total of $85K. I mean what do you really expect? It's not just the contributions though, it's the thirty years of compounding interest that you lose by not being able to invest that money over thirty years. I was trying to explain to my wife's super liberal uncle why I'll take my 401k over a pension any day, and he just couldn't grasp the compounding interest part. He kept talking about what a good deal SS, and pensions were, using some weird math where the 401k never makes any return on the money invested. There's also the fact that I don't trust somebody else to manage the pension fund for thirty years without fraking it up somehow. Either raiding the money, investing it in something stupid like mortgage derivatives, or investing in companies due to friendships or something and getting a crappy return or none at all. Not only am I trading a big chunk of my pay for a small defined amount later that inflation will probably kill, but I'm putting my faith in somebody else that won't really be hurt if he screws me, oh, and I get all the headaches with vesting and whatnot. Yeah... no thanks.
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Frappuccino
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Post by Frappuccino on Jun 21, 2011 14:32:07 GMT -5
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gawgagranny
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Post by gawgagranny on Jun 21, 2011 14:45:51 GMT -5
Dancinmama, I feel your pain....I am a career state govt. employee myself and am currently hoping my job will last long enough for me to get to early retirement in a few months so I can collect part of my "extravagant" pension, which in my case will be less than 60% of my current salary (which has been the same for the past 4 years, BTW--no raises). Then I am hoping to collect at least part of that pension in the future unless/until the rules get changed..... I don't know much about other states or federal employees, but here I have spent most of my professional career working for significantly less salary than I could have made in most any other job that I am eligible for--working for less money at the time with the promise of a decent (not lavish) retirement (which we do contribute to, BTW). My retirement plans already got shot to he_ _ once when I got divorced (XH made a lot more $ than me and we were on track to be sitting pretty for retirement by now).... I can't specifically address the problem in Florida with the teachers' union as we are non-union here, but the idea of having the rules changed at the end of the game really sucks big ones.
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Post by Deleted on Jun 21, 2011 14:46:01 GMT -5
There are ways to predict pension costs. Companies that offer annuities do it all the time. The problem is that state and local governments don't want to fund these until there is a shortfall. If they made their contributions in good times as well as bad, their contributions (and ours) could make up for the shortfalls. But that's not how it works. One thing this thread ignores is the diversity of how public pension plans operate. The employees contributed 0% in Wisconsin and 11% wherever Davebo is talking about. Some professions lend themselves to spiking (like firefighting and police officers) because of overtime, and some (like teaching) don't. So everyone (including me) who claims to know how it works really only knows how the one they are familiar with works. I don't think it's unfair to expect to receive my pension. Suppose at the end of your career, your company said, "Wait a minute. In retrospect, we really couldn't afford that 401k match we gave you. It was a different management team, and they paid you money we couldn't afford. You need to give it and all the money it has earned back. That way we won't have to raise the price we charge our customers." You'd have no problem with that, right? It would have no effect on your retirement, right?
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gawgagranny
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Post by gawgagranny on Jun 21, 2011 14:54:00 GMT -5
Susanna, love your analogy with the 401K match!
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midjd
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Post by midjd on Jun 21, 2011 14:54:03 GMT -5
This is exactly how I feel, although I'm (hopefully) still at the beginning of my career. It has been understood, at least in my state, that there is a certain trade-off in state employment - lower pay combined with better benefits. We have not had a pay increase since 2007, and our benefits have steadily eroded since then.
I would certainly not be opposed to changing the rules for new employees - even if it means I'm not grandfathered in - but changing them on people who have spent their lives working for half the salary they could have made in the private sector, with the understanding their retirement would be taken care of, just seems unethical.
(And for those saying state workers are superfluous - some may be, but let's see what happens to society once there are no courts, state police, or teachers.)
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dancinmama
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Post by dancinmama on Jun 21, 2011 14:55:30 GMT -5
Well that is the reality. Using your example, what did they contribute? A total of $85K. I mean what do you really expect? It's not just the contributions though, it's the thirty years of compounding interest that you lose by not being able to invest that money over thirty years. I was trying to explain to my wife's super liberal uncle why I'll take my 401k over a pension any day, and he just couldn't grasp the compounding interest part. He kept talking about what a good deal SS, and pensions were, using some weird math where the 401k never makes any return on the money invested. There's also the fact that I don't trust somebody else to manage the pension fund for thirty years without fraking it up somehow. Either raiding the money, investing it in something stupid like mortgage derivatives, or investing in companies due to friendships or something and getting a crappy return or none at all. Not only am I trading a big chunk of my pay for a small defined amount later that inflation will probably kill, but I'm putting my faith in somebody else that won't really be hurt if he screws me, oh, and I get all the headaches with vesting and whatnot. Yeah... no thanks. DarkHonor: You made me wonder what percentage of our 401k balance is from contributions and what percentage was employer match/earnings. I was shocked to find out that our contributions are less than 19.4% of the total balance. That means 80.6% of the balance has been earnings. This has been over a period of not quite 30 years.
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