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Michael74

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Washington Post said:
Even as late as the early 1990s, about 60 percent of full-time workers at medium and large companies had pension coverage, according to the government figures. But today, only about 24 percent of workers at midsize and large companies have pension coverage...

Pensions for the majority are nearly impossible to fund with negative real interest rates. Instead, megacorp is switching to the 401k. Don't even ask about pensions at mini companies.

The trouble with expecting workers to save on their own is that almost half of U.S. families have no such retirement account...

Workers notice that a dollar saved today will not be worth as much in 40 years. Most are not bothering to save anything at all, or only a trivial amount. The median savings of the moderate income group is about $25,000. Social Security is about $1400 per month for them.
 
Companies started getting away from pensions back in the 80's and 90's. It wasn't until are started at my current job that I was even offered a pension alongside a normal 401k.
 
Can't argue with the reality of inflation but im.not a fan of defined benefit plans,why ?if I die in some plans my wife won't get squat.

Yes, that's true. However, at least people had the option to choose to work at a company with a decent pension plan. Attracting good employees was a motivation for companies to offer decent pensions. Nowadays, few even have that option.
 
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Companies started getting away from pensions back in the 80's and 90's. It wasn't until are started at my current job that I was even offered a pension alongside a normal 401k.

In the early 90s, interest rates were lowered to bail out the S&L industry. Then they were lowered in the early 2000s to bail out the mortgages banks originated. This may have bailed out the banks, but it tanked pension plans.

The same below inflation interest rates affect 401k plans.
 
Yes, that's true. However, at least people had to option to choose to work at a company with a decent pension plan. Attracting good employees was a motivation for companies to offer decent pensions. Nowadays, few even have that option.
So the reality of taxes because in order to get quality,they must offer the same .NYC you collect the day you retire till death.imagine a 38 year old collecting that and the amount if taxation needed.same with the market.you assume that the cost is just ate by the company.it's not.a consumer isn't going to easily pay more for a product when he can get the same elsewhere. It's not the employers job to provide jobs but to sell,service etc.! He must keep costs down to do that or face competition!
 
So the reality of taxes because in order to get quality,they must offer the same .NYC you collect the day you retire till death.imagine a 38 year old collecting that and the amount if taxation needed.same with the market.you assume that the cost is just ate by the company.it's not.a consumer isn't going to easily pay more for a product when he can get the same elsewhere. It's not the employers job to provide jobs but to sell,service etc.! He must keep costs down to do that or face competition!

Companies had competition back when they offered pensions too. Something in addition to competition made corporate pensions extinct.

City/state pensions are on the road to extinction too. They don't have the same type of competition that companies do, but bankers are nevertheless confiscating purchasing power from city/state revenue, as well as from city/state pension funds. They use a different accounting system than companies do, which allowed them to pretend their pension funds are fully funded. Pensions have already been trimmed in some cities. Others will follow as bankers confiscate purchasing power from both pension funds, and revenue needed for city services.

Bankers are confiscating purchasing power from 401k plans too, but most employees won't notice until they try to spend their 401k money at retirement.
 
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Companies had competition back when they offered pension too. Something in addition to competition made corporate pensions extinct.

City/state pensions are on the road to extinction too. They don't have the same type of competition that companies do, but bankers are nevertheless confiscating purchasing power from city/state revenue, as well as from city/state pension funds. They use a different accounting system than companies do, which allowed them to pretend their pension funds are fully funded. Pensions have already been trimmed in some cities. Others will follow as bankers confiscate purchasing power from both pension funds, and revenue needed for city services.

Bankers are confiscating purchasing power from 401k plans too, but most employees won't notice until they try to spend their 401k money at retirement.
That's funny i.have a trust fund,it's gained money and 401a,457k,401a and Roth ira are invested In stocks ,high risk or low risk and mixed depending on the age of the person recieving it.

My trust fund unless I die or a major crash occurs to be worse then Obama's economy will beat my ss check.I collect nearly a third of your example already monthly from it.mostly from interest !
 
European pension plans are in a situation. -2% nominal interest means -5% real. This means a dollar saved now for a new employee will equal about 12 cents in 40 years. A company has to save $12.78 today so that there will be $1 in the pension fund for them after 40 years.
 
That's funny i.have a trust fund,it's gained money and 401a,457k,401a and Roth ira are invested In stocks ,high risk or low risk and mixed depending on the age of the person recieving it.

My trust fund unless I die or a major crash occurs to be worse then Obama's economy will beat my ss check.I collect nearly a third of your example already monthly from it.mostly from interest !

Stocks are in a mania now. Those never last. I'm sure you are aware that most people don't have trust funds. Just their median $25,000 in a 401k to get them through a 30 year retirement.
 
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Stocks are in a mania now. Those never last. I'm sure you are aware that most people don't have trust funds.
I lost only once in trust funds in the 7 years it has been distributing anf it's old been started since I was 44 years ago.

It's not invested in only risky things.utilities, oil companies, and grocers aren't high risk !it's also invested in car makers gmc is one !

The stock market has crashed,rose a ton in my life time .that's a point you fail to see.

If the.market crashed as in 1929 your expectations are that the gov't would have the money to pay .where would it get it? Bonds are low risk ,aND while a crash will affect them ,you can't fund the now on them!
 
I lost only once in trust funds in the 7 years it has been distributing anf it's old been started since I was 44 years ago.

I've been in the stock market a lot longer. Decades. The market goes up in a roller coaster fashion. Not the point though. Long run market return is correlated with valuation. Currently the market is super valued compared to historic norms. This is the third mania in 2 decades. The first was the 90s tech mania, caused by bankers bailing out the S&L industry. Then there was the 2000s housing mania, caused by bankers bailing banks out of Y2K. Now the current mania caused by bankers bailing banks out of the housing mania deleveraging. Note how bankers bought lots of mortgage backed securities this time around (QE).

The main point is that the market is super valued now. This has always led to future returns being sup par. The mania has put all of the profits in recent years.

Since research indicates that the majority doesn't outperform the balanced 60/40 index fund, this means the majority's future return is likely to lag inflation. For both bonds and stocks. At least for the next decade or so. If the median 401k only has a balance of $25,000 neither balanced index returns or 100% stock returns are likely to turn that into something reasonable. Both bonds and stocks are currently super valued.

Japan's stock mania peaked around 1990. Japanese retirees are still waiting for the Nikkei to return to peak levels.
 
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I've been in the stock market a lot longer. Decades. The market goes up in a roller coaster fashion. Not the point though. Long run market return is correlated with valuation. Currently the market is super valued compared to historic norms. This is the third mania in 2 decades. The first was the 90s tech mania, caused by bankers bailing out the S&L industry. Then there was the 2000s housing mania, caused by bankers bailing banks out of Y2K. Now the current mania caused by bankers bailing banks out of the housing mania deleveraging. Note how bankers bought lots of mortgage backed securities this time around (QE).

The main point is that the market is super valued now. This has always led to future returns being sup par. The mania has put all of the profits in recent years.

Since research indicates that the majority doesn't outperform the balanced 60/40 index fund, this means future return is likely to lag inflation. For both bonds and stocks. At least for the next decade or so. If the median 401k only has a balance of $25,000 neither balanced index returns or 100% stock returns are likely to turn that into something reasonable. Both bonds and stock are currently super valued.

Japan's stock mania peaked around 1990. Japanese retirees are still waiting for the Nikkei to return to peak levels.
The point was ,you.missed.in the 70s,pre Nixon change from the gold stabdard ,this trust fund was started and on a quarter of what it is.how many utilities go out of business?

If the 401k did what the feds,state does its a crime!the state only has to pay the retirees ,it requires that a non govt pension be fully funded.plenty of state pensions aren't even a half funded.you can't fund aND pay out at the same time .it's unreasonable to expect 60 a month pay in aND a match of it a most to pay out at 1500 a month! Not even ss does that.

You are expecting bonds even on.the gold standard to fund forever. I use forever as see my nyc example.a man retires in his late 30s and dies at 90.he will have to be replaced aND his replacement all the while wages go up.and taxes to pay!
 
The point was ,you.missed.in the 70s,pre Nixon change from the gold stabdard ,this trust fund was started and on a quarter of what it is.how many utilities go out of business?

Oh the 80s and 90s were a fabulous time to be in stocks. Valuation during the early 80s made stocks a good deal. Because of good valuation in the early 80s, the US stock market had its best bull market in history. Anyone with a 401k invested in stocks back then did really well. Youngsters today are in the opposite situation. The market is super valued, and is thus unlikely to return much going forward.

...plenty of state pensions aren't even a half funded...

This is true, and they are going backward instead of forward.

You are expecting bonds even on.the gold standard to fund forever.

With an honest dollar, bonds earn a real return. This makes calculating pension funds possible. With capricious inflation, its impossible for a company to calculate pensions. Thus most private companies abandoned them. There is no way to reliably calculate what a dollar will be worth in 40 years, so companies have no way to figure out how much to put in the plans to fund them. Its all just a guessing game. Companies were betting the company on guessing future inflation rates. They said no more.
 
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Oh the 80s and 90s were a fabulous time to be in stocks. Valuation during the early 80s made stocks a good deal. Because of good valuation in the early 80s, the US stock market had its best bull market in history. Anyone with a 401k invested in stocks back then did really well. Youngsters today are in the opposite situation. The market is super valued, and is thus unlikely to return much going forward.



This is true, and they are going backward instead of forward.



With an honest dollar, bonds earn a real return. This makes calculating pension funds possible. With capricious inflation, its impossible for a company to calculate pensions. Thus most private companies abandoned them. There is no way to guess what a dollar will be worth in 40 years, so companies have no way to figure out how much to put in the plans to fund them. Its all just a guessing game.
You ignored the law.they could have simply.pay as you.go.if allowed to im.not for legalized ponzi schemes. We can't promise money tommorow. I may die ,I can only do so much. The pensions of the gov't were never fully funded it's a guessing game it's growing by x percent each year aND some cases the gov't NEVER put money on bonds to ensure the pension. Would be there.the idea of simply retiring aND doing nothing tI'll death will ensure you won't live long.my mother has a pension who pays more then I make after taxes,and other things are taken.

You like defined benefit plans I dont,I have my reasons.these are:
1) while my plan didn't others do keep the money upon death
2) in order to fund it now a trust fund is set up and if we kept it more taxes,Higher Utility rates would have to occur
3) it's telling when the finance director advises against joining the pension plan
4) some are better at saving then the trustees and saved enough to beat the plan!
5) if a town goes bankrupt or other who will ensure its there if the court allows it?

6) pay as you go allows you to rob Peter to pay paul.and the market can't do that so they had to let it go.
 
4) some are better at saving then the trustees and saved enough to beat the plan!

Yes, this is true for a few. Not for the majority though. The majority are better off with a pension plan.

5) if a town goes bankrupt or other who will ensure its there if the court allows it?

No one insures it. Some city pensions have been trimmed because of this. If there is not enough money in the pension fund to fully fund the pensions, they are not guaranteed. With honest money, its possible to calculate exactly how much should be in the plan. With capricious inflation, anyone can guess any amount.
 
Your Investorpedia Link said:
Due to the complexities associated with estimating DB plan liabilities, it's difficult for corporate executives to budget for retirement benefit expenditures.

Yes, exactly. Companies have no way to calculate future inflation rates, so they can't calculate how much to put in a pension fund.
 
By the way, this is not just a USA situation. It exists in myriad countries that have inflation:

John Mauldin said:
The WEF study shows that the United Kingdom presently has a $4 trillion retirement savings shortfall, which is projected to rise 4% a year and reach $33 trillion by 2050. This in a country whose total GDP is $3 trillion. That means the shortfall is already bigger than the entire economy...

Bankers are confiscating the majority's future with inflation.
 
Yes, exactly. Companies have no way to calculate future inflation rates, so they can't calculate how much to put in a pension fund.
Neither do cities. I can divorce ,become a widower ,remarry ,work until I die.I know of a boss ,and he worked from 1966 to 2006.he was maxed out on contributions as its built that way .1.6 percent per year up to 25 aND at 25 it's .05 percent until retirement.

He isn't alone ,several are still here.
 
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