Another pension plan bites the dust

[KB]

http://money.cnn.com/2016/05/20/retirement/central-states-pension-fund/

Unfortunately pension plans everywhere will experience this and many already have. Low interest rates have been the straw that breaks the camels back as returns are at their lowest yet retiring boomers are growing in number.

Had these retirees conributed to a 401k they might have something left since they could manage their investment options if they wanted, plus they could see their individual balances and identify if retirement was feasible.

 

[mu11et]

The moral to dah story don't leave other people in charge of your retirement.

 

[shabby]

 

[Ackmed]

http://money.cnn.com/2016/05/20/retirement/central-states-pension-fund/

Unfortunately pension plans everywhere will experience this and many already have. Low interest rates have been the straw that breaks the camels back as returns are at their lowest yet retiring boomers are growing in number.

Had these retirees conributed to a 401k they might have something left since they could manage their investment options if they wanted, plus they could see their individual balances and identify if retirement was feasible.

Fortunately my job has a pension system and 401K, both of which are pretty good. We also have a union though. Since it's federal the pension should still be there when I am ready for it, but who knows anymore. They are going away though, after August this year no more pension for new highers, just the 401K.

 

[Sonikku]

Once private pensions have finished going the way of the dodo and social security is allowed to fail Americans can look forward to working til they drop.

 

[swamplizard]

Greetings,

According to the WSJ, the Feds will likely increase interest rates in June of this year. The likelihood is about 50%.

 

[cubby1223]

Greetings,

According to the WSJ, the Feds will likely increase interest rates in June of this year. The likelihood is about 50%.

The Feds have been saying they'll increase interest rates for the past like 5 years. I'd put the likelihood of this summer at a much lower percent.

 

[Vic]

Once private pensions have finished going the way of the dodo and social security is allowed to fail Americans can look forward to working til they drop.

The Trump crowd is eagerly looking forward to building that wall by pilfering the Social Security Trust Fund (because we all know Mexico isn't going to pay for it). And if you point out that you've worked all your life and paid hundreds of thousands of dollars into Social Security, they'll just accuse you of wanting free stuff.

 

[echo4747]

The Feds have been saying they'll increase interest rates for the past like 5 years. I'd put the likelihood of this summer at a much lower percent.

I tend to agree with you ... I'd put the likelihood at around 25%. btw: Isn't the UK sched to vote on leaving the EU in June? Don't know if the Feds will chance roiling the markets even more.

 

[Jeff7]

I wonder how many high-level executives will have their pensions cut like this.


Sweet deal for the employers though: Offer a future benefit as a job perk that you can then eliminate later on to save money.

 

[Moonbeam]

It is the right of the people to alter or abolish government and institute new government as they see fit. But if they can knock us off one at a time, the frogs will boil.

 

[WelshBloke]

Isn't the UK sched to vote on leaving the EU in June?

Yep. Could go either way as well! 😱

 

[BxgJ]

Fortunately my job has a pension system and 401K, both of which are pretty good. We also have a union though. Since it's federal the pension should still be there when I am ready for it, but who knows anymore. They are going away though, after August this year no more pension for new highers, just the 401K.

We have (or really, had) both where I work too. Some years ago they converted the pension from defined benefit to defined contribution. The older guys nearer to retirement get the old one, younger people like me basically get 5% of pay extra into an account. It's not like the old pension, but better than nothing. The 401k is pretty good though, that and my other investments are where most of my retirement will come from.

 

[hal2kilo]

Once private pensions have finished going the way of the dodo and social security is allowed to fail Americans can look forward to working til they drop.

That seems to be the plan.

Haven't had a defined benefit plan since it was killed in 1983. Watched my 401k shrink in the Great Recession and am currently watching it shrink or go nowhere 3 to 4 years before I retire again.
We've all been scammed.

 

[michal1980]

The Trump crowd is eagerly looking forward to building that wall by pilfering the Social Security Trust Fund (because we all know Mexico isn't going to pay for it). And if you point out that you've worked all your life and paid hundreds of thousands of dollars into Social Security, they'll just accuse you of wanting free stuff.

that trust fund is already full of IOUs.

 

[fskimospy]

The Feds have been saying they'll increase interest rates for the past like 5 years. I'd put the likelihood of this summer at a much lower percent.

The fed increased rates earlier this year.

Increasing rates is probably a dumb idea, but the fed is doing it.

 

[1prophet]

The Trump crowd is eagerly looking forward to building that wall by pilfering the Social Security Trust Fund (because we all know Mexico isn't going to pay for it). And if you point out that you've worked all your life and paid hundreds of thousands of dollars into Social Security, they'll just accuse you of wanting free stuff.

Kind of hard to pilfer IOU's

http://www.heritage.org/research/re...w-the-social-security-trust-fund-really-works

Why the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only "invested" in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. As the Congressional Research Service noted in a report on May 5, 1998:

When the government issues a bond to one of its own accounts, it hasn't purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another.​

According to the Office of Management and Budget under the Clinton Administration in 1999:

These [trust fund] balances are available to finance future benefit payments and other trust fund expenditures--but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. [Emphasis added.]​

In short, the Social Security trust fund is really only an accounting mechanism. The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs. For that reason, the most important date for Social Security is 2018, when taxpayers must begin to repay the IOUs, not 2042, when the trust fund is exhausted.

 

[Brian Stirling]

Once private pensions have finished going the way of the dodo and social security is allowed to fail Americans can look forward to working til they drop.

Hey, Wall Street is way ahead of you ... there was a bunch of stories a few years back from WS types that implied it was your duty as Americans to work until at least 70. The longer you delay retirement the less they pay out for SS and with life expectancy on the decline it's just a mater of time before working types routinely die on the job. They might have to come up with a new recycling/trash bin for that...


Brian

 

[Mai72]

This is what happens when you let other people control your retirement. I don't get Americans. I've been saving money for about 8 years now. My parents didn't teach my sh*t about money, but I read and I research.

1) I save 10% of my income every year. This is going up to 15% next year. This is my emergency money. I have about $15k.

2) Compound interest is your friend. You have to start young though.

3) 401ks are bullshit. Yep, you heard me. The 401k was one of the biggest scams perpetrated on the middle class! THE WEALTHY DON'T HAVE 401ks!

4) Control= Income! You don't even have control of your own damn money when you put it into a 401k. Why would I want to give some bozo my money that I can't even get too for the next 30 years?

5) Take on more streams of income. I have 2 streams and I'm currently working on #3. Most people have money issues because they don't make enough income.

6) Park as much money to the side so you can invest in the future. I'm doing this now. It's not because my goal is to invest in stocks. Nope, it's multi-family apartments.

7) Invest in real estate. If you look at many of the big players today you'll notice that they've made huge investments in real estate. My goal is to have multi-family apartments. The more doors the better. I want an investment that I can touch and feel. Tax breaks are incredible as well.

 

[TeeJay1952]

UAW retired 14 years.
I have healthcare and a stipend from company. What is most folks want?

 

[brianmanahan]

3) 401ks are bulls**t. Yep, you heard me. The 401k was one of the biggest scams perpetrated on the middle class! THE WEALTHY DON'T HAVE 401ks!

no they're not. my 401k has index funds, super-low ERs and maxing my contributions takes me down a tax bracket.

the reason the super-wealthy don't use them is because the 18$k limit is too low.

4) Control= Income! You don't even have control of your own d*** money when you put it into a 401k. Why would I want to give some bozo my money that I can't even get too for the next 30 years?

72t and roth ira conversion ladders make it possible, provided you have switched jobs.

7) Invest in real estate. If you look at many of the big players today you'll notice that they've made huge investments in real estate. My goal is to have multi-family apartments. The more doors the better. I want an investment that I can touch and feel. Tax breaks are incredible as well.

no thanks, too much work for me. i stick to side businesses that are more passive.

i'm not saying real estate isn't a way to save for retirement. it's a good way if you're good at it, though it has some unique risks.

but it certainly isn't the only way.

 

[KB]

This is what happens when you let other people control your retirement. I don't get Americans. I've been saving money for about 8 years now. My parents didn't teach my sh*t about money, but I read and I research.


3) 401ks are bullshit. Yep, you heard me. The 401k was one of the biggest scams perpetrated on the middle class! THE WEALTHY DON'T HAVE 401ks!

Of course the wealthy dont have 401ks. The max tax deferral limit is 18000/year which is nothing to them. Not to mention the wealthy tend to be business owners and thus dont receive the 401k match. I still think its a good program for the middle class if you get that match and the tax deferral. I like your other points though.

https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-qualification-requirements

 

[swamplizard]

This is what happens when you let other people control your retirement. I don't get Americans. I've been saving money for about 8 years now. My parents didn't teach my sh*t about money, but I read and I research.

1) I save 10% of my income every year. This is going up to 15% next year. This is my emergency money. I have about $15k.

2) Compound interest is your friend. You have to start young though.

3) 401ks are bullshit. Yep, you heard me. The 401k was one of the biggest scams perpetrated on the middle class! THE WEALTHY DON'T HAVE 401ks!

4) Control= Income! You don't even have control of your own damn money when you put it into a 401k. Why would I want to give some bozo my money that I can't even get too for the next 30 years?

5) Take on more streams of income. I have 2 streams and I'm currently working on #3. Most people have money issues because they don't make enough income.

6) Park as much money to the side so you can invest in the future. I'm doing this now. It's not because my goal is to invest in stocks. Nope, it's multi-family apartments.

7) Invest in real estate. If you look at many of the big players today you'll notice that they've made huge investments in real estate. My goal is to have multi-family apartments. The more doors the better. I want an investment that I can touch and feel. Tax breaks are incredible as well.

Hi Mai72,

That is how I have lived and survived, except that I invested in single-family homes and have gradually sold them, taking advantage of the "capital gains tax breaks." I still have 2 that supply me with income an IRA that allows me to take as I please and is not subject to another's control. I have constantly moved my IRA to the best paying interest rate over the years and continue to shop around. I had 3 businesses, and have sold 2, one on contract which pays me gains plus interest. I still own a corporation which is just a shell for another gain plus interest, having bought my partner out. I live comfortably but not extravagantly. My home is paid for and I drive a car which I financed at 1.5% which is considerably less than the interest that I receive from my investments. My available COH (not including the IRA) will get me through at least two years in the event of my investments failing, said cash also drawing interest. The total cost of my investments is less than $200 per year, and my IRA is fee free.

You've got the right idea, but never turn down a quick buck. I once bought a house and sold it the same day for a nice profit.

 

[brianmanahan]

That seems to be the plan.

Haven't had a defined benefit plan since it was killed in 1983. Watched my 401k shrink in the Great Recession and am currently watching it shrink or go nowhere 3 to 4 years before I retire again.
We've all been scammed.

well, 1980 to 2000 were just about the best stock returns we've seen before.

 

[KB]

UAW retired 14 years.
I have healthcare and a stipend from company. What is most folks want?

Did you work for Ford or GM?
Ford and GM have large pension obligations with the exact same problems all pensions do. In fact they are trying to buyout pensions to eliminate them because they know they cant afford to manage them forever. Luckily car sales are good right now, but if car sales fall to 2009 levels again, auto companies and their pensions will be in a pickle.

"
At the end of 2011, the gross pension liabilities of both GM and Ford rose to record levels, Citi analyst Itay Michaeli said. Ford finished 2011 with a global pension obligation of $74 billion, nearly double the company's $40 billion stock market value.
Ford's global pension plan was underfunded by $15.4 billion as of end 2011. This shortfall, which widens and contracts based on asset returns and interest rates, is typically viewed as debt by credit ratings agencies."

http://en.terra.com/news/news/exclusive_ford_readies_first_set_of_landmark_pension_buyouts/act481007