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The 401K Drives Inequality: NY Times article.
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Anonymous
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Gift article link:
https://www.nytimes.com/2024/05/08/magazine/401k-retirement-crisis.html?unlocked_article_code=1.qk0.FoXn.AmNofORfld_i&smid=url-share The evidence seems clear. My family has won in this scenario as have many of those who post here. We have a federal pension along with a 401K that's been maxed out for over a decade, and was well-funded before that. But, overall, for our society taking away pensions and making people save for retirement as a replacement seems to have been a poor plan. People don't plan or save for the future. Some can't, others just don't have the desire to, many others are living paycheck to paycheck whether because of low wages or poor planning. We should never have left pensions behind. |
Anonymous
So you want to work for One Company your whole life, and take a chance that they have funded the pension well, invested it well, won't bankrupt it, won't act fraudulently..... as opposed to being responsible for your own life, your career choices, work for one company, do a side gig to earn more when you are young, learn about investments, the market, and be responsible and accountable for your own retirement? Mmmk. |
Anonymous
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"We" should never have left pensions behind?
Who is "We"? Pensions were dropped because they were financially impossible. How are you going to compel "We" to go bankrupt funding (or failing to fund) pension obligations? |
Anonymous
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Social security is essentially a federal pension for all, the problem is that US culture doesn't support increasing contributions (in the form of taxes) in order to increase payouts, plus there are generational issues with this based on baby booms/busts.
But if you really wanted to make pensions universal, that's how you'd do it. Not by requiring or encouraging companies to provide them (as a PP noted, pensions can be very restrictive in terms of your career and you have to trust the company/government entity to actually fund it) but by making SS more robust so that people were essentially forced to save for their own retirement. |
Anonymous
When pensions were first implemented, half of men didn't even live to retirement age. The other half statistically were only likely to live a few years. A decades-long retirement is a brand new concept and mathematically impossible to fund. That's why Illinois is broke. |
Anonymous
+1 |
Anonymous
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Seems like the beginning of a new indoctrination attempt among the progressive left - subtly attacking 401ks to set up the justification for crippling them through much higher taxes down the road.
Anyway, I know the NYT well enough to do the opposite of what they tell you to do. |
Anonymous
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Switzerland is pretty cool when it comes to pensions. Companies MUST offer pensions, but the payout is based on how much the employee has contributed toward the pension and the principal + investments are managed by financial institutions/insurers/pension companies to ensure solvency. Essentially, the management of the pension is farmed out to 3rd parties who take on liability of ensuring pension payouts, rather than the employing company.
Good explanation here on the pension "pillars" in Switzerland: https://www.ch.ch/en/retirement/retirement-income/#further-information-and-useful-contacts 1st Pillar (state pension, akin to Social Security in the US): employee pays 4.35% of salary, employer pays 4.35%. Must pay into every year from age 20 to age 65 to get unreduced pension. 2nd Pillar (defined contribution & benefit company-provided pension): pension is based on amount contributed by employee and employer (split equally) during employment. Pension is paid annually at age 65 at minimum rate of 6.8% of final contribution balance until death. Spouse fully inherits pension, assuming conditions are met. 3rd pillar (optional supplementary pensions akin to 401K, Roth IRA, etc): two types of pensions available - 3.A. pension (max contribution of 7K per year, contributions are tax deductible, taxed upon withdrawal) and 3.B pension (no max contribution, no tax deduction, but no taxes levied when withdrawn near retirement). All of this is managed by professional pension providers, so generally it's idiot-proof and in high-quality investments. The issue with 401Ks is that it relies on the employee to take actions and make smart investments. People lose money all the time by buying inflated stocks, chasing returns, selling at market bottom & locking in losses, etc. Private pensions should be much more prevalent in the U.S. |
Anonymous
Vast majority of Americans are not intelligent enough to save for and invest in their retirement. Even very smart people get decision paralysis when it comes to investing. I had an extremely smart boss in the federal government who was 100% invested in G fund in the TSP after 15 years in gov't. Why? Because they were (irrationally) afraid of losing money. During the big market drop in 2020, I convinced them to convert half their G funds into C funds. Best decision ever. And that's a person with an undergrad degree from an Ivy and a JD from the T5 law school. Most Americans really just need a more robust pension system. Let the investment professionals and actuaries manage it. |
Anonymous
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I'd rather not read what progressive think since they always want to abolish a system because the MC/UMC use it. Recently (before Biden) they tried to do away with PSLF student loan forgiveness because of doctors and lawyers apparently using it.
Anyways, I think the only options would be to up the scale of social security or create one of those sovereign funds like some Gulf countries have to supplement retirements. |
Anonymous
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Here it comes.
Socialist and borderline communist Dems will be coming after your 401ks soon all in the name of 'equity'. Let's completely ignore how punishing it will be for savers who CHOSE out of self discipline to forgo consumption their entire lives in order to save more in their 401ks. This will reward all of the morons in life who bought multiple cars with payments over $1000 per month, who bought homes much bigger than tbeh could afford, and who had too many kids that they couldn't afford. Once dems go down this communist path I will liquidate my entire savings and move the hell out. So sick and tired of Dem entitlement mentality that punishes everyone who is responsible and saves. |
Anonymous
And this is why the Swiss hardly ever invent anything. Try working for a global corporation with sites in Europe. Europe overall is an absolute laughing stock of productivity. They take half the year off and are constantly a PITA to work with because they can never attend meetings since they're always on vacation and barely meet quality standards for output. That's why salaries in Europe are trash and their economy barely grows. Europe is a de facto nanny state where nobody works and yet they all expect some other entity to provide. |
Anonymous
Yes, there is a bell curve of intelligence. So we have to blow up the entire concept of 401ks and tax the hell out of it in the future because part of the bellcurve is stupid and all in the name of equity. Typical Dem logic. Contently lowering the bar for all. We will all be equal and achieve equity when we are all mediocre and living like crap. |
Anonymous
Yes, shares of a sovereign wealth fund for all from birth is a MUCH better idea than all of this communist crap of taxing more in the name of equity. Hell, even Alaska has a sovereign wealth fund for its residents. Norway has a sovereign wealth fund for its citizens. A sovereign wealth fund that pays out regularly would give ALL an equal and vested interest in the economy of the country. Much, much better idea. |
Anonymous
| Pensions are great until the company goes out of business and leaves behind unfunded obligations. We have social security to keep people from starving to death, if you want a nice retirement you need to have some discipline and save for it. |