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Old 11-12-2014, 08:47 PM   #21
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Originally Posted by LoneAspen View Post
That's what I'm planning to do (although I'm only 47 right now).

I know SS has always paid out, they say funds are available to pay out in future, blah, blah, blah, lies, damn lies, and statistics...

But I don't care, as I've never had much faith in SS. After being forced to put MY money (not the government's money...MY money) into the program for 30+ years, I want to start getting MY money back as soon as I can get my grubby hands on it.
I do know the idea of social security not paying out has been around since the 1960s. I recall my mother saying at the time that she did not expect to get her social security. Of course she got it for 19 years. So at least some folks have felt that SS is at least a bit of a ponzi scheme since the system started paying out.
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Old 11-12-2014, 10:07 PM   #22
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...........snip..........

I was in NIKE HR when they instituted their 401k. Many of their employees were in their 20s at the time. It was like pulling teeth to get them to participate and the match was in NIKE stock. Basically they were just starting out, often newly married or with babies at home, and felt they needed every dime each paycheck. My secretary didn't want to do that because she wanted all her earnings for her upcoming wedding. Arahh!!
A little off topic , but the money spent on weddings for young couples starting out could be a whole chapter in a stupid money decisions book,. Mid 5 figures or more spent , instead of a nice down payment on a house
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Old 11-13-2014, 01:13 AM   #23
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My company matches 100% up to 2% of your pay. Better than nothing I suppose. I'm lucky at the moment to be able to contribute 18% of my pay.

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Old 11-13-2014, 05:50 AM   #24
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It's not as if they're rocket scientists or anything . . . Oh, wait . . . .
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Old 11-13-2014, 06:41 AM   #25
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It will look like the 1930's. Not good.

But the generation behind them, having seen the results of not planning ahead and saving, will do quite nicely.
And from what I have seen with our kids/nieces/nephews who are in their 20s today, that may be the generation that figures it out. DD, DS and nephew are all prodigious savers and I'm not sure why.
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Old 11-13-2014, 06:52 AM   #26
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The company my son just start working at defaults your 401k to 3% when you start, and then increases 1% per year until you reach 10%. They match 100% on the first 6%. The default fund they put you in is one of the Vanguard age based fund. (the one that most closely matches your normal full retirement date)
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Old 11-13-2014, 06:53 AM   #27
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...Resentment can cause all sorts of self-destructive behavior, including refusing to allow an employer to give you money even though doing so only benefits the employer.
+1 These employees are leaving money on the table but would be the first ones to complain about their pay and benefits and how big, bad corporations screw people over.

Yesterday I was having lunch with a friend and learned that an acquaintance of ours doesn't have health insurance because he can't "afford" the $150/month it would cost (he makes good money and can well afford $150/month - he is just cheap). If he has to go to the hospital and ends up with a big bill because he doesn't have health insurance, he'll probably be the first one to complain about how screwed up the health care system is. You can't fix stoopid I guess.
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Old 11-13-2014, 06:56 AM   #28
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The company my son just start working at defaults your 401k to 3% when you start, and then increases 1% per year until you reach 10%. They match 100% on the first 6%. The default fund they put you in is one of the Vanguard age based fund. (the one that most closely matches your normal full retirement date)
Every employer should have something like this. You have the freedom to opt-out if you wish, but the default is to contribute. For many people starting out the only way to save is to avoid the money getting into your hands/bank account. I was that way in my 20s but realized it and responded accordingly.
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Old 11-13-2014, 07:07 AM   #29
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Every employer should have something like this. You have the freedom to opt-out if you wish, but the default is to contribute. For many people starting out the only way to save is to avoid the money getting into your hands/bank account. I was that way in my 20s but realized it and responded accordingly.
I agree. How many would opt in to SS if it was a free choice? And how many would be sleeping under bridges in their golden years?
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Old 11-13-2014, 07:37 AM   #30
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You can't fix stoopid I guess.
I agree. I worked for a company that was a class act when it came to its 401(k). They'd terminated the DB plan before they acquired us but in addition to a 100% match on the first 6% they gave those of us not in the DB plan an additional 6%, which was deposited every April. You got that even if you didn't participate in the 401(k).

A coworker used to take that amount out as soon as he got it and spend it, even though he knew he had to pay ridiculous taxes. And he was an actuary. Of course, he and his wife lived on a hobby farm that was a money sump and they kept buying animals such as miniature horses and ornamental Chinese hens- not good for meat, breeding or much of anything else to earn their keep.
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Old 11-13-2014, 07:44 AM   #31
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I believe the consumer protection law that passed a few years ago requires the "default" to be a 3% contribution. New employees can opt out or increase it.... but the default is to enroll at 3%. This attempts to "fix stupid".

A friend/former coworker said her boss pressured her to enroll at 6% to get the match, when she hired on. She was grumpy about it but didn't want to piss off the new boss. She is something of a shopaholic, so this action by her boss helped save her from herself. My opinion of her boss went up several notches when she told me that story. Despite being an engineer - she was very ignorant about finances and money.
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Old 11-13-2014, 08:40 AM   #32
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Looking back, my excuses for not contributing into the old McDonnell Douglas 401k were pretty lame. Even though it only matched up to 1% of my salary, that was better than nothing.

I got hired by them in the fall of 1992, part time, while still in college. Part timers weren't eligible for the 401k. I went full time in February 1994, but held off on the 401k. Here's a few of the reasons, from my mindset of the time
1) the 1% match isn't worth it
2) I'm only 24, I have PLENTY of time to save for retirement!
3) I'm also getting a pension
4) I want to save up for a house
5) I'm already investing in after tax stuff
6) I want easier access to my money if I need it
7) I'm in a low tax bracket, so it's not saving me much on my taxes

I did finally start contributing to the 401k in December, 1997. By that time, we were with Boeing, but still on the 1% match plan.

So maybe, in the overall scheme of things, I didn't lose out on *too* much. Roughly 3 years and 9 months of saving, matching, and compounding. I only made about $22,000 per year when they put me full time, so I probably wouldn't have been able to put in much...maybe just enough to get the full match.

One thing I do remember losing out on, though, is that McDonnell-Douglas stock did really well in that timeframe. I forget what it was going for by the time I was full time, but in 1992-93 I remember it being around $20-25 per share. During the time I was a full time employee, it did a 3:1 split, then a 2:1 split, and then a 1.3:1 split when it converted to Boeing stock. And Boeing was going for around $57 per share when we converted.
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Old 11-13-2014, 09:49 AM   #33
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I believe the consumer protection law that passed a few years ago requires the "default" to be a 3% contribution. New employees can opt out or increase it.... but the default is to enroll at 3%. This attempts to "fix stupid".

A friend/former coworker said her boss pressured her to enroll at 6% to get the match, when she hired on. She was grumpy about it but didn't want to piss off the new boss. She is something of a shopaholic, so this action by her boss helped save her from herself. My opinion of her boss went up several notches when she told me that story. Despite being an engineer - she was very ignorant about finances and money.


I am not sure, but I think that it allowed the default of 3% but did not require it....
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Old 11-13-2014, 10:00 AM   #34
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I do know the idea of social security not paying out has been around since the 1960s. I recall my mother saying at the time that she did not expect to get her social security. Of course she got it for 19 years. So at least some folks have felt that SS is at least a bit of a ponzi scheme since the system started paying out.
I remember my father getting SS early in case they decided to stop paying it. As a younger person, I suspected SS would be reduced or eliminated for my generation. I was partially correct as my full retirement age was raised to 66. But, overall, I am getting what one could have expected.

I think today's younger folks will probably see more SS cutbacks in the form of raising the full retirement age again. Given the increased life spans, this seems reasonable if we protect people from age discrimination.

And, I expect that many people (like many here) will see some increased taxation of SS benefits. The tax limits are not indexed to inflation, so...... it's already happening.



IIRC, former Senator Simpson who was on a SS reform group, said that simply raising the full retirement age by two years over about a 20 year period would fix SS.
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Old 11-13-2014, 12:43 PM   #35
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Company I work for max match is 2% on 4%. I max ($17.5k), 31% of my salary. Always amazed the people that don't take the company match but have plenty of money to burn (toys, trips, extravagances, etc). This is the second year I maxed and plan on doing so until early retirement, currently age 31.
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Old 11-13-2014, 01:03 PM   #36
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Given the choice, best place to place that part of the earnings?

American Household Credit Card Debt Statistics: 2014 - NerdWallet Credit Card Blog

Quote:
U.S. household consumer debt profile:

Average credit card debt: $15,593
Average mortgage debt: $153,184
Average student loan debt: $32,511
Current avg APR:
credit card 13.02%
mortgage 4.01%
student loan 4.66%

Also... how to balance the saving dollars from the later, highest earning years with the needs during the young working years.

Memories....
$220/month as a 2nd Lt. with wife and new baby... She dropped a bottle of milk, and cried.. Not a time of life to put away 7% of pay.
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Old 11-13-2014, 01:31 PM   #37
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In my early years I was pretty much living paycheck to paycheck but I still could not understand why anyone would not participate in our comapnies 401k program the way it was structured. If I remember correctly, the first mega corp I worked for matched 50% up to the legal limts, the second company I worked for matched 100% to the legal limits. And in both companies the employees were "well compensated professionals". (no disrespect, but these were not fast food places) I find it hard to believe that "many of them" could not afford to at least contribute enough to get the matching funds. I think most did participate but I know of many that did not. I'm well over a million dollars richer today because of 401k's. It's money that I really didn't miss contributing once I got started and that I would have probably just blown over the years had the plan not been there.
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Old 11-13-2014, 01:46 PM   #38
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I currently work for a company that matches 100% up to 15% of my pay. It took me three years to get to the ability to save 15% of my check due to being the sole bread winner with a spouse and three teenagers in the house. But now that I am able to max it out, I love it!
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Old 11-13-2014, 01:46 PM   #39
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Late 60's participated to the max - when the 'last person leaving Seattle' layoff came - the Credit Union got first crack at my account(without informing me, no option). I got a paid up Sports car and $98 bucks.

heh heh heh - resentment! Resentment? I still chuckle that my pension check comes from their main US competitor. . I maxed their 401k although not as good BUT Bogle's Folly was the big dog. All praise to index and ER.
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Old 11-13-2014, 02:38 PM   #40
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For many of these employees, they put in 8% but it only takes 5% out of their take home pay due to tax savings. Then they get matched the 6%. The total amount saved is 14% of gross at a cost of 5% of take home pay. That's almost a 200% immediate return on investment. I'd sell plasma to get that kind of return.
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