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11-12-2014, 07:47 PM
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#21
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by LoneAspen
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.
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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.
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11-12-2014, 09:07 PM
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#22
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 2,223
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Quote:
Originally Posted by Brat
...........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!!
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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
__________________
" A person is smart, but People are dumb, dangerous, panicky animals, and you know it " Agent "K", Men in Black
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11-13-2014, 12:13 AM
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#23
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Dryer sheet wannabe
Join Date: Nov 2014
Location: Nashville
Posts: 13
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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.
Sent from my SCH-I535 using Early Retirement Forum mobile app
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11-13-2014, 04:50 AM
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#24
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Administrator
Join Date: Apr 2006
Posts: 23,041
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It's not as if they're rocket scientists or anything . . . Oh, wait . . . .
__________________
Living an analog life in the Digital Age.
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11-13-2014, 05:41 AM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by Walt34
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.
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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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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11-13-2014, 05:52 AM
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#26
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Recycles dryer sheets
Join Date: May 2013
Posts: 307
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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)
__________________
Retired Jan 2014 at 48.
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11-13-2014, 05:53 AM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by REWahoo
...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.
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+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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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11-13-2014, 05:56 AM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by gozer
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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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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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11-13-2014, 06:07 AM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by pb4uski
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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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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11-13-2014, 06:37 AM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,373
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Quote:
Originally Posted by pb4uski
You can't fix stoopid I guess.
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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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11-13-2014, 06:44 AM
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#31
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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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.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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11-13-2014, 07:40 AM
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#32
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Location: Crownsville
Posts: 3,746
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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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11-13-2014, 08:49 AM
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#33
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
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Quote:
Originally Posted by rodi
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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I am not sure, but I think that it allowed the default of 3% but did not require it....
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11-13-2014, 09:00 AM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,266
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Quote:
Originally Posted by meierlde
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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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.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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11-13-2014, 11:43 AM
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#35
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Recycles dryer sheets
Join Date: Oct 2013
Posts: 55
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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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11-13-2014, 12:03 PM
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#36
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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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
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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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11-13-2014, 12:31 PM
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#37
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,941
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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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11-13-2014, 12:46 PM
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#38
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Dryer sheet aficionado
Join Date: Dec 2013
Posts: 30
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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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11-13-2014, 12:46 PM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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11-13-2014, 01:38 PM
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#40
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
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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.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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