Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-11-2011, 08:51 AM   #41
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by donheff View Post
Now we know you are using MS Word to carefully craft your posts to avoid typos and stupid sounding phrasing like the rest of us.
The important thing is that I can blame all my posts (and even my "theory's") on the software. I had nothing to do with it ...
__________________

__________________
rescueme is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-11-2011, 08:57 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by rescueme View Post
(PS: The font is now too large but I'm not going to play around with this post any longer. Hopefully, you will not need your reading glasses )...
Excellent Post! Thank you for re-submitting it.
__________________

__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 01-11-2011, 07:41 PM   #43
Recycles dryer sheets
Arnie's Avatar
 
Join Date: Dec 2010
Posts: 230
Ha certainly does not need little old me to give a "+1" but I will. As poster, it's a good idea to provide context, thoughts or whatever. But I would not initially discount a post or think less of a poster just because of that - though I may not click on it if there is not enough info to catch my interest or make me feel safe. Sorry if we've moved on - I'm late reading this thread.

Also, don't the small fonts save room on the server?
__________________
Arnie is offline   Reply With Quote
Old 01-11-2011, 08:37 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,418
Quote:
Originally Posted by rescueme View Post
Disregarding the comment/discussion on "naked links", I did find the article important to explain why a lot of early boomers enter their retirement years with a less than optimal plan.

I'm 63. DW/me faced these exact conditions in our early 30's. I left a company after eight years and lost my pension since the federal rules said you had to be at a company ten years to be vested.

I didn't worry about that, since the company I was going to had a superior defined benefit (e.g. pension) plan and would more than make up for what I left behind.

DW was at another company that also had a DB plan. With both of us "promised" DB income (along with SS), we were following the same "retirement income path" of our parents/grandparents.

Only thing is that three years after I started with the new company, the DB plan was replaced by the "better" 401(k) plan. At the same time, the IRA came into being (for those that had a pension plan; before that time, you could only have an IRA if you were not covered by a pension).

So here we are, at age 34 with our DB plans eliminated, along with new, confusing options to pursue. Additionally, we now had to take a "pay cut" to participate in both the 401(k) and IRA (disregarding lower current taxes on deferred income).

It's quite a hurdle to jump, IMHO. Our parents/grandparents had better options; our children also do, since they know early on that retirement income is in their hands - along with having much more information available, early on.

The article does describe the reason so many early boomers are having problems. Life changed radically for them as related to retirement. The few that understood and accepted the "new reality" were able to learn (on their own) what they needed to do to make up time, with the new financial "tools" afforded them. They also understood that they could not live in the same manner as before (e.g. no reason to save for retirement) and accept a lower lifestyle (e.g. LBYM). That's hard to accept when you've been living the life that your parents had.

No wonder the majorities (IMHO) of those boomers currently are of traditional retirement age will continue to work. They have no option.

That, along with many of them taking care of their grandchildren (due to the challenges of their children with today's "social problems") just puts more of a financial strain on them...
This is a good point, and one that I haven't really thought about before. Thanks for pointing it out. Although there's no way to know if the younger w*rkers will have any more stability in their "retirement" planning than we did. Just in the past 10 years there's been the additions of Roth 401(k)s, companies stopping (and sometimes restarting) matching, automatic enrollment, etc. Some of these seem like good ideas, but so did the 401(k) at the time.

If you get down to the basics, the ones who managed to handle the changes that came along are the ones who LBTMs and saved without paying too much attention to the various vehicles and distractions. That will be true in the upcoming years too. If you save well, you have a chance of beating the odds. If you don't, you probably won't.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is online now   Reply With Quote
Old 01-11-2011, 08:47 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,753
Quote:
Originally Posted by rescueme View Post

(PS: The font is now too large but I'm not going to play around with this post any longer. Hopefully, you will not need your reading glasses )...
When I saw your original post I was sure you were giving us the details on a variable annuity. I'm disappointed.
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 01-12-2011, 07:09 AM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,634
Quote:
Originally Posted by harley View Post
This is a good point, and one that I haven't really thought about before. Thanks for pointing it out. Although there's no way to know if the younger w*rkers will have any more stability in their "retirement" planning than we did. Just in the past 10 years there's been the additions of Roth 401(k)s, companies stopping (and sometimes restarting) matching, automatic enrollment, etc. Some of these seem like good ideas, but so did the 401(k) at the time.

If you get down to the basics, the ones who managed to handle the changes that came along are the ones who LBTMs and saved without paying too much attention to the various vehicles and distractions. That will be true in the upcoming years too. If you save well, you have a chance of beating the odds. If you don't, you probably won't.
Right. The article is accurate for a subset of boomers who got blindsided by the demise of the DB plan. But that was always a minority. Most were always on their own, and most didn't adequately save. I suspect all the attention to current boomer retirement woes will spur a larger percentage of younger workers to save but not the majority. Talk to workers in their 30s and 40s and you will hear the same old same old. They are not maxing their 401Ks, they are not saving beyond that, they have CC debt, they will work till they drop, etc. A lot of people need to be forced to save -- that is why SS is such a cornerstone of old age. It probably wouldn't take too much to tilt a lot of people toward savings - setting max 401K contributions as an employment default with cigarette box style warnings if you opt out might be enough for many.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 01-12-2011, 10:00 AM   #47
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by kumquat View Post
When I saw your original post I was sure you were giving us the details on a variable annuity. I'm disappointed.
I hate to disappoint you. While we do have an SPIA (and it works very well, for our specific need), I would only recommend an SPIA, and only if can be used in a specific situation (not all people need an annuity, IMHO).

As far as variable's? I would only strongly suggest the vehicle to those that I truly hate and will be assured that they would never talk to me again .
__________________
rescueme is offline   Reply With Quote
Old 01-12-2011, 10:44 AM   #48
Recycles dryer sheets
 
Join Date: Jul 2010
Posts: 255
Quote:
Originally Posted by donheff View Post
Right. The article is accurate for a subset of boomers who got blindsided by the demise of the DB plan. But that was always a minority. Most were always on their own, and most didn't adequately save. I suspect all the attention to current boomer retirement woes will spur a larger percentage of younger workers to save but not the majority. Talk to workers in their 30s and 40s and you will hear the same old same old. They are not maxing their 401Ks, they are not saving beyond that, they have CC debt, they will work till they drop, etc. A lot of people need to be forced to save -- that is why SS is such a cornerstone of old age. It probably wouldn't take too much to tilt a lot of people toward savings - setting max 401K contributions as an employment default with cigarette box style warnings if you opt out might be enough for many.
Rescueme and harley make good points in their previous posts. I think that this post gets to the heart of the matter which is how many laws and regulations do we want in place to force people to do what is good for them. I am against most laws that force people to behave in a way that doesn't prevent them from harming others so that would include this situation on its face. However, if a person doesn't save and cannot work they run the potential risk of becoming a burden to society. I don't have the answer. I do feel that having the insight to save in your 20s or even 30s for retirement is a rare trait (in general, not here) and the 401K is a generally good vehicle so I lean toward something of an opt out that is fairly difficult.

My thoughts on the naked link: Don't click on it if you don't want. It doesn't hurt you by being there. Chances are someone will click on it and provide a summary in a subsequent post anyway.
__________________
SunsetSail is offline   Reply With Quote
Old 01-12-2011, 01:58 PM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,418
Quote:
Originally Posted by SunsetSail View Post
Rescueme and harley make good points in their previous posts. I think that this post gets to the heart of the matter which is how many laws and regulations do we want in place to force people to do what is good for them. I am against most laws that force people to behave in a way that doesn't prevent them from harming others so that would include this situation on its face. However, if a person doesn't save and cannot work they run the potential risk of becoming a burden to society. I don't have the answer. I do feel that having the insight to save in your 20s or even 30s for retirement is a rare trait (in general, not here) and the 401K is a generally good vehicle so I lean toward something of an opt out that is fairly difficult.
I don't think it has to be a law. I think employers can set it up that way without having to be forced. But I'm not sure how well it will work, anyway. Most people don't stay with one employer for very long, and therefore won't "set it and forget it". They'll change jobs, cash in the 401(k), and still end up short of money. The ones who save will save, the others won't. To quote the other Buffett, "There's no dumbass vaccine."
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is online now   Reply With Quote
Old 01-12-2011, 03:16 PM   #50
Recycles dryer sheets
 
Join Date: Jul 2010
Posts: 255
Quote:
Originally Posted by harley View Post
I don't think it has to be a law. I think employers can set it up that way without having to be forced. But I'm not sure how well it will work, anyway. Most people don't stay with one employer for very long, and therefore won't "set it and forget it". They'll change jobs, cash in the 401(k), and still end up short of money. The ones who save will save, the others won't. To quote the other Buffett, "There's no dumbass vacine."
I don't think many employers will voluntarily force contributions without an opt out in the absence of a legislative requirement, but I could be wrong.

You're absolutely right about changing jobs and cashing out. I've seen people that are highly intelligence in their fields make these types of moves.

There is a potential benefit for 'highly compensated employees' in that the more contributions that are made at the lower compensation the greater % contributions available for top hat employees.

Maybe the solution is to teach people that they need to save for themselves and hammer in the consequence is dog food for dinner. And if they don't, 'let them eat dog food.'
__________________
SunsetSail is offline   Reply With Quote
Old 01-12-2011, 06:12 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by SunsetSail View Post
Maybe the solution is to teach people that they need to save for themselves and hammer in the consequence is dog food for dinner. And if they don't, 'let them eat dog food.'
This does not happen in a modern social democracy. If you can't teach people not to smoke, how can you teach them not to fritter away their money? Cultures change, and ours has changed from the old protestant ethic to the modern post WW2 consumer ethic. Those of us here are throwbacks, perhaps because our personality structures are more non-conforming. This is especially true when the best and smartest manipulators work for advertisers and the media, who of course don't give a crap what happens to people once they are sucked dry. So teaching will not work. The best way is to make it such that the lazy, automatic easy path be that which is best for the individual and also for society. I don't think many of us are ready to see crippled orphans begging for bread on our streets.

Only way to avoid coercion or its modern and better twin, social manipulation, would be to turn back the clock 200 years and that is just not going to happen.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 01-12-2011, 08:39 PM   #52
Recycles dryer sheets
Arnie's Avatar
 
Join Date: Dec 2010
Posts: 230
Quote:
Originally Posted by harley View Post
I don't think it has to be a law. I think employers can set it up that way without having to be forced.
I have only given this a few moments thought, but if employers made the match a little more gradual it might increase the amount some people contribute. For example, instead of matching 100% of the first 4% of your pay, match 50% of the first 8%.
__________________

__________________
Arnie is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
A great Article.... armor99 FIRE Related Public Policy 24 04-23-2009 10:06 PM
Great article on Quants (and their role in the subprime mess) ChemEng FIRE and Money 17 10-23-2007 08:58 AM
Great Article: Stupid Guy - interesting though mickj Other topics 4 10-19-2007 11:14 AM
Great, simple advice nun FIRE and Money 16 09-15-2006 02:41 PM
Great Article about non-financial Retirement Plans hogwild FIRE and Money 1 06-23-2006 11:11 AM

 

 
All times are GMT -6. The time now is 09:31 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.