Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-13-2010, 09:45 AM   #101
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by ziggy29 View Post
If the theory holds, we'll have to hit bottom, scuffle amongst ourselves economically and politically for a while, and make a lot of sweeping changes before things return to prosperity in (perhaps) a decade or so.
Nice post - pretty much what I think.
__________________

__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex 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 08-13-2010, 09:57 AM   #102
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by landonew View Post

Nobody stole the American workerís ability to retire comfortably. Defined benefit plans were/are merely one vehicle for achieving financial independence (i.e. a comfortable retirement). Others remain available, even if they are (arguably) less effective. Ultimately, the American worker must take responsibility for his own retirement, not his Employer or the FED. If that means decreasing his SOL to increase after-tax retirement savings, then so be it.

I agree about taking responsibility, but many times the individual worker is at a disadvantage when negotiating with the employer because of the imbalance in resources and any argument for taking personal responsibility must also include encouragement for unions and collective bargaining. I agree with Adam Smith that we own our labor and I extend that to champion the ability of workers to organize to negotiate with the employer for fair wages, conditions and benefits.

I actually prefer 401k plans to DB plans because of the control they give to the employee, however, my problem is that when they replaced DB plans the result was an effective reduction of employees' pay. Wages were not increased to so that employees could fund their 401ks at the same level to be equivalent to the DB plan it was replacing. That's my beef.
__________________

__________________
nun is offline   Reply With Quote
Old 08-13-2010, 10:05 AM   #103
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by nun View Post
I actually prefer 401k plans to DB plans because of the control they give to the employee, however, my problem is that when they replaced DB plans the result was an effective reduction of employees' pay. Wages were not increased to so that employees could fund their 401ks at the same level to be equivalent to the DB plan it was replacing. That's my beef.
Agreed. I have no problem with the "new rules" that say you are more or less solely responsible for your own retirement (aside from Social Security, anyway). For those who entered the working world with that expectation already in place, it won't be a difficult adjustment. For those who toiled for 10-20 years with a pension expectation which was yanked, on the other hand, it's much different. You can't retroactively go back and max out personal retirement savings (which you didn't expect to need with the pension), and you can't go back to your 20s and get a public sector or union job and "restore" your pension expectation.

I had a pension in my first job, but fortunately I never trusted it or Social Security would be there for me so I've been aggressively investing in my 401Ks and (later Roth IRAs) since my early 20s. That's the main reason FIRE is still in my grasp even after my first Megacorp canceled my pension. If I just trusted the pension would keep growing through 30+ years of service and didn't bother to save much for myself, I'd probably have to kiss FIRE dreams goodbye.

In reality, though, the replacement of pensions with 401Ks probably resulted in a net compensation cut for employees even with a company match.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 08-13-2010, 10:40 AM   #104
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by ziggy29 View Post
A

I had a pension in my first job, but fortunately I never trusted it or Social Security would be there for me so I've been aggressively investing in my 401Ks and (later Roth IRAs) since my early 20s. That's the main reason FIRE is still in my grasp even after my first Megacorp canceled my pension. If I just trusted the pension would keep growing through 30+ years of service and didn't bother to save much for myself, I'd probably have to kiss FIRE dreams goodbye.

In reality, though, the replacement of pensions with 401Ks probably resulted in a net compensation cut for employees even with a company match.
When UTC sold the division I worked for part of the deal was that they vested everyone in the pension plan, even if they didn't have the required 5 years in the plan. That was a condition that the president of our division fought for. As a result I have a small COLAed pension coming to me at 59.5
__________________
nun is offline   Reply With Quote
Old 08-13-2010, 11:04 AM   #105
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,424
Quote:
I am truly sorry if you, or anyone else, found my post to be disrespectful. It certainly was not my intention.
And Iím feeling my age in my bones and showing it in aggressive posts. Youíve done nothing wrong - apologies as well.

Quote:
Here is one of the causes - public schools
./.
Bad schools produced bad teachers which produced worse students - repeat the cycle.
Agree. Big problem, getting worse.

Quote:
If the theory holds, we'll have to hit bottom, scuffle amongst ourselves economically and politically for a while, and make a lot of sweeping changes before things return to prosperity in (perhaps) a decade or so
Interesting theory. I guess that means thereís hope for my grandchildren (but maybe not so much for my kids).

Quote:
Maybe it is naÔve to think that Employers (for the most part) treat Employees fairly, and that, when necessary, laws are generally enforced to prevent the type abuses mentioned above.
Not so much naive as dangerous. The problem is not the likelihood you choose poorly, itís the consequence. Take the example I used above, replace pension with social security, and the same can happen to you. Rules are rules until theyíre not, and promises can be broken. The lesson Ė make sure to take care of yourself.
__________________
MichaelB is offline   Reply With Quote
Old 08-13-2010, 07:18 PM   #106
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,137
Quote:
Originally Posted by landonew View Post
Fair enough.
To be fair, you have precisely the right outlook for someone just starting out in the work world -- don't rely on your employer or the government or anyone else to secure your financial future; you are in charge of your own destiny. As a consequence, I believe that you will be very successful in life and undoubtedly will retire early.

But I think I can say without fear of contradiction that it was a dramatically different world when most of us started working. (For someone 62 today, that could have been as early as about 1966). Among other things, we were all, individually and as a society, much more trusting of societal institutions like the government, the schools, the church and big business. Should we old guys have been less trusting and more skeptical? In hindsight, of course! But our expectations were shaped by the society in which we lived, and it was not unreasonable for us to believe that getting a pension was a matter of course and something upon which we could rely.

I do apologize for being so curt with you earlier.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 08-13-2010, 08:25 PM   #107
Dryer sheet aficionado
 
Join Date: May 2010
Posts: 44
Retirement for the masses is a modern Western invention. The patent on this invention is about to expire as per the law of nature. It is impossible for 1 worker to support 1 idle non-worker indefinitely, but that is the situation the US finds itself in (154M labor force vs 310M population).

Retirement in the future will be for the privileged few, as it has been throughout history. Everyone else will work (or starve) until they die. This brings up an interesting question. If most people will be unable to retire tomorrow, are they correct to make no plans for it today? It would appear so - strange as it may seem.
__________________
oilspill is offline   Reply With Quote
Old 08-13-2010, 08:27 PM   #108
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,078
Art, is that you?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 08-13-2010, 08:30 PM   #109
Full time employment: Posting here.
BTravlin's Avatar
 
Join Date: May 2010
Posts: 994
Quote:
Originally Posted by oilspill View Post
Retirement for the masses is a modern Western invention. The patent on this invention is about to expire as per the law of nature. It is impossible for 1 worker to support 1 idle non-worker indefinitely, but that is the situation the US finds itself in (154M labor force vs 310M population).

Retirement in the future will be for the privileged few, as it has been throughout history. Everyone else will work (or starve) until they die. This brings up an interesting question. If most people will be unable to retire tomorrow, are they correct to make no plans for it today? It would appear so - strange as it may seem.
Could be but I'll go ahead and plan accordingly anyway because I don't intend on being one of the "most".
__________________
Wherever you go, there you are.
(In other words, no whining!)
BTravlin is offline   Reply With Quote
Old 08-13-2010, 09:02 PM   #110
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,264
Quote:
Originally Posted by BTravlin View Post
Could be but I'll go ahead and plan accordingly anyway because I don't intend on being one of the "most".
+1

No matter how bad it gets, those who took more steps to prepare will do better than those who did not. I think we see evidence of that every day.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 08-13-2010, 11:19 PM   #111
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: 6,422
Quote:
Originally Posted by landonew View Post
That certainly sounds like a Raw deal. I have very little practical experience, but I generally feel like I have a pretty good grasp of the various theoretical concepts. In my mind, I didnít consider that kind of manipulation to be possible - I assumed that there are/were protections in place to prevent that type of thing.

However, perhaps it is time that I appreciate the limitations of theoretical concepts. Maybe it is naÔve to think that Employers (for the most part) treat Employees fairly, and that, when necessary, laws are generally enforced to prevent the type abuses mentioned above. Anyhow, thanks for taking the time to provide a more detailed explanation of your point of view.
Quote:
Originally Posted by Gumby View Post
To be fair, you have precisely the right outlook for someone just starting out in the work world -- don't rely on your employer or the government or anyone else to secure your financial future; you are in charge of your own destiny. As a consequence, I believe that you will be very successful in life and undoubtedly will retire early.

But I think I can say without fear of contradiction that it was a dramatically different world when most of us started working. (For someone 62 today, that could have been as early as about 1966). Among other things, we were all, individually and as a society, much more trusting of societal institutions like the government, the schools, the church and big business. Should we old guys have been less trusting and more skeptical? In hindsight, of course! But our expectations were shaped by the society in which we lived, and it was not unreasonable for us to believe that getting a pension was a matter of course and something upon which we could rely.

I do apologize for being so curt with you earlier.
It's interesting. I hadn't thought of this for a long time until I read these posts. But in my megacorp, which was broken up as a monopoly back in '83/84, we considered ourselves part of the company. There was a partially written partially implied contract. We would work our patooties off for the company and they would take care of certain financial obligations when we retired. After divestiture we entered a world of competition that was so new to us that they actually made us take training to make the point that the company didn't owe us a daggone thing. However, if we valued our postions we had best keep working those patooties off. And if we made it to retirement there'd be something there for us. Over the next 15-20 years the environment became very much an us vs. them situation, with them being the company. And when I retired it was at the end of the process MichaelB described, with the company freezing pensions for all employees and moving a huge chunk of the plan to the executive pool. I ended up taking a lump sum that was significantly smaller than what I would have gotten had I been eligible for retirement 5 years earlier. If I hadn't always been a LBYMer I wouldn't have been able to retire on what I got, and many of my friends and cow erkers will be working for many more years now than they had originally planned. Partially their own faults, I agree. But not having been there, you don't know what it was like before.

So I agree that you have the right attitude for someone starting out now. And I can pretty much guarantee that things will be very different when you are at the end of your career than they are now. Sorry I can't say exactly how. Never was that good at predicting. But it's like the line from That Thing You Do. Watch your money and you'll land on your feet. Good luck.
__________________
"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 offline   Reply With Quote
Old 08-13-2010, 11:57 PM   #112
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by ERD50 View Post
+1

No matter how bad it gets, those who took more steps to prepare will do better than those who did not. I think we see evidence of that every day.

-ERD50
Which is why we need to make sure SS is protected. Some people on here might not actually need it, but what amazes me are the mass of people who parrot the popular mantra of "it won't be around when I retire" and then do nothing to save for retirement either because they don't make enough or spend too much. Everyone should make it known that they expect SS so that politicians will protect it as it's going to be the only thing for a lot of people. That will require sacrifice from everyone in taxes or delayed benefits, but the pain should be shared. I firmly believe that the US is capable of providing a decent retirement and expressions of return to the dark ages before the New Deal are frankly unamerican.
__________________
nun is offline   Reply With Quote
Old 08-14-2010, 06:59 AM   #113
Recycles dryer sheets
 
Join Date: Mar 2006
Posts: 206
I agree with nun. Recently I had a younger friend parrot the popular mantra on SS. It's a scam! It won't be there when I get there. I could do better with the money myself.

I asked him about his pension. He has none coming.
I asked him about his 401K. After some digging I found out it was very small.

The truth - it is not a scam or ponzi scheme (the only scam is the government spending the overages)

Most people heading into retirement have not saved and without SS couldn't survive - there is no reason to believe that will change - in fact views about SS change as people get closer to getting it.

If it was eliminated not only would it not be better invested by the majority of the populace (I was omnipotent when I was young too)- but based on the replacement of pension plans - employers would not pass on the difference - it would become company profits

If SS was eliminated the younger workforce would have a much tougher time finding work as the older populace would now be competing with more skills and perhaps some savings so they could work for less.

If SS was eliminated then a large part of the populace would be destitute (those that couldn't find or were unable to work) and we would have to provide for them through other social programs - the cost will not go away.

Finally - if projections are correct returns on investments will be smaller in the future and wage growth will slow or diminish making it harder to prepare for retirement.

The next generations should not try to eliminate SS but fight like hell to keep it. They will need it more than I will. Change it if necessary but some form is needed more than ever.

That's my three cents.
__________________
I'm trying to find myself.* Have you seen me anywhere today?
Mysto is offline   Reply With Quote
Old 08-14-2010, 07:50 AM   #114
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Quote:
Originally Posted by nun View Post
Which is why we need to make sure SS is protected. Some people on here might not actually need it, but what amazes me are the mass of people who parrot the popular mantra of "it won't be around when I retire" and then do nothing to save for retirement either because they don't make enough or spend too much. Everyone should make it known that they expect SS so that politicians will protect it as it's going to be the only thing for a lot of people. That will require sacrifice from everyone in taxes or delayed benefits, but the pain should be shared. I firmly believe that the US is capable of providing a decent retirement and expressions of return to the dark ages before the New Deal are frankly unamerican.
I hear you and what you say sounds good on paper. I am in the younger crowd and I admit I say that sort of stuff to myself - not going to be there or will be in some very different, reduced form. The thought of SS not being around makes me expect to save that much more during my working years. Cautious but realistic approach IMO.

What reason do I have to believe otherwise? Are politicians really going to start making those hard choices when election results depend on it? It's also easier to just kick the can down the road. Are people really going to start doing what is best for the majority of the country? One thing I have realized from this board & others who have paid in SS over the years is that people will look out for themselves with respect to SS. We are a society of "as long as I get mine" in many respects. Whether it be bad or good, just saying.....
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Old 08-14-2010, 09:33 AM   #115
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,137
If one were cynical, one might believe that pushing the meme "social security is a scam and will never be there for me" is done deliberately for the purposes of shaping expectations, so that people will be more willing to tolerate benefit cuts.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 08-14-2010, 09:36 AM   #116
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: 6,422
I loves me a good conspiracy theory!
__________________
"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 offline   Reply With Quote
Old 08-14-2010, 09:45 AM   #117
Recycles dryer sheets
Carnage's Avatar
 
Join Date: Aug 2010
Posts: 76
As someone who is (relatively) younger, I can say my DW and I will continue to push the, "We paid into it, we want it" meme.
__________________
Carnage is offline   Reply With Quote
Old 08-14-2010, 09:52 AM   #118
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Mysto View Post
If SS was eliminated the younger workforce would have a much tougher time finding work as the older populace would now be competing with more skills and perhaps some savings so they could work for less.
This to me is part of the most powerful logical argument against raising the SS retirement age. But it's not just that the older workers would be in there with more skills and experience (which is often used by employers as a reason *not* to hire someone; too much experience means too much salary expectations in their mind, even if it's just a way to legitimize age discrimination). It's also that they'd still be in there *period*, competing for jobs instead of being able to retire and leave the job to someone else.

I understand the demographic arguments for raising the age and they make perfect sense in a vacuum with no unintended consequences. But without the jobs for these millions of extra people who would have to work, many of them would have to fall back on public assistance, and when you factor that in, how much have we saved and what are the add-on social costs of creating a large, impoverished underclass of "young old" who are too young to collect a retirement check and too old to get hired? Not to mention that even more people chasing an even smaller number of jobs would depress wages even further.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 08-14-2010, 10:00 AM   #119
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,878
An easy trap to fall into when discussing this subject is to think the US (or the world) is just a whole lot of people just like us. The people that participate regularly on this forum are infinitely more financially astute, better educated and for the most part just plain luckier than the rest of the world.
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 08-15-2010, 04:07 PM   #120
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 291
Quote:
Originally Posted by nun View Post
I actually prefer 401k plans to DB plans because of the control they give to the employee, however, my problem is that when they replaced DB plans the result was an effective reduction of employees' pay. Wages were not increased to so that employees could fund their 401ks at the same level to be equivalent to the DB plan it was replacing. That's my beef.
I've been reading this thread with great interest, most especially since I heard last week no raises at w*rk for anyone next year. In my case, when the 401K replaced the DB and pay was effectively reduced as per Nun's analysis, I didn't fully realize for the first few years that my pay was being reduced. I was very young and retirement was forever away. Then the stock market was flying and the 401K was up, up, up every time you checked the balance, it just didn't register (call me naive).

Then the stock market wiped out several years of contributions and growth. The timeline for retirement gets extended to make the funds last longer. In the meantime, I'm getting older and at some point it's difficult if not impossible to change jobs/careers and start all over so you try to deal, and hope your health holds out.
__________________

__________________
bubba 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
Took Social Security too Early - Now what? dkcdoug Hi, I am... 3 05-31-2010 04:17 AM
Collecting Social Security Early (Before 66) blueeyes88 Hi, I am... 8 05-12-2008 05:35 PM
Early retirement and Social Security jimhcom FIRE and Money 6 05-23-2006 10:13 AM
Early social security--the first year eriter Other topics 3 01-25-2006 02:51 PM

 

 
All times are GMT -6. The time now is 01:35 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.