Pandemic of pension woes is plaguing the nation (CNBC)

[Chuckanut]

Ok I see a previous post that said 11% to 14.5% was the contribution amount, so this is getting more reasonable. It still doesn't compare to a person who saves 15% in a 401K and a further 6.4% in SS, ie 21.4%, which is almost double the lower end of the amount taken out of the pensioner paycheck.

Failure to add in the 6.4% in SS to the the 14.5% pension contribution makes an unfair comparison. It must be added to the pension saver's amount just as it was added to the 401K person who pays 15%. There are a few government institutions where employees do not pay SS tax, but they are an exception these days, IIRC.

 

[Fermion]

Failure to add in the 6.4% in SS to the the 14.5% pension contribution makes an unfair comparison. It must be added to the pension saver's amount just as it was added to the 401K person who pays 15%. There are a few government institutions where employees do not pay SS tax, but they are an exception these days, IIRC.

Why? In this thread people were saying all they had was their pension, they didn't have SS. I assumed that meant they didn't pay into SS.

 

[Mulligan]

Why? In this thread people were saying all they had was their pension, they didn't have SS. I assumed that meant they didn't pay into SS.

For me anyways with the system that contributes 14.5% and is matched 14.5%, I was not allowed to pay into SS. I have had various part time jobs and such over the years that have taken SS taxes. If I did not have a public pension I would be eligible for almost $500, but WEP knocks it down to a little over a $100. My system is probably pretty safe. They have an independent board that has the authority to assign mandatory contribution increases from both sides on a yearly basis without political influence to maintain system integrity. The last policy change was capping COLA to 2% fixed each year, so it wouldn't surprise me if things got bad the next next would be yearly multiplier reductions for incoming people if ever needed instead of increasing contribution rates. At some point it gets to high for both sides.

 

[pb4uski]

....I suspect it will take an entire generation of people retiring with nothing but SS, or not even that, to get the generation behind them on board with planning for their own retirement.

I agree. I think that we are the former and our kids may be the latter. At least based on DD, DS and some of my nephews.

 

[packrat44]

One young guy she worked with she had to almost literally drag him by the scruff of the neck down to the HR office to get him signed up for the company's 401(k). His prior retirement plan? "Win the lottery."

I suspect it will take an entire generation of people retiring with nothing but SS, or not even that, to get the generation behind them on board with planning for their own retirement.

Shortly after starting a new job about 30 years ago I had ask a co-worker if she and her husband invested for their retirement. The answer was to the affirmative. She said every payday they took $20, drove to the state line of a nearby state and purchased power-ball lottery tickets. She was stone sober serious this was a viable retirement plan.

 

[clifp]

Shortly after starting a new job about 30 years ago I had ask a co-worker if she and her husband invested for their retirement. The answer was to the affirmative. She said every payday they took $20, drove to the state line of a nearby state and purchased power-ball lottery tickets. She was stone sober serious this was a viable retirement plan.

Those 3 emoticon pretty much sum it up for me.
I mean you just can't fix stupid.

 

[Chuckanut]

Shortly after starting a new job about 30 years ago I had ask a co-worker if she and her husband invested for their retirement. The answer was to the affirmative. She said every payday they took $20, drove to the state line of a nearby state and purchased power-ball lottery tickets. She was stone sober serious this was a viable retirement plan.

I used to have a neighbor who told me his retirement plan was to wait for his uncle to die since he was going to inherit the old fellow's collection of gold bullion coins. Seriously. The next year he moved back to Las Vegas. A most appropriate choice of a hometown for him, IMHO.