Big_Hitter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I heard the titanic had an engine fire
Maybe so, but that was a drastic way to extinguish it.I heard the titanic had an engine fire
This seems pretty sophomoric, but I submit the reason most folks don't have adequate retirement funding is NOT because the various plans (whether DB, DC, IRAs, etc. etc.) are flawed (they certainly are) but because folks don't take the responsibility to make what's available to them work for them.
Space provided below for responsible differing views because YMMV.
As a 27 year old would I prefer a pension from a mega corp if I knew I could draw at 55 penalty free and was guaranteed to not only have that job for 30 years but also my wages would be kept market rate competitive? Absolutely. But with job hopping much more the norm I'll take a more portable plan that at least gives me a shot at a secure financial retirement as opposed to a broken system that assumes I can hunker down in place my entire career.
It took several serious mistakes on my part before I finally realized that I AM responsible for my own retirement. Yes, there are contractual and legal requirements placed on employers and gummint. BUT in the final analysis, if I don't take care of my own retirement, someone else will likely screw it up (either to save money or because THEY are incompetent or even because they are dishonest.)
For me the practical application to the above is that I LBYM, save like crazy, defer gratification, make decisions rather than letting someone else make them for me, diversify (not only AA but vehicles - having a DB does NOT mean you shouldn't also have a DC if it's available), PLAN for retirement, calculate benefits/SWRs, etc. In short, act like this is your second j*b.
This seems pretty sophomoric, but I submit the reason most folks don't have adequate retirement funding is NOT because the various plans (whether DB, DC, IRAs, etc. etc.) are flawed (they certainly are) but because folks don't take the responsibility to make what's available to them work for them.
Space provided below for responsible differing views because YMMV.
BINGO! +1000
[making full use of space provided......]
It's only the ones that come to this realization at some point in their lives that "make it". I DON'T believe there is a bunch of luck involved. It is a DECISION and a RESPONSIBILITY. Yes, there is luck for moving one up and (and down) within that "window" of comfort, but LBYM is your JOB, not someone else's (.....like your employer or thier retirement plan). If LBYM is not comfortable enough for you, then raise/improve your "means". This is America - anyone can succeed with enough drive.
One help for this, however, would be a mandatory financial class or two in high-school. Heck, we're preparing out kids for Job #1, why are we not preparing them for Job #2?
JMHO
It is hardly a new problem, as I recall someone referencing "the least of these" quite a while back. As a society, we have to decide how to deal with the unfortunate and the screw ups. To much empathy and you end up bankrupt, too little and out come the guillotines./sarcasm/
But, but, but, but.... what about all those poor people who cannot make a decision for themselves!!! SOMEONE has to take care of them... isn't that what gvmt is for
IMHO, Joe Average can't really self direct a long range retirement plan.
IMHO, Joe Average can't really self direct a long range retirement plan.
/sarcasm/
But, but, but, but.... what about all those poor people who cannot make a decision for themselves!!! SOMEONE has to take care of them... isn't that what gvmt is for
Set the default option on 401k to 10% contribution and put it all in a target date fund. Limit loans and withdrawals other than in retirement. Even Joe should be able to handle that, especially if it's a default part of the plan so no additional action is needed.
People did have mandatory contributions in the past. Some of have been linked in this thread.This would work, and I don't know why mandatory contributions and plan selections have not already been enacted.
Social Insurance ie SS and Medicare and personal savings are a sensible approach to retirement. On the personal responsibility side some people could improve, but many people simply don't have the income to save much and LBYM. With the cost of healthcare, education and housing rising the practical poverty level is creeping into the middle class. If you are working for minimum wage living day to day is hard so I can see how retirement saving would suffer.
ER people often forget that this is a rarefied place full of well paid people or those who've had job with great benefits so LBYM hasn't meant worrying about the kids being hungry.
Set the default option on 401k to 10% contribution and put it all in a target date fund. Limit loans and withdrawals other than in retirement. Even Joe should be able to handle that, especially if it's a default part of the plan so no additional action is needed.
The mechanics are simple, the politics are hard. Tell Joe the gumminit is forcing him to do something and watch him holler.
My company started the 401k plan around 1986. I've actually heard about a number of employees who have been around since that time but never contributed to the 401k. 30+ years foregoing a 75% match on up to 6% of salary It boggles the mind.