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rayinpenn 04-22-2015 04:47 AM

Early retirement - the golden era of benefits...
 
Four years ago my firm was contributing 14% of my salary to my retirement fund (highest % because over 25 years in) and they matched 5% on my 401k I put in 8% so 'all in' 27% of my salary was gong in each year. Now those numbers seem outrageous!

Bam the 14% is now 4% for everyone and the 5% match is contingent on the firms performance and must be approved by the board before it is funded at year end. So far they have every year. But the message is clear we decide if you get it and we can take it away.

Retirement health benefits are gone - my colleagues are on their own. My sister-in-law missed it by 3 weeks. A very sore subject. Those of us vested discover the subsidized retirement benefits pricing is not competitive. You can do better with Ocare.

No question I'm the oldest person there ... Few of my younger colleagues will likely never be able to build the nest egg we have. The golden era of benefits are gone... They will have to make up the difference.. I wonder just how many will?

The result...
A particularly bright and well regarded colleague confided in me that he had another job offer. It crystalized the truth - the golden handcuffs are gone - many would leave for a hundred bucks a week. Why not $400-$500 a month probably $250 more in the bank each month. Or perhaps more to throw against some student loans.

Once an upper management type told us the relationship starts new with each paycheck. I doubt he really understood how true that has become. I feel blessed to have worked at the right time. I worry about my kids retirements. All I can suggest will be save, save and save some more. (Boy I am getting redundant I say that about reading and studying too.)


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Greencheese 04-22-2015 05:36 AM

While I understand that benefits change over time I am concerned with the rise of the annual 401k contributions instead of the continual match each paycheck. It almost seems illegal to me that a company can promise a match throughout the year and require you to make contributions each paycheck, then wait until all the expenses and income for the entire year is accounted for before deciding if they actually want to provide their part. Not only does that give incentive for management to fudge numbers and slash benefits over time, but it gives motivation to cut people right before the vesting period just to save a few bucks.

jim584672 04-22-2015 05:37 AM

Frugality and savings are the only answers for the younger generation.

Where I worked they chipped away bit by bit at the benefits.
Examples:
Used to get a sick day a month. Now people get a yearly PTO bank, every sick day comes off your vacation time. Those with grandfathered sick bank days could not used them unless on short term disability, which means sick more than 5 days in a row. So you had to burn 5 vacation days before getting to use any sick bank days at all.

Pension frozen 12/31/2013. Replaced by a few percentage added to your 401k if you had enough years.

Implemented a PTO scheme that took away a week of vacation from those with 5 weeks vacation.

Removal of two holidays.

Frozen raises, instead of 12 months, moved to 18 months for a while.

Create another office in a state without a union, move half the staff. Break the union by diminishing its size. Claim it is for contingency purposes. Pay scale lowered for the new location.

Move jobs to India, China, and other places, cheaper labor.

Luckily they outsourced my job and was packaged out. So glad I don't have to work there any more.

travelover 04-22-2015 06:26 AM

Easy solution - become a top executive. They generally continue to get nice post retirement benefits, but then of course, and unlike you, they earn it. :laugh:

JoeWras 04-22-2015 07:50 AM

Quote:

Originally Posted by Greencheese (Post 1584655)
While I understand that benefits change over time I am concerned with the rise of the annual 401k contributions instead of the continual match each paycheck. It almost seems illegal to me that a company can promise a match throughout the year and require you to make contributions each paycheck, then wait until all the expenses and income for the entire year is accounted for before deciding if they actually want to provide their part. Not only does that give incentive for management to fudge numbers and slash benefits over time, but it gives motivation to cut people right before the vesting period just to save a few bucks.

Here's what one Megacorp did about 401k contributions.

They withhold until the end of the year. If you quit mid year, tough. This is really a painful change for anyone at that Megacorp. I have friends there and they are seeing red about it. A few are praying hard they can make it to retirement without being laid off.

I entered the workforce with paternalistic benefits. I had to quit my first Megacorp with minimal vesting. Now I'm on my own. It was interesting to see the bitter complaining of folks ahead of me who got some benefit reductions (but at least still had benefits, like medical retirement).

It is even more interesting to see the youngsters behind me who are complete free agents and embrace it. Good for them.

ChicagoGal 04-22-2015 08:02 AM

No doubt it's a very different environment out there. I've been with Megacorp almost 22 years. About 15 years ago, they changed the pension calculation methodology. Existing employees were grandfathered in such that they will calculate the pension both ways, and whichever is better for me, I get.

Then about 10 years ago, they changed the retiree medical program. My age + years of service were 4 months shy of being grandfathered in to that one. Used to be VERY generous. Now it's quite a bit less so, and I think ACA will probably make more sense when I retire in a few years, assuming it doesn't get mucked with too much.

They also only give annual salary increases to the top 10-15% of employees (and even then it's generally not more than 2%), unless you are very low in your salary range.

I realize I'm still very lucky to have a pension at all. It will provide a decent lump sum, or an annual payout of almost 30% of my current salary (although non-COLA). Glad to have it!

mrfeh 04-22-2015 08:58 AM

Quote:

Originally Posted by rayinpenn (Post 1584650)
All I can suggest will be save, save and save some more.

This. Save at least 15% of gross (hopefully more). And start early.

big-papa 04-22-2015 10:45 AM

I've never worked at a megacorp that offered a pension, though my DW did. When offered last year, however, we elected to roll a lump sump into her rollover IRA. I worked at one megacorp with a fairly generous 401K match that happened with each paycheck and was fully vested on day 1. My current company is much like what many are discussing here - the amount of match is determined annually and the actual deposit is made in April of the following year. And if that's not bad enough, there is a linear vesting period that starts at year 2. In actual $'s, it appears to be more generous than what I've had in the past, but the vesting period sucks.

Big_Hitter 04-22-2015 10:51 AM

minimum statutory vesting for dc plans is 3 yr cliff or 6 yr graded


here's something interesting - https://finance.yahoo.com/news/when-a...162344633.html

big-papa 04-22-2015 10:54 AM

Quote:

Originally Posted by Big_Hitter (Post 1584793)
minimum statutory vesting for dc plans is 3 yr cliff or 6 yr graded

What's a dc plan? BTW, my previous company had a 5 year vesting that started after year 1.

Big_Hitter 04-22-2015 10:56 AM

defined contribution plan

big-papa 04-22-2015 11:02 AM

Quote:

Originally Posted by Big_Hitter (Post 1584799)
defined contribution plan

Ah, OK - thanks! BTW, an article that describes this is located here: What You Should Know About Your Retirement Plan

I only wish my employer would follow this particular sentence in the article referenced above: "Plans may provide a different schedule as long as it is more generous than these vesting schedules."

bclover 04-22-2015 11:29 AM

I tell my kids to get government jobs and sincerely mean it. the other choices imo are horrible.
Seriously,
I feel bad for niece. lives in NY only makes 22000K a year. after student loans and rent she has absolutely no money left. she does participate in her 401K but no way could save 15% and the sad part about it is, she and her peers will never have any type of enjoyment while they are young.

My youngest son has decided to never have kids. Primarily because of the obstacle of the cost of raising kids, home ownership, saving for college and trying to save for retirement.
Since he does not want to work until he drops dead he made the decision not to have kids. His fiancee feels the same way. I'm sure there maybe more too it but in some fashion I totally understand.

fosterscik 04-22-2015 11:32 AM

Quote:

Originally Posted by Big_Hitter (Post 1584793)
minimum statutory vesting for dc plans is 3 yr cliff or 6 yr graded


here's something interesting - https://finance.yahoo.com/news/when-a...162344633.html

That is a nice summary of some of the findings in the EBRI study. IMHO it's worth reading the full report that the yahoo article is based upon:

https://www.ebri.org/pdf/briefspdf/EB...5_RCS-2015.pdf

Lots of interesting facts and figures about retiree savings (by income level), spending as well as the retirement-age data presented in the yahoo article. The savings levels cited are well below many of the ERers on this site and are sobering.

HF63 04-22-2015 11:41 AM

I told my son the same thing, I tell my kids to get government jobs and sincerely mean it. the other choices are horrible.


My wife works for the government and over the years she made less money and did fine.

brett 04-22-2015 11:48 AM

I too am fortunate. 25 years with Megacorp and I managed to keep my grandfathered DB plan.

I saw jobs move offshore and benefits chopped. No more DB and company DC contribution is based on company performance. Salary freezes, the lot.

The big decrease was benefits. The total wage bill used to be 153 percent of salary. Benefits/training etc. accounted for 53 percent. Fast forward about ten years (just before I left) that total wage bill had been reduced to just over 120 percent.

brewer12345 04-22-2015 01:19 PM

But look at the flipside:


We are moving to a "gig" labor market. To some extent more and more of the labor force are effectively contract workers for their employers. That means that you cannot expect to find a cushy job, tune out, and wait 30 years for the pension. But it also means there is no reason to stick around in a boring, abusive, or poorly paid position because you are stuck in the "pension trap." Keep that resume polished and shop yourself around regularly. It usually comes with a raise when you leap and you learn a lot more that way.

photoguy 04-22-2015 02:00 PM

I think there's been significant wage growth for the top quintile of workers over the past few decades. So for these folks, even if they lost pensions and so forth, it may be easier to FIRE.

I suspect that the golden age of early retirement is actually right now. My guess is that there are more people FIREing early (say 30s / 40s) than ever before -- but I have no data to back this up.

ACA and guaranteed issue of healthcare is going to speed up this trend. ACA was much more important to me than a pension.

Walt34 04-22-2015 02:58 PM

Quote:

Originally Posted by bclover (Post 1584817)
I tell my kids to get government jobs and sincerely mean it. the other choices imo are horrible.

I was just discussing this with DW a few days ago, how lucky we are. The elder law attorney we dealt with on FIL's issues said I was a "financial dinosaur". Have a government DB COLA'd pension, SS benefits coming, decent savings. Not wealthy by any stretch but comfortable. The pension plan is near fully funded so (almost) no worries.

Even where I used to work they don't offer that plan any more and haven't since the mid 1980's (I started in 1973). They offered half of your previous retirement contributions back if you switched to the new plan. I didn't take the bait but a lot of guys did, buying boats, motorcycles, cars, etc. and they are sorry now. But the new plan is still lots better than what private industry offers.

athena53 04-22-2015 03:03 PM

I worked for a GE sub from 2002-2006, when it was acquired by another MegaCorp. While my GE pension was cut off (I was vested in a whopping $10K/year beginning at age 60 with no extra if you deferred) and cut out of the DB plan of the acquiring company (let's all them AC) because they'd terminated it to new entrants years ago, the tradeoff wasn't bad. They matched up to 100% of your first 6% in the 401(k) and also threw in 6% regardless of whether you participated or not if you weren't in the DB plan. They also had a "phantom stock" purchase plan that was lucrative for a lot of us in the year the stock price quadrupled as it rebounded from the financial crisis.


Well, they tell me that plan is gone. The 401(k) match isn't as generous, the health insurance plan is an HDHP instead of traditional indemnity, and this year's bonus was about 70% of last year's. (Salary increases were already minimal because they wanted a bigger % of compensation to be variable- and now you can see why.)


The 6% to those who weren't in the DB plan was always paid the following March but they actually paid it even if you left. I was impressed. As for the normal 401(k) match being annual and only if you're still there, Chubb, which is otherwise a very good company, started that years ago.


DS works for an insurance company with a DB plan and they treat him well. He keeps applying for positions that add to his expertise and has a good record of getting them (with generous raises). I tell him over and over again to be grateful he works for such a good employer.

pb4uski 04-22-2015 03:57 PM

I'll admit that the IBM approach of crediting the match only if you are there as of a certain date rubs me the wrong way. I think it should be done each pay period like many/most employers do.

That practice is especially appalling for employees who are contributing and then are laid off or fired... they should get the match on their year-to-date contributions since they did not leave voluntarily. I can see an argument for not crediting the match for those who leave voluntarily during the year, but if I were king I would take the match forfeited by employees who left voluntarily and distribute it to those who stay as a bonus match.

Big_Hitter 04-22-2015 03:59 PM

^ I believe the year end match takes them out of the safe harbor so it makes them subject to ADP testing

daylatedollarshort 04-22-2015 04:10 PM

I tell our kids freedom is low overhead and high demand job skills, especially skills that can be done as a contractor or small business owner.

bclover 04-22-2015 06:07 PM

Quote:

Originally Posted by photoguy (Post 1584863)
I think there's been significant wage growth for the top quintile of workers over the past few decades. So for these folks, even if they lost pensions and so forth, it may be easier to FIRE.

I suspect that the golden age of early retirement is actually right now. My guess is that there are more people FIREing early (say 30s / 40s) than ever before -- but I have no data to back this up.

ACA and guaranteed issue of healthcare is going to speed up this trend. ACA was much more important to me than a pension.

+1

I have quite a few friends in my age bracket (50ish) that are truly contemplating retiring soon because now they have a reasonable chance of getting affordable healthcare, where before many would not even think about it.

JoeWras 04-22-2015 06:09 PM

Quote:

Originally Posted by brewer12345 (Post 1584857)
But look at the flipside:


We are moving to a "gig" labor market. To some extent more and more of the labor force are effectively contract workers for their employers. That means that you cannot expect to find a cushy job, tune out, and wait 30 years for the pension. But it also means there is no reason to stick around in a boring, abusive, or poorly paid position because you are stuck in the "pension trap." Keep that resume polished and shop yourself around regularly. It usually comes with a raise when you leap and you learn a lot more that way.

Yep., Seen that happen. And some management is dumbfounded. Others understand. You reap what you sow.

JoeWras 04-22-2015 06:15 PM

Quote:

Originally Posted by Walt34 (Post 1584896)
I was just discussing this with DW a few days ago, how lucky we are. The elder law attorney we dealt with on FIL's issues said I was a "financial dinosaur". Have a government DB COLA'd pension, SS benefits coming, decent savings. Not wealthy by any stretch but comfortable. The pension plan is near fully funded so (almost) no worries.

Even where I used to work they don't offer that plan any more and haven't since the mid 1980's (I started in 1973). They offered half of your previous retirement contributions back if you switched to the new plan. I didn't take the bait but a lot of guys did, buying boats, motorcycles, cars, etc. and they are sorry now. But the new plan is still lots better than what private industry offers.

For sure, Walt34! You are a dinosaur! Even my dad who started working in 1946 with an AFL-CIO union didn't have a COLA pension in 1997. Thank God he had a DB pension in his later years, despite the non-COLA. It was a godsend to us kids when he entered long term care. (Aside: the fact that the standard will be no pensions <COLA or otherwise> is going to really BITE HARD on kids in the next few decades when they look at parent care. MARK MY WORDS.)

A DB COLA is "wealthy" in many respects.

That said, I'm not jealous. In many senses, I'm free knowing that I'd never have that. Megacorp #1 made that clear in 1993. Megacorp #2 said "What is a pension? We don't know that word." With that in mind, I've saved, saved, saved. Once I get out of OMY hell, I'm free.

OK, all that said, now whtat I've written it down, maybe I am a bit jealous about a COLA DB. :)

Cut-Throat 04-22-2015 06:18 PM

You just have to look at Labor History of the US over the last 100 years to understand what is going on. The only reason that Corporations gave out Pensions and other Benefits to Workers was to Compete with Unions for Labor. Otherwise all workers would gravitate towards Union Jobs. Corporations did not give out Pensions, Vacations, Sick Pay, 40 hour weeks and all the other Benefits out of the 'Goodness of their hearts' but did so so that they could attract talent from the Union Labor roles.

Now that Unions have been mostly Busted in the U.S., Corporations are free to eliminate Pensions and Benefits under the guise that "We cannot compete with Cheap Labor of other Countries". When in reality U.S. Corps have never made more money than today and are actively off-shoring jobs at record numbers.

This will eventually change when U.S. workers are exploited to the point that they will have to re-fight the Labor Wars of the 1930s and 1940s all over again.

Until then the U.S. workers are at the Mercy of Corporations that are free to remove benefits and wages until workers finally end up protesting.

I am glad I am retired and do not have to participate in this. I thank my ancestors of the 1930s that fought hard for the meager benefits that I did have. No Pension, but at least I had good working conditions, 40 hour week, vacations, sick days, health insurance, overtime and 8 hour days.

JoeWras 04-22-2015 06:23 PM

Cut-Throat: maybe that's heading to politics. But I think you have a good point. On the surface, my politics disagree with you. (I'm not a union guy.) However, seeing how well my dad's Union treated him in his dying years, I'm grateful for that Union. I think you have very valid points. Many of us non-union people actually benefited from Unions. It kind of pains me to say it, but I think it has merit.

Meanwhile, I just wish my Dad had a COLA pension. But that's another matter. Not all Union pensions are the same.

Second meanwhlie: I'm OMY and glad I'm 1, 2 or 3 years from being done with this. There will be future labor wars in my business. The wages are dropping so fast it is scary.

pb4uski 04-22-2015 06:24 PM

Cut-Throat, are you having difficulties with your "shift" key? ;D

Cut-Throat 04-22-2015 06:32 PM

Quote:

Originally Posted by JoeWras (Post 1584970)
Cut-Throat: maybe that's heading to politics. But I think you have a good point. On the surface, my politics disagree with you. (I'm not a union guy.) However, seeing how well my dad's Union treated him in his dying years, I'm grateful for that Union. I think you have very valid points. Many of us non-union people actually benefited from Unions. It kind of pains me to say it, but I think it has merit.

I was never in a Union myself either, but I know I reaped benefits hard won by Unions. I look at the Labor Situation in the U.S. in the 1910s and 1920s when Children were working and there were no safety laws what-so-ever. These things were not overcome without a severe struggle. Things are definitely getting worse for Labor again in the U.S. and those Struggles will have to be re fought.

JoeWras 04-22-2015 06:40 PM

Quote:

Originally Posted by pb4uski (Post 1584971)
Cut-Throat, are you having difficulties with your "shift" key? ;D

I didn't See a problem At All.

JoeWras 04-22-2015 07:12 PM

Quote:

Originally Posted by Cut-Throat (Post 1584978)
I was never in a Union myself either, but I know I reaped benefits hard won by Unions. I look at the Labor Situation in the U.S. in the 1910s and 1920s when Children were working and there were no safety laws what-so-ever. These things were not overcome without a severe struggle. Things are definitely getting worse for Labor again in the U.S. and those Struggles will have to be re fought.

My grandmother quit school in 6th grade in 1910 to work in the garment factory. She was making less than $0.10 per hour. I hear the stories!

These things come and go in waves. I suspect there will be another labor wave coming. But maybe not. As long as the youngsters I know can wear a visible tattoo, they don't care. Seems that looks and presence (and freedom of such) are more important that wages at this period of time.

PhrugalPhan 04-22-2015 08:18 PM

Quote:

Originally Posted by JoeWras (Post 1584991)
My grandmother quit school in 6th grade in 1910 to work in the garment factory. She was making less than $0.10 per hour. I hear the stories!

You're hearing the stories? Don't mind me asking, but just how old is she now????

Calico 04-22-2015 08:43 PM

Quote:

Originally Posted by PhrugalPhan (Post 1585008)
You're hearing the stories? Don't mind me asking, but just how old is she now????

In my family stories are passed down through the generations. I imagine it's the same for most families.

LitGal 04-22-2015 09:22 PM

Quote:

Originally Posted by mrfeh (Post 1584737)
This. Save at least 15% of gross (hopefully more). And start early.

+1 My mantra to DS and his wife.

:frown:

JDPascale 04-22-2015 11:53 PM

Quote:

Originally Posted by Cut-Throat (Post 1584967)
You just have to look at Labor History of the US over the last 100 years to understand what is going on. The only reason that Corporations gave out Pensions and other Benefits to Workers was to Compete with Unions for Labor. Otherwise all workers would gravitate towards Union Jobs. Corporations did not give out Pensions, Vacations, Sick Pay, 40 hour weeks and all the other Benefits out of the 'Goodness of their hearts' but did so so that they could attract talent from the Union Labor roles.

Now that Unions have been mostly Busted in the U.S., Corporations are free to eliminate Pensions and Benefits under the guise that "We cannot compete with Cheap Labor of other Countries". When in reality U.S. Corps have never made more money than today and are actively off-shoring jobs at record numbers.

I think you nailed it with above.....I would like to add US Corps are crying we need to tighten our belts to remain competitive all the while their salaries and perks are going through the FRIGGEN roof....>:( I have seen my CEO's compensation triple over the last three years.....:nonono: Have they no shame??

travelover 04-23-2015 06:32 AM

Quote:

Originally Posted by JDPascale (Post 1585048)
............ Have they no shame??

With a few exceptions, like Warren Buffett, I'd say the answer is no.

68bucks 04-23-2015 12:34 PM

The company I have been with for 30+ years still offers a generous plan. This is a DC plan, no pension. It is a combo of profit sharing and an ESOP. We are heavily weighted toward the company stock plan though, we're employee owned not public. Our company has contributed the maximum allowable almost every year since I got here and with the two plans that is up to 25% or your gross. They even contributed money for a couple years when we had little or no profit. We contribute nothing out of pocket. Our founders (one still alive) have a strong belief that company profits should be used to grow the business and benefit the employees. They are uncommonly benevolent. It would have been very easy to pocket a ton of money and do some lousy 6% match. I find it funny though that we are quite a conservative company including the political leanings of the upper management. They detest the government being involved in business and are vehemently anti-union. Yet their actions are far more liberally leaning regarding actual treatment of employees. We work people like dogs (me included) but treat people like human beings. If every company took the pains to treat employees like we do a great deal of the social benefit problems would disappear.

Big_Hitter 04-23-2015 12:40 PM

^ wow you should have a bundle in there by now - that's awesome

Which Roger 04-23-2015 02:11 PM

The "good old days" of lifetime employment with MegaCorp, followed by a gold watch, pension, and retiree health insurance, or a steady-job-for-life in a union, were indeed good, for those who were able to attain either of those.

For those who were stuck on the outside looking in, things were much different. Someone very close to me was in such a situation, and it wasn't pretty. The worst thing was the lack of empowerment he felt without the support structure provided by MegaCorp or a union.

These days, empowerment comes not from being part of an organization, but rather from one's specialized knowledge and skill set, initiative, and ideas. Those who do not possess these characteristics are the ones left on the outside looking in.

So things have changed, and whether it's for the better or for the worse overall is arguable, and the answer is different for each individual.

Walt34 04-23-2015 02:47 PM

Quote:

Originally Posted by JoeWras (Post 1584966)
For sure, Walt34! You are a dinosaur! Even my dad who started working in 1946 with an AFL-CIO union didn't have a COLA pension in 1997. Thank God he had a DB pension in his later years, despite the non-COLA. It was a godsend to us kids when he entered long term care. (Aside: the fact that the standard will be no pensions <COLA or otherwise> is going to really BITE HARD on kids in the next few decades when they look at parent care. MARK MY WORDS.)

I strongly suspect that the pension plans like I have will prove to be a historical aberration unlikely to be repeated, born of the post-WWII economic expansion and the elation that the Depression and the war were over, and an overall labor shortage for the expansion. Bearing in mind that I started that job in 1973, the pension plan came into existence in the 1960's.

They thought the economic party would never end, and of course eventually it did. I doubt that mistake will be repeated.

So basically I think I'm just lucky to have been born into the time and place that I was. Yes, I did work lots of strange hours, missed a lot of family holidays, very high stress at times, and all that. Lots of other people did and do that too.

I look at DW's nephew and his wife, and some of my family nephews and nieces, they are going to have a hard time trying to retire. None that I know of are saving anywhere near what they should be, if anything. DW's nephew, who we are closest to, is only saving up to the 6% company match and of course that's not near enough. I suspect he may end up living in his daughter's basement (she is doing very, very, well in school although at the age of nine a lot can happen). He and his wife are boresighted on getting the kids into better schools and is sacrificing all, including his and his wife's future, to get there. Admittedly that one is a tough call.

It is an entirely different financial world than the one I came into.

bclover 04-23-2015 03:15 PM

LOL a couple of things to point out.


1) there have always been cries of financial doom. Remember the concept of retirement as we know it is pretty much a new concept. pre wwII folks simply worked until they could no longer. early retirement? what was that. My sister and I are pretty much the first folks in our family who would even consider such a thing.
2) the good old days of pensions where pretty much a very short period of time. maybe 20-30 years. so this idea we have that back in the glory days everyone had pensions and then kicked up their feet and started living la vida loca isn't really accurate.
3) most retirees will cut back on their expenses and standard of living but that's always been the case.


this is an old article but it's pretty interesting.
The Biggest Retirement Myth Ever Told


Now that's not to say, our youngins don't have to be smart, but I think the basic financial lessons we teach:
1) live below your means
2) save for a raining day
3) start early and save consistently
will make the biggest difference.

bclover 04-23-2015 03:20 PM

I work for megacorp usa. a big chemical company based in Delaware. I've seen changes also, some good some bad.
We have the third best 401K plan in the country. company matches dollar for dollar up to 6%, give an automatic extra 3% for anyone who contributes at the 6% level and every year the company makes a profit, they throw in another 2%.


I'm an oldie there, anyone who started before 2008 has a pension but the pension was never the greatest. I think at full payout it was only 1/3 of your salary, so no matter what you always had some responsibility to save.

Teacher Terry 04-23-2015 03:36 PM

My hubby & I both have cola pensions which I am very happy for. The article about the retirement myth was interesting.

Sue J 04-23-2015 04:18 PM

Quote:

Originally Posted by HF63 (Post 1584824)
I tell my kids to get government jobs .......

One of our sons works in IT for a county social service. He is 30 and has 8+ years of service already. The pension system is the same one that DH is retired from, with a fixed 3% COLAed pension. Since DH retired in 2010 they have already changed the pension system, adding 2 years for full retirement and changing the COLA to indexed up to 3%.

When DH retired there were generous health benefits for the retiree and the spouse after 10 years of service which also changed. You now need 20 years and after 2019 there will be no coverage offerings for spouses.

So far our son plans on staying with his job until retirement (27 yrs for early - 32 years for full) but who knows.

DHs pension is modest but our expenses are low so it's plenty for us and we can even save 12% every month. In June he will get his 5th COLA. It really adds up to a significant amount by now.

Yes, we feel like dinosaurs, but very happy to be dinosaurs at this point ;)

Cut-Throat 04-23-2015 04:35 PM

Quote:

Originally Posted by Which Roger (Post 1585237)
These days, empowerment comes not from being part of an organization, but rather from one's specialized knowledge and skill set, initiative, and ideas. Those who do not possess these characteristics are the ones left on the outside looking in.

So things have changed, and whether it's for the better or for the worse overall is arguable, and the answer is different for each individual.

The problem is in the numbers. Most of us posting here had parents that benefited from the Large Middle Class of the 1940s-1980s.... You had a large head start into economic prosperity. This provided education, housing, health care and nurturing that individuals may not get today.

Everyone here that is posting has been helped by the economic conditions of the last 50 years. Those in the future do not have 'This leg up' and to imply that their fortune lies upon their own resources may be true, but it is certainly not equal to the Large head start that we all had. The ones that do not 'Succeed', will be part of society also. And society will bear the burden of their 'failure'.

NanoSour 04-23-2015 08:50 PM

Quote:

Originally Posted by Cut-Throat (Post 1585317)
And society will bear the burden of their 'failure'.

And this is the scary part with over 9 billion persons on the planet by 2050.

papadad111 04-24-2015 05:20 AM

Quote:

Originally Posted by brewer12345 (Post 1584857)
But look at the flipside:


We are moving to a "gig" labor market. To some extent more and more of the labor force are effectively contract workers for their employers. That means that you cannot expect to find a cushy job, tune out, and wait 30 years for the pension. But it also means there is no reason to stick around in a boring, abusive, or poorly paid position because you are stuck in the "pension trap." Keep that resume polished and shop yourself around regularly. It usually comes with a raise when you leap and you learn a lot more that way.


+1. Lots of data showing that the younger generations will hold 7-8 different "jobs" in their career versus those retiring today who typically held 1 or 2 ..

athena53 04-24-2015 07:05 AM

I just retired last year and held 7 over 39 years. (Eight if you count an employer which was acquired although I stayed on for 6 years after the acquisition.) I can honestly say that only one was voluntary. Most of the rest were having the job go sour (a couple of consulting firms that fell on hard times, one relocation I couldn't make because my husband's job wasn't portable) and once I was downsized. So, it's been happening already.


As for advice to get civil service jobs for their stability and pensions: nothing is forever. Many municipalities are trying to figure out how to cut back on their generous pension plans because they can't afford them anymore. Retiree health care is also being cut, especially for recent hires. They're promising less. And some civil service jobs have problems of their own- boredom, inflexible bureaucracy, understaffing, etc. Sure, that can happen in the private sector but it would be harder to hang on if you had a nice civil service pension waiting for you if you just kept at it another 20 years. It's sort of a trap.

Big_Hitter 04-24-2015 07:49 AM

I'm on my 3rd employer after about 30 years in the biz.


All of them had/have good retirement benefits, including my current employer. Retirement/health benefits played a key part in each hire/resignation decision I made, all voluntary.


I worked for one employer for 20 years (had a 4 year service break at another firm but went back) and have a non-colad pension of 30% of FAP payable at 65. I keep waiting for them to offer me a lump sum....

Live Free 04-24-2015 08:41 AM

My parents have it made in the shade with a Cola'd pension from the feds until death. And both retired before 60.

I think a lot of folks on this board made their income in years where computer programmers and systems engineers were in high demand. The demand is still there, but I see A LOT of outsourcing of these jobs now. My nephew owns his own engineering firm and about 10 years ago he was talking about how he chose engineering because it couldn't be outsourced. You had to have a PE and be licensed in your state. Recently he told me he was wrong about that. Whatever engineering plans he needs he can outsource to engineers abroad for a quarter of the cost and then just review and certify them himself after review. I work for a large megacorp. I note that our 3 network engineers in our building are H1b visa holders and our company saves a crapload on labor costs using them. Welcome to the global economy!

Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?

Big_Hitter 04-24-2015 08:48 AM

Quote:

Originally Posted by Live Free (Post 1585505)
I think a lot of folks on this board made their income in years where computer programmers and systems engineers were in high demand.

you mean like back in the day where there would be a "charge" for computer time and the IT guys were always preventing you from modifying your PC so you could do your job more efficiently?

Big_Hitter 04-24-2015 08:49 AM

Quote:

Originally Posted by Live Free (Post 1585505)
Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?

not sure - my dad told me not to go into the oil biz and I'm glad I didn't

Amethyst 04-24-2015 08:52 AM

My, didn't that attorney have a gift with words! Dinosaur, indeed. If he weren't such a dinosaur himself, he would have used "unicorn" (something admirable and rare)!

Quote:

Originally Posted by Walt34 (Post 1584896)
I was just discussing this with DW a few days ago, how lucky we are. The elder law attorney we dealt with on FIL's issues said I was a "financial dinosaur". Have a government DB COLA'd pension, SS benefits coming, decent savings. .


Which Roger 04-24-2015 09:05 AM

Two paths to similar financial results: I had only one "real job" for my entire career. I had a pension waiting for me, thus the golden handcuffs. A sibling was somewhat of a job hopper, changing jobs every 5 years or so. No pension, but pay boosts when changing jobs that far exceeded my raises. End result is that I have a modest pension, but sibling has higher earnings, thus we have similar net worth at similar ages.

Regarding globalization: Yes, there is a lot of outsourcing, but there are also a lot of foreign companies that have a large presence in the US and hire a lot of US workers (I was one of them).

daylatedollarshort 04-24-2015 09:56 AM

Quote:

Originally Posted by Live Free (Post 1585505)
Edited to add: this is why I worry about my kids. Even if they go the engineering or IT route -- will that ensure security?

It won't long term. But the ability to learn new things and be willing to go back to school as needed will. Also teaching them how to have a nice life with low overhead will help them to become FI, like Shillers advice to his students:

My students are living alright, Shiller said. Ive suggested to them, why dont you just continue to live at that level after you get a job? It would pile up into a lot of money.

Big_Hitter 04-24-2015 09:58 AM

dunno, personally I've studied and worked way to hard to live like I did in college

UnrealizedPotential 04-24-2015 10:31 AM

My company has a pension plan. It is still ok for me , but for new hires the plan is very weak. I have almost 26 years in. With all that I still have to save all I can to even have a prayer at retirement.

Big_Hitter 04-24-2015 10:46 AM

^ ich auch - one of my main goals in life is to retire longer than I w*rked - gotta save a lot or lbym or both - I'd rather just save a lot and live at my means

daylatedollarshort 04-24-2015 10:57 AM

Quote:

Originally Posted by Big_Hitter (Post 1585546)
dunno, personally I've studied and worked way to hard to live like I did in college

I guess it depends how you lived in college. Our kids have it pretty good.

Big_Hitter 04-24-2015 11:00 AM

I shared a crappy townhouse/apt in Alief while I commuted to UH and drove around a ghetto ford - not my idea of living the dream - ate a lot of pizza and drank a lot of shiner tho


google alief if you want a laugh

Cut-Throat 04-24-2015 11:24 AM

Quote:

Originally Posted by daylatedollarshort (Post 1585560)
I guess it depends how you lived in college. Our kids have it pretty good.

Yes, I've seen a lot of people's kids that lived very well in college. Thanks to mom and dad. I've also seen a lot of these kids move back in with their parents when they finish college.;)

Which Roger 04-24-2015 11:55 AM

I'm not convinced that this will all end as badly as many others seem to think. Many on this board have experienced the period of transition, where the rug (pensions, job security, etc) has being pulled out from under them. With that security, there was less need to save. But younger workers have never had this security, and I don't think that this is lost on them; they may indeed have an increased emphasis on saving, especially when they reach their high earning years. It's too early to tell. Also, companies are still going to need to attract and retain skilled workers, so if they're not offering the old-fashioned golden parachute, they will need to make it up with something. This all needs a lot more time to play out before I'm convinced that the younger generation is doomed.

Andre1969 04-24-2015 12:14 PM

Quote:

Originally Posted by bclover (Post 1584817)
I tell my kids to get government jobs and sincerely mean it.

My grandmother's cousin has been getting on me about this, saying I should go into the government. I keep telling her that the federal government's pension isn't nearly as lucrative as it was back in her day, and she finally got off that track, but told me I should try for state gov't.

Then I told her that as far along as I am in my career, I'd have to probably work a good 30 years before I got a pension to amount to anything. She replied "what's wrong with that?" I told her well, I'm 45 now, so that means I wouldn't retire until I'm well into my 70's! :yuk: To which she replied "So?"

She retired in 1980 at the age of 55-56, from a GS-13 job in the federal government. When I was younger, I always admired her for being an early retiree, but in later years, I found out that she kinda got pushed out, so she didn't really leave of her own free will. And now that she's 90, she's very close to running out of money, although a lot of that is because she constantly bailed out her kids and grandkids every time they got into trouble. So I think she's looking back on her own past and wishes she had worked longer, and as a result thinks I should, too.

Despite the GS-13 job, her pension isn't all that great, because she didn't have enough years of service in. I think her medical benefits are pretty good though. A lot better than mine will be, I'm sure. :frown:

Big_Hitter 04-24-2015 12:19 PM

my late FIL retired from the foreign service at 52 and went to work for a megacorp in Houston where he worked to 65 - his federal pension was very ample

Teacher Terry 04-27-2015 12:49 PM

My pension after 15 years is $20,000/year. I also did not start until I was 44 so don't rule things out based on your age.


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