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Interesting article about how the Bush Economic Collapse has extinguished the retirement dreams of many young workers. The Chickenhawk Decade screwed an awful lot of people.

http://www.washingtonpost.com/business/economy/young-workers...

The economic downturn is pressing more employers to reduce pension benefits and significantly delaying when people launch their careers, darkening the already bleak picture that young workers face in saving for retirement.

Corporations have been slashing pensions for decades, but such cuts are common now in the public sector, where retirement benefits were traditionally much better. In both cases, employers frequently reach for the same tool — preserve benefits for current employees but make severe cuts for new ones.

</snip>


intercst
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From the article:
Financial planners have long compared retirement security to a three-legged stool supported by Social Security, personal savings and employee pensions. But that stool, never sturdy for many Americans, has grown even more unsteady in recent years.

Employee pensions have all but been eliminated replaced by the failed 401, 403, 457, IRA morass for full-time workers and nothing for part-timers. Now Romney & Ryan want to destroy the Social Security leg too.

PF
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Actually, it's a good example of 'promise them all sorts of benefits' you have no way of paying for - for the last 80 years. Including SS and Medicare. Hey, it works for the first 30-40-50 years..then the programs implode!...the 'progressive way'. Set up programs designed to self implode down the road!

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"The economic downturn is pressing more employers to reduce pension benefits and significantly delaying when people launch their careers, darkening the already bleak picture that young workers face in saving for retirement."


Heck, that started in 1990 when the government changed the tax rules on pensions. Duh!.....and that is when my pension disappeared at MCI and I missed the 'cut off date' for a pension by a year. Instead, I got my former pension money (cash value - not much) stuffed into a new 401K. Those under the 'magic number' no longer had a pension. Those over the magic number (years of service plus age) still were in the pension system.

Unless intercst lives in a parallel universe, Bush wasn't president in 1990!

(he's just like Obama - now 4 years in office and every one of his failure is 'blame BUsh' not me!......

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"Corporations have been slashing pensions for decades,"


Correct!

=======

" such cuts are common now in the public sector,"

about time where unions have bleed tax payers dry, and the promises are so unrealistic that tax rates would have to triple to pay them and pensions would eat up 80% of municipal/state/fed budgets.

Folks like Obama 'protected' them for as long as possible. Now reality has set it - but too late. These folks should have been converted, en masse, to 401Ks back in 1990!

It's 20 years too late!

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"where retirement benefits were traditionally much better."

Says who? If you changed jobs a few times, you wound up with no or piddling pensions. YOu had to work at least 5, sometimes 10 years, with the same employer to get a pension. Leave early, and you got ZIP. Not even your 'money'. Gone.

You were locked in, maybe to a dead end job, for 20-30 years, to collect 'that pensions'.

If you got 'fired' at 50 or 55, you got screwed since most of the pension benefit happened the last 10-15 years - or your pension was based upon your highest salary...so you'd really miss out.


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" In both cases, employers frequently reach for the same tool — preserve benefits for current employees but make severe cuts for new ones"

That's the only thing that current employees would buy into. So?

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"As Washington turns in the coming weeks from the presidential election to the long-term debt issues facing the nation, the discussions will center on whether the country can afford programs such as Social Security and Medicare in their current form."


It's not really a discussion. It can't. The government says so itself.

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" a massive burden for the country that will not be fully evident until the next generation approaches retirement."

Duh! It's obvious they are going to have to SAVE for retirement. What else is new? That's why we have 401Ks and IRAs. THey better use them

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“How the hell do I get ahead?” said Sandra Conchar, 27, director of community relations at Potomac Pizza, a local restaurant chain. “And retirement? Oh, God.”

Try buying a few less Starbucks a week....to start......


Geez.....folks think they are entitled to a Nanny State.

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"Adding to the challenge, the recession forced many young workers to launch their careers later, which reduces their earnings — and their ability to save for retirement — in ways many are unlikely to overcome, analysts say."

No problem for engineering, math, science majors....but I guess Womyn's Gender Study graduates are going to just have to work till the new retirement age of 70 or 72. or even 75 if folks routinely live to 95 or 100.

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" More than half of recent high school graduates are underemployed, as are nearly one in five recent college graduates, according to the Economic Policy Institute."


Which is why you better hope Romney wins today.

t


http://www.washingtonpost.com/business/economy/young-workers...
.
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"Employee pensions have all but been eliminated replaced by the failed 401, 403, 457, IRA morass for full-time workers and nothing for part-timers. Now Romney & Ryan want to destroy the Social Security leg too. "

I don't know about you....but since Obama's been touting 'the recovery of the stock market'....if you have been investing all along, your 401K/IRA should look mighty fine. You've been buying through low stock prices and now that they have gone up 25% or more.....and you've been collecting dividends for all those years...you should be in great shape.

My little 401K , converted to an IRA in 1999 when I left my company, is doing very nicely, thank you. If I had been contributing for the last 12 years....it would be likely over 7 figures by now. About my normal retirement age. Golly gee...and I only started putting money in it in 1990 when the gov't changed the pension rules!

The only thing 'failed' about IRAs/401Ks is folks failing to put the max into it each month.

SOmething called personal responsibility. Just look tot he long lines at Starbucks and all the whiners telling us 'they can't save'. Duh!

When i worked......downtown...I ate breakfast at McD.....back then it was like $2.....and regular coffee...now folks drop $5 or $6 at Starbucks for coffee...when I worked at a place not downtown (like 90% of my career) I ate at home 99% of the time, made my own 20c cup of coffee....and had my second cup at work....for free.


The only thing failed is this generations WILLINGNESS to save, and not go on big borrowing spending binges, and 'have it all' in the first ten years.


That, and the 'progressives' whining that these kids should have to right to pick their neighbors pockets, the neighbors who did save and put away money for retirement.....since the whiners didn't save themselves.



t.
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heh heh


You got even more problems to worry about

------

"More companies are considering so-called annuity settlements as a way to pare down their burgeoning pension liabilities, even though historically low interest rates make the strategy significantly more expensive.

Last month Verizon Communications Inc. VZ -0.02% bought an annuity that transferred $7.5 billion of pension obligations, about a quarter of the phone giant's total pension obligations, to Prudential Financial Inc. PRU -0.05% Over the summer, General Motors Co. GM -0.22% shifted roughly $25 billion of its pension obligations—or about 20% of its global total—to Prudential through an annuity deal.

The approach works like this: a company transfers pension obligations to an insurer by buying a group annuity for its employees at a price that includes a premium. The insurer agrees to use the funds it gets from the company's pension plan to make regular payments to company retirees for as long as they live.

http://online.wsj.com/article/SB2000142405297020475540457810...



---

So what we have is companies offloading existing pension obligations to 'insurance companies'.

You have good solid companies like Verizon and GM, earning billions, with rock solid business (cellphones, etc).....likely to be around for generations....

offloading to 'insurance companies' ..who will 'invest' (think derivatives and hedge funds).....and then pay the retirees.

The companies then have no further pension obligations...no need to keep 'topping them off' to 80% of future obligations.....in downturns of the market.

Meanwhile...since the Pension Guarantee Board insures 'pensions'......the retirees lose that protection.

NOw they have 'annuity contracts'...which can disappear if the insurance company goes bust. Tens of billions of them...and likely they'll get most of the pension obligations of companies over the next deade.


Then when the next crisis hits...all the insurance companies will go 'bankrupt' and retirees will have squat...

Same goes for 'towns'...those pensions will get slashed to near zip when the towns/cities/states go bankrupt.



t.
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"Financial planners have long compared retirement security to a three-legged stool supported by Social Security, personal savings and employee pensions. But that stool, never sturdy for many Americans, has grown even more unsteady in recent years."


That's exactly how my retirement strategy looks. IRA ($479/month) + State of Tennessee Pension ($467/month) + Social Security @ 62 ($809/month) = $1755/month X 12 = $21,064/year........

I'll be filthy rich! I won't know what to do with myself. I see cruise ships, trips to Florida, lord only knows! <grin!>

Artie
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Due to lack of caffeine this morning, I forgot to add the rest of what I was thinking.

Employee pensions have all but been eliminated replaced by the failed 401, 403, 457, IRA morass for full-time workers and nothing for part-timers. Now Romney & Ryan want to destroy the Social Security leg too. Combine that with what globalization and anti-union laws and policies have done to wages and the only thing left of that three-legged stool is the seat. It looks to me like the plan is to do away with retirement and just make it so people work until they can't and then let their over-strapped families and charities take care of them. That worked so well in the past.

PF
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PF:"Employee pensions have all but been eliminated replaced by the failed 401, 403, 457, IRA morass for full-time workers and nothing for part-timers."

You probably needed even more coffee!

Most 401Ks,where the folks actually contributed at least 6 or 8%, are doing just fine. Remember, Obama bragged about how the stock market has recovered..and if you invest at LOWER cost, you did even better, right? Big gains?

And part time workers always have the option of the IRA......

Dems keep telling us 'taxes don't matter'. Well, DUH! - it was a change in tax policy around 1990 that convinced most companies to end traditional pension plans!.......and start 401Ks! Taxes do matter.


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"Now Romney & Ryan want to destroy the Social Security leg too. "

NO..they want to make it sustainable. Obama believes in the money fairy. Already horrendous debt per person and you think that a 'bankrupt country' is going to pay SS?

Debt for everyone - borrowed by Obama - is what, $50,000 per person? And you think they can borrow 20 trillion more to pay the benefits 10-20-30 years out?

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"Combine that with what globalization and anti-union laws and policies have done to wages and the only thing left of that three-legged stool is the seat."

anti-union laws? Oh, you mean the right to work laws that don't coerce 'free people' from having to contribute to the gold plated salaries of their half million a year union bosses, and fund candidates they may not agree with via MANDATORY sucking of 5% of their pay?

Globalization? That's happening regardless of who is in the WH. Learn to embrace it and PROFIT from it.

Yes, folks would rather have their Starbucks today and not save. So?

Company pensions disappeared for most in 1990 when the tax code was changed and rules changed by the Congress. The public sector hung on because the 'time bomb' had not gone off and they were not held to the same accounting standards. They could use 'money fairy' math. Now, reality has set in. PUblic pensions will be gone in a decade.




"It looks to me like the plan is to do away with retirement and just make it so people work until they can't and then let their over-strapped families and charities take care of them. That worked so well in the past."

Actual, going back 200 and 100 years, it did. Nearly every community had 'social organizations'. The Slovenian Clubs and old folks homes. By the tens of thousands throughout the country. There were unions that took care of the 'poor' and where the wage earner died. Almost every family belonged to one, or to a church that supported through major charity.

You're going to have SS for the next 80 years. It's just got to operate differently. It's not going to be as generous to the middle class as it won't have the money.

You've been warned for the last 20 years.

Why is this news now, other than YOU and the PROGRESSIVES are trying to preserve a 20th century model that is failing all over Europe in the 21st century? Where Greek pensions, where they have LESS debt per person than the USA, were cut 90% (their state SS system)? Where the UK has 'unsustainable' benefit levels? Where taxes are 50% of income or more to pay for it all? And it's not enough?


t.
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"Employee pensions have all but been eliminated replaced by the failed 401, 403, 457, IRA morass for full-time workers and nothing for part-timers. Now Romney & Ryan want to destroy the Social Security leg too. Combine that with what globalization and anti-union laws and policies have done to wages and the only thing left of that three-legged stool is the seat. It looks to me like the plan is to do away with retirement and just make it so people work until they can't and then let their over-strapped families and charities take care of them. That worked so well in the past."

So you are saying 'thanks to PRogressive policies' , the standard of living for all will be lower in the future? We've bankrupted ourselves into poverty!

You are right!

16 trillion in his first term. 25 trillion in his second term.

In the future, just the interest on the debt will be more than SS and Medicare combined......so those programs will be gutted.

Obama has borrowed us into financial he*ll.

And you thought that by borrowing, you could improve the economy to pay for it all? joke joke. Failed Keynesian policies. Just the opposite is happening.

You can't borrow your way to prosperity......

Neither personally or the government.

Try maxing out your credit cards and credit lines.....it feels great doing it.....then you hit the wall.

That's the point we're approaching.


t.
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The simple fact is that pension schemes are highly susceptible to being manipulated by politicians, businesses and who ever.

If there is actual money in the system, it's susceptible to being siphoned off for other purposes. If there is no money, retirement schemes tend to be underfunded and consisting largely of promises that aren't going to be fulfilled.

The issue at hand is how to dump public employee pension liabilities. They are unaffordable and will be sharply reduced.

No doubt Democrats will be shedding crocodile tears even while they vote to cut those benefits.

And lets be serious here----

Pension promises were made on the theory that the good times would roll on forever. They haven't. Just as benefits have often been negotiated upward, they are now being negotiated downward to match reality. That's a GOOD thing!



Seattle Pioneer
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That worked so well in the past.

It really did, if you were a robber baron.

--FY
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<< That worked so well in the past.

It really did, if you were a robber baron.

--FY>>



If you can't afford to retire, keep working.

Or depend on your accumulated savings and investments.

No doubt your loving family will care for you as part of the filial duties they have been taught and seen demonstrated by family and religion.

It's only liberalism that has failed.



Seattle Pioneer
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That's exactly how my retirement strategy looks. IRA ($479/month) + State of Tennessee Pension ($467/month) + Social Security @ 62 ($809/month) = $1755/month X 12 = $21,064/year........


curious-- IRAs are usually a pile of money
how is it that yours is a monthly payment


( getting about the same from SS and living quite well)
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"curious-- IRAs are usually a pile of money
how is it that yours is a monthly payment" -- 0x6a74



Yes you are right. That's what my distribution is every year divided by 12 months. I actually take one annual distribution from my IRA every year on my birthday. Nice birthday present huh?

I have been using the 72(t)SEPP thing to take a "substantially equal periodic payment" from my IRA. I got the form in the mail today that I've completed my 72(t). I turned 59 1/2 years old this year.

My plan is to continue taking the same distribution every year because it has worked so well. I've taken on lump sum every year and my account has grown by ~ $20,000.

So far so good on this early retirement adventure. Soon it will no longer be early retirement but just retirement!

Art
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"curious-- IRAs are usually a pile of money
how is it that yours is a monthly payment" -- 0x6a74


Yes you are right. That's what my distribution is every year divided by 12 months. I actually take one annual distribution from my IRA every year on my birthday. Nice birthday present huh?


ok. so it's a number you chose based on
early retire rules ?



So far so good on this early retirement adventure. Soon it will no longer be early retirement but just retirement!


yup Good Luck !
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"ok. so it's a number you chose based on
early retire rules?" - 0x6a74



It's the number I got using intercst's 72(t)SEPP calculator at his website. It's phenomenally close to 4%. Like 3.97% or something like that. Of course over the last 7 years it's changed up and down depending on the value of my IRA but it's stayed pretty close to 4% the whole time.

72(t)SEPP calculator:
http://www.retireearlyhomepage.com/wdraw59.html

The whole way I got into the early retirement was by reading intercst's http://www.retireearlyhomepage.com/ website and then when I was ready to start the 72(t)SEPP distributions I used the calculator on above link. The man is a retire early genius.

So far so good.

Art
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The whole way I got into the early retirement was by reading intercst's http://www.retireearlyhomepage.com/
website



cool

I was to late for early retire...
but still learned stuff from intercst
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The issue at hand is how to dump public employee pension liabilities. They are unaffordable and will be sharply reduced.

No doubt Democrats will be shedding crocodile tears even while they vote to cut those benefits.

And lets be serious here----

Pension promises were made on the theory that the good times would roll on forever. They haven't. Just as benefits have often been negotiated upward, they are now being negotiated downward to match reality. That's a GOOD thing!


Your corporate masters would be so proud of you. It may be completely ignorant babble, totally false, but it's exactly what they want you to say and believe. I can almost see the Koch brothers patting you on your head and praising you for your blind obedience to them. Good boy.
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<<Your corporate masters would be so proud of you. >>


As usual, Salary Guru's exaggerated rhetoric sounds like he's been listing to MSNBC.


Anyone who reads this board regularly sure knows I'm retired and have been for several years, and before that was self employed as a tradesman.

The idea that I have "corporate masters" is ludicrous.



Seattle Pioneer
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I didn't know that public sector unions had 'corporate masters'. Did you?




The gold plated,full of 'escalator clauses', last year 'salary stuffing' tactics are coming to an end. Pensions based upon the 'last years earnings' when folks manage to work 3 years worth of 'hours' in the last year.....getting pensions larger than their actual salaries...is coming to a screeching halt everywhere.

It has to...there won't be enough taxpayer money to pay for it.

Watch IL implode first.....it just elected a super dem house and dem senate.....and is controlled by the dem power brokers....and is horribly broke and going broke even faster by the second.


There's no hope for the state of IL but to default.


t.
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The idea that I have "corporate masters" is ludicrous.

That's just what they want you to think.
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"The idea that I have "corporate masters" is ludicrous."

No, to the libs, it's not.

To them, everyone should have a guaranteed income. If they want to write poetry for self-fulfillment, poetry that no one wants to buy, they should still get a guaranteed federal income. IF they want to investigate 'surfing technology' (ie, go surfing daily), they should get a guaranteed income...plus of course, free ObamaKare.

If you actually 'have' to go to work to 'earn' a living, you are a 'slave' to the 'man'. You are 'owned' by the 'corporate masters' who run all those nasty profit making companies and those greedy capitalistic stock holders who actually expect people to work hard and the company to make money!.

A good quarter of the people in the country believe that and it's spreading fast.

In other words......your earnings are redistributed......if you make money...we'll, you only get to keep 'what you need' and the government defines that. the rest is 'redistributed' so everyone has 'an income' for whatever they do or don't do.

With unemployment for years - we are almost there.


I wouldn't bet a nickel as to whether unemployment will be extended for another 5 years for those unfortunate unemployed people......as part of the 'tax deal'.....

Permanent pay for not working - in the works....



t.
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