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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75824  
Subject: Re: 401K is not employer matched Date: 5/15/2010 1:10 AM
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I don't. I think you should find balance because there's no guarantee you'll make it to retirement.

Sure. To each his own.

But I think the trends are clear. Those who went to work in the post World War II era often worked for companies that believed in lifetime employment and providing pensions for their workers. At age 65, they collected good pensions and Social Security was worth something.

To make up for declines in the buying power of Social Security, the baby boomers (the post Viet Nam generation) also got 401Ks and IRAs to help us fund retirement. But increasingly companies are abandoning their defined benefit pension plans and replacing them with 401K plans or related defined contribution plans. Few of my generation makes it to retirement with full pensions. Pensions from earlier employers got rolled over into IRAs, but you lost the inflation protection that comes from benefits based on years of service multiplied by final average salary.

For the next generation it will be even worse. Social Security may be unavailable, highly taxed or not worth much. Some pensions will still be available, but the number of private industry workers who retain them will be smaller. Employees of public agencies or those with strong unions might do best off but look at General Motors and the UAW. I wouldn't call those pensions secure.

Everyone must decide for themselves. But those who fail to save enough in the next generation may never be able to retire. Presumably they will be working as long as they are able and then end up on welfare. This is sad. We could be looking at another generation of poor farms--that we have not seen for over 50 years.

Go ahead and make your choices. It's all up to you to pull it off. But those who fail to save enough are casting their lot on others. Will children or Uncle Sugar provide for you, or will you starve?
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