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401K Matching Starting To GO...  
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2902 posts, RR: 7
Posted (6 years 1 month 3 weeks 3 days 12 hours ago) and read 1526 times:

I came by the following article in USA Today about companies pulling their matching away from their 401K's:

http://www.usatoday.com/money/perfi/...28-pension-401k-match-ending_N.htm

Kind of scary in my opinion. I am 28 years old, so I have another 35 - 40 years to go before I retire, but I wonder what my retirement would look like if this becomes a greater trend. I am concerned for my generation because:

- Most of the money going into social security from us now will be used to support OUR PARENTS who are starting to retire now (my father retired last year, my mother next year, and will be getting Social Security, 401K and 403B...and pension!)

- Both my 401K and ROTH IRA have taken significant nose dives in the last month

- I am contributing what I can into my 401K and ROTH IRA, but I will be honest, if I don't get matching (which I currently do), the amount going into my 401K will be HALF of what it is and I can't afford to put more in...which makes a HUGE difference when you compute the growth over a period of 35 or 40 years

Thoughts out there? Maybe some wisdom from those who are retired or getting ready to...or other folks around my age who are also concerned? Please share!

~H81


"If you do not learn from history, you are doomed to repeat it"
6 replies: All unread, jump to last
 
User currently offlineRFields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 1, posted (6 years 1 month 3 weeks 3 days 12 hours ago) and read 1511 times:

Some thoughts

- while you want to keep a balanced investment - you are too young to be worrrying about short-term performance of stock market based funds. I'm in my late 50's and even with the downturn, the total value of my 401K is about 200% of the actual cash I have invested and my company contributions. Always remember how much you have actually put into the plans, not just growth. By the time you retire, the economy will recover, and fail, and recover a few time.... me on the other hand....

- Yes, your social security payments support your parents, just as their social security payments supported their parents and your children's social security will support you.

All the very dire scenarios require the baby boomers living into their 90's and the birth and immigration rates dropping significantly.

Be more worried about taxes necessary to support a bigger financial nightmare facing the US government - the Pension Guaranty Board and all the pension programs companies have dumped on the taxpayer by filing bankruptcy.

- NEVER stop saving, even if you do not get a match from the company.

These things go in cycles of good times and bad. The key is to not panic and look for your long term goals.


User currently offlinePSA727 From United States of America, joined Feb 2006, 974 posts, RR: 0
Reply 2, posted (6 years 1 month 3 weeks 3 days 9 hours ago) and read 1464 times:

Been there, done that. My company last year went from full company match for the first 2%
and 50% match for the next 2-4% contribution...to 50% match for the first 2% contribution
and that's it. Which is still better than a private retirement account with has no matches.

What worries me is that some Democrats in the House are talking about removing the tax
deferment of 401ks, and making them be like Roth-type of accounts. Not happy about that.



fly high, pay low...Germanwings!
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2902 posts, RR: 7
Reply 3, posted (6 years 1 month 3 weeks 3 days 9 hours ago) and read 1448 times:



Quoting PSA727 (Reply 2):
What worries me is that some Democrats in the House are talking about removing the tax
deferment of 401ks, and making them be like Roth-type of accounts. Not happy about that.

There was a thread only a few days ago on that and I am not entirely thrilled about it either. My way of thinking (in my little own screwed up world) is that they will be getting their taxes when money starts getting pullout out if the 401K and becomes taxable income...so they are getting their taxes, but just a little deferred.

Quoting RFields5421 (Reply 1):
- while you want to keep a balanced investment - you are too young to be worrrying about short-term performance of stock market based funds. I'm in my late 50's and even with the downturn, the total value of my 401K is about 200% of the actual cash I have invested and my company contributions. Always remember how much you have actually put into the plans, not just growth. By the time you retire, the economy will recover, and fail, and recover a few time.... me on the other hand....

I definitely agree with you on that. I am not touching anything when it comes to either account (same amount of monthly contributions, same percentage of stock, etc.).

Quoting RFields5421 (Reply 1):
- Yes, your social security payments support your parents, just as their social security payments supported their parents and your children's social security will support you.

It wasn't too long ago where there was some very serious talk about social security going away, which I guess has always stuck in the back of my mind. Folks around my age are definitely worried that there will be no social security when we get close to our retirement age (or at least the ones that I actually talk to about stuff like this).


Thanks for your input so far crew...keep it comin'!



"If you do not learn from history, you are doomed to repeat it"
User currently offlineMarSciGuy From United States of America, joined Jun 2007, 550 posts, RR: 0
Reply 4, posted (6 years 1 month 3 weeks 3 days 8 hours ago) and read 1431 times:



Quoting B6JFKH81 (Reply 3):
Quoting PSA727 (Reply 2):
What worries me is that some Democrats in the House are talking about removing the tax
deferment of 401ks, and making them be like Roth-type of accounts. Not happy about that.

There was a thread only a few days ago on that and I am not entirely thrilled about it either. My way of thinking (in my little own screwed up world) is that they will be getting their taxes when money starts getting pullout out if the 401K and becomes taxable income...so they are getting their taxes, but just a little deferred.

If you are only 28, you shouldn't be worried about a Roth 401k vs. a traditional 401k...as long as you are planning on making more money when you retire then you are now (a fair assumption I'd wager) you'll be paying more now (paying taxes up front instead of at withdrawl) but gettingg tax free money including all market gains upon retirement. I switched my contributions from a traditional to a Roth earlier this year and although I bring home less now I feel it's worth it.

The company I work for actually just increased their match from 50% of the first 6% to a full match up to 6% and nothing more then that while at the same time removing another retirement plan.

My 2 cents...heck, I just renewed my menbership to reply to this thread!



"There weren't a ton of gnats there where a ton of gnats and their families as well!"
User currently offlineRFields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 5, posted (6 years 1 month 3 weeks 3 days 4 hours ago) and read 1404 times:

I just wish that when I was 28 I had the option of a 401K or IRA.

It wasn't until I was in my 40's that I had those options for tax deferred savings because I was in the military.

Today I have non-tax deferred savings and investments, a nice 401K with a full match up to 6%, and a traditional retirement plan.

The only thing which sucks is that they have announced large layoffs starting in two weeks and my job will certainly be one disappearing.

[Edited 2008-10-29 20:10:39]

User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2902 posts, RR: 7
Reply 6, posted (6 years 1 month 3 weeks 2 days 14 hours ago) and read 1353 times:



Quoting MarSciGuy (Reply 4):
My 2 cents...heck, I just renewed my menbership to reply to this thread!

Welcome back!  bouncy 

Quoting RFields5421 (Reply 5):
The only thing which sucks is that they have announced large layoffs starting in two weeks and my job will certainly be one disappearing.

Wow, dude, I really don't even know what to say other than that is really horrible news and I am truly sorry to hear it. I wish you the very best of luck during that situation.  pray 



"If you do not learn from history, you are doomed to repeat it"
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