Skip to comments.The shape of 401k's to come
Posted on 02/08/2014 4:26:40 AM PST by Libloather
The biggest change will be a new emphasis on retirement readiness, rather than simply getting workers to join a plan and contribute. The idea is to focus on actual retirement outcomes, and it reflects apprehension about the large number of Americans who are approaching retirement unprepared. If that's something you're worried about, it turns out your boss shares your concern.
The 2013 Retirement Confidence Survey by the Employee Benefits Research Institute (EBRI) found that just 13 percent of workers are very confident they will have enough money to live comfortably in retirement.
And a 401k benchmarking survey released last year found that just 12 percent of employers believe that most of their employees will be financially prepared to retire, down from 15 percent in 2011. That survey is conducted annually by Deloitte, the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
(Excerpt) Read more at money.msn.com ...
Hope I planned things right. Old age is not for the foolish.
As long as there is no hyper inflation in the future then you should be good. I say your chances are 50-50.
I plan to keep it in as long as possible using the interest to pay my taxes and fuel bills.
In a lawless environment, possession is everything. - Ann Barnhardt
Socialism Is Legal Plunder
The Law Defends Plunder
Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame, danger, and scruple which their acts would otherwise involve. Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim when he defends himself as a criminal. - Bastiat
Be Prepared - Motto; Boy Scouts
Let us please remember that a Democratic administration limited the amounts a person could contribute to a 401-k or IRA in any given year. Then complained about low savings rates
Retirement as we know it today is a modern invention that was based upon an expectation that greater productivity would enable savings.
The actual facts don’t necessarily support such a picture as indefinitely sustainable. And even many “retired” folks find themselves pursuing something that produces something of economic or spiritual value on the side.
I’ll be bold and assert here that the key to life on earth, once matters of spiritual life are taken care of, is exalting God “in your body,” and money is only one medium of blessing to that end. God doesn’t expect that as one’s body deteriorates, one will be able to work as vigorously at advanced ages as in one’s youth. But one might be able to better apply wisdom and engage in sedentary pursuits that are still gainful.
Rather than retirement planni,ng we probably ought to be talking about career phase planning, and for that matter, economic disaster recovery planning. But that’s just IMHO and YMMV and all that grand alphabet soup of disclaimers :-).
Of all economic theories, I believe I’ve never seen one, even by Christians such as Dave Ramsey, that is squarely built upon the concepts of exalting God and of blessings. I think such a theory would stand an excellent chance of enabling the analysis of otherwise baffling economic scenarios, because it is tied to reality. I’d certainly invite those who are sharper with finances than I am, to advance such theories. One thing you might find is that you don’t need much money to be rich in such an economic view.
For me here are the ‘money’ paragraphs:
“It would be nice to think employers are motivated by altruistic concern about the retirement security of their workers. No doubt, some are - but there’s also a human resources issue here straight out of Adam Smith. Companies are worried that older workers will overstay their welcome. Transamerica even came up with a name for it: Aging Worker Syndrome.
The federal Age Discrimination in Employment Act (ADEA) of 1967 made it illegal to have a mandatory retirement age younger than 65, and the law was amended in 1986 to rule out any mandatory age for most occupations. And in the wake of the last recession, rising numbers of older workers are staying on the job longer - either for the money and the benefits or because they like working. That EBRI report found that 36 percent of workers expect to stay on the job past age 65, up from 11 percent in 1991. Meanwhile, 25 percent of workers expect to retire before age 65 - half as many as in 1991.
Clearly, working longer is one of the best ways to boost long-range retirement security. Every year of additional work can help you delay filing for Social Security (thereby increasing annual benefits when you do file) while allowing you to contribute to your retirement accounts longer and spend fewer years drawing those accounts down for living expenses.
But for employers it raises the prospect of workers staying on the job past the point where they are productive, not to mention higher health care costs. “We don’t want people to have to work longer if they don’t want to,” says Grace Basile, assistant director of market research at Transamerica.”
It’s get out of here before you start costing us to much money in salary and compensation let enough ‘healthcare bennies’.
On a different side of the retirement equation is the constant question - - When are the Feds going to ‘nationalize’ the 401(k)’s? And what can I do to keep from losing all of my money to them?
With the country trillions in debt looming...
Who says Congress won't amend the rules to say they will tax your capital gains at a mere 75 % (like the french) when you pull your money out...instead of the 36 to 42 % now...
I moved 50 % of my retirement 401 K contribution to a Roth 401 K where you are taxed when you contribute verses taxes after years of capital gains...
My returns may be smaller but my tax liability is much less
Yes, and older workers who have been on the job longer have higher salaries than those just starting out. In tech fields younger workers often (though not always) exploit new technologies better, too.
Good for you. Obama’s economy destroyed my savings and reduced my incomd by more than half. I am trying to get on solid footing again and it has’t been easy. With the current job market and my age its not like I can find any sustainable employment. Even the minimum wage job market is flooded with applicants not that I would apply for one of them unless I was in extremely dire citcumstances and was forced to live under someone else’s roof because I sure wouldn’t be able to pay rent, utilities, snd buy food on it with the high cost of living nowadays.
When we are on the edge of national default and no way out...
You know for the "good of the people" and future generations they stole from.../ S
“Let us please remember that a Democratic administration limited the amounts a person could contribute to a 401-k or IRA in any given year. Then complained about low savings rates”
Oh really? I did not know that but it is good to know that. I’ve often complained ‘why is it I cannot contribute more’? I mean, how can you tell people how much they can save?
Well, you need to work your self up to an officer of the corporation and the 401 (K) limits are very different...from the proletariat working class stiff...
Enter the federal retirement program. All your money will be directed to thier account and they will administer it to you at retirement according to what they feel you should have and the rest will go into a slush fund for those who have no retirement or were not responsible enough to think of it. It’s all about fairness
My salary has been essentially flat for four years, but my healthcare costs have more than doubled, among other rising expenses. No way I can contribute more.
That I mean, how can you tell people how much they can save?"
The fundamental issue is tax revenue. That is also why at age 701/2 you have to take out a portion of your 401-k/IRA money even if you do not want to, or be taxed at 50% of what the government says you have to withdraw.
Remember that it was Hillary Clinton who complained about IRA/401-k monies that "it's just sitting there." Totally ignorant about money flows and the multiples it creates.
The government doesn’t limit how much you can save. It DOES limit how much you can shield from income tax. That’s a separate question.
Personally, I think that we should tax consumption rather than income. That would make savings tax deferred until the saver takes money out and spends it. Always liked Pete Domenini’s consumed income tax. Too bad it never got traction on the Hill.
One of the things you don’t hear about these days is that a fear of “age discrimination” lawsuits is driving up health care costs for employers. What you have today is a bizarre, unsustainable employment situation where many companies have a disproportionate number of older workers that are harder to lay off (because of a fear of these lawsuits), and fewer young employees (because the company doesn’t have the need for them). This means the cost of medical coverage gets astronomical as the work force of any given employer ages, because they simply don’t have the premiums of the younger, healthier employees to help support the insurance pool.