Anybody Buying Yet? Where’s the Bottom?

[Cammy]

Pensions that are not annually adjusted via COLA are worthless. I remember hearing stories about persons back in the 70's retiring from the big 3 auto makers with pensions of $450.00 per month after 30 years. They thought the slayed a fat hog back then.

If you have an annually adjusted pension now, you are ahead of many retirees because you need to have saved less for the same benefit. Regardless of what might have been, save as hard as you can wherever you are in your career. Max out 401k's if available as well as IRA's when you can. Get out and stay out of debt the sooner the better.

 

[Nick87]

Pensions that are not annually adjusted via COLA are worthless. I remember hearing stories about persons back in the 70's retiring from the big 3 auto makers with pensions of $450.00 per month after 30 years. They thought the slayed a fat hog back then.

If you have an annually adjusted pension now, you are ahead of many retirees because you need to have saved less for the same benefit. Regardless of what might have been, save as hard as you can wherever you are in your career. Max out 401k's if available as well as IRA's when you can. Get out and stay out of debt the sooner the better.

Is that a thing? In all the different trades I'm familiar with none of them have a COL adjustment on there pensions. At least locally to me.

 

[Dave N]

Is that a thing? In all the different trades I'm familiar with none of them have a COL adjustment on there pensions. At least locally to me.

Same.

 

[jryoung]

Pensions that are not annually adjusted via COLA are worthless. I remember hearing stories about persons back in the 70's retiring from the big 3 auto makers with pensions of $450.00 per month after 30 years. They thought the slayed a fat hog back then.

If you have an annually adjusted pension now, you are ahead of many retirees because you need to have saved less for the same benefit. Regardless of what might have been, save as hard as you can wherever you are in your career. Max out 401k's if available as well as IRA's when you can. Get out and stay out of debt the sooner the better.

Pensions are a defined benefit plan. Contributions are made and grown to reach that defined benefit.

On the flip side, 401k is and IRAs are defined contributions....those defined abouts/limits do increase regurlarly

 

[406dn]

Without a doubt, a monthly pension check that does not include a cola will become significantly diminished during a retirement. My wife's pension includes a cola. She has state pension. I suspect the vast majority of of pensions that do have a cola are government pensions.

Some employers, including mine, offer a lump sum option for your retirement benefit. An employer has to meet certain pension funding regulations to be able to offer a lump sum. Many employers are lagging in the funding their pension plan. I won't infer anything nefarious, but it could easily be a willful avoidance of a financial obligation.

I know quite a few coworkers who took the lump sum and did not manage it well. Some even had to return to the workforce. I also know many that have done really well financially in retirement.

I empathize with younger workers. Most will have multiple employers in their working life. Most employers offer a 401k with an inadequate match. Many 401k plans have fees that enrich the plan administrators too generously and erode the growth of an individual's account.