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.

 

[Flatrock]

My mistakes were in my younger years. Having too much in one screaming (tech) sector before it crashed, having too much in the funds of one company (This goes back a ways and many may not remember the lesson, but the company was Janus, who at the time held the same exact underlying stocks in most of their funds, just different mixes. Got their hands slapped by the SEC due to a market timing scheme as well--but investors were not made whole.)

Yes I sure do know about Janus. That was the first investment I ever made. Bought it when I was 13 or 14. I mowed lawns for a summer, saved it up and bought the Janus Fund (I was a nerd like that). Even have my statements saved from all the way back then.

 

[BuzzH]

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.

Mine has a COLA...after you reach age 62. But, in the 5+ years before you reach age 62 if you retire at MRA and 30 or 60 and 20....you get the SS supplement which is roughly 80% of your SS at 62.

Pretty decent deal getting to draw SS before 62 though.

 

[Nick87]

Mine has a COLA...after you reach age 62. But, in the 5+ years before you reach age 62 if you retire at MRA and 30 or 60 and 20....you get the SS supplement which is roughly 80% of your SS at 62.

Pretty decent deal getting to draw SS before 62 though.

Guessing thats more of a government thing like @406dn mentioned.

 

[BuzzH]

Guessing thats more of a government thing like @406dn mentioned.

FERS.

 

[Nick87]

FERS.

If we had a COLA I woukd without a doubt go at 55 taking the 15% hit. Still trying my best to. So many guys are going into there 60's because our local is offering big incentives to stay to help with labor shortage. I hope its worth it for them. They are giving up there best years of retirement. Everyone's situation is different, may be hard for me to turn down what could be a significant amount. Enough to change the entire way you retire. I know one thing the local isn’t doing it banking on you collecting more money for a longer time, thats for sure.

 

[BuzzH]

If we had a COLA I woukd without a doubt go at 55 taking the 15% hit. Still trying my best to. So many guys are going into there 60's because our local is offering big incentives to stay to help with labor shortage. I hope its worth it for them. They are giving up there best years of retirement. Everyone's situation is different, may be hard for me to turn down what could be a significant amount. Enough to change the entire way you retire. I know one thing the local isn’t doing it banking on you collecting more money for a longer time, thats for sure.

Yeah, I think it depends on your job. In general I agree, retire as early as possible.

I've spent the last month working in the Black Hills on an 8 on 6 off schedule. Weather has been spectacular this spring, saw and/or heard turkeys gobbling every day, picked up a half dozen elk sheds, etc.

I also enjoy 2-3 horse trips a year at work into the Shoshone, BT, etc. It's still a job, but not sitting behind a desk.

I really like the people I work with and with a skeleton crew, we're a pretty tight bunch that really care about each other. Some of us have been working together for 26+ years. It was tough not taking the buyout last year, but I had it in my mind to retire at 60 with 40 years.

I plan on only working about 9 months my last couple years here, taking off starting October 1. The job won't be getting in the way of hunting season.

 

[Nick87]

Yeah, I think it depends on your job. In general I agree, retire as early as possible.

I've spent the last month working in the Black Hills on an 8 on 6 off schedule. Weather has been spectacular this spring, saw and/or heard turkeys gobbling every day, picked up a half dozen elk sheds, etc.

I also enjoy 2-3 horse trips a year at work into the Shoshone, BT, etc. It's still a job, but not sitting behind a desk.

I really like the people I work with and with a skeleton crew, we're a pretty tight bunch that really care about each other. Some of us have been working together for 26+ years. It was tough not taking the buyout last year, but I had it in my mind to retire at 60 with 40 years.

I plan on only working about 9 months my last couple years here, taking off starting October 1. The job won't be getting in the way of hunting season.

My last 5 years if I do go til 60 I've got some money invested to offset taking off pretty much the entire fall those 5 years. Do that and go til 60 will get me an additional 15% plus 5 more years of contributing credits. Seems like a good trade off. Who knows 15 to 20 years is a long time off still. Work with several guys who are trying to work as many hours as they can those last 5 years when they are pretty tired already. Thats a position I'm trying to avoid and imo probably too little too late anyway.

 

[Nick87]

Then again I've got better chances of not living til 60 then I do drawing most of the tags I applied for this year. Thats a fun way to look at it.

 

[mtmiller]

Mine has a COLA...after you reach age 62. But, in the 5+ years before you reach age 62 if you retire at MRA and 30 or 60 and 20....you get the SS supplement which is roughly 80% of your SS at 62.

Pretty decent deal getting to draw SS before 62 though.

My FERS supplement was based on 28 years of service, so comes out to about 70% of SS at 62. Unfortunately no COLA with it for the next 4+ years. Well done Elon.

 

[Irrelevant]

Man, I can't agree with any of this sympathy for young people. Not when there's so much opportunity (literally EVERYONE is hiring), not when every guy over 16 thinks they're entitled to commute in a $60k full sized new pickup, needs a side by side, a full kuiu kit, it goes on and on...

 

[Bonasababy]

Too risky IMO, when you're gambling with the safety net SS provides.

What happens if the market or investments go to total crap?

You going to tell those that rely on SS that, "oopsie, sorry about that, now you get less"? Not to mention, that right now seems like the absolute worse time in history to try something like you propose with more and more boomers drawing SS.

I've personally been willing to take much more risk with 401's knowing that I have the safety net of SS, rental income, and also a Gov. pension. It's paid off for me in a pretty big way, but even if it didn't, I would still be in much better shape than a vast majority of Americans.

Knowing that lots of Americans would be totally hosed without SS, I would not be comfortable with gambling their futures in the market.

So many people cant grasp this. They make the bad assumption that the poor fate of others wont affect them.

Doesn't work that way.

 

[Bonasababy]

I understand the argument. Even agree with it to some extent. The complaint about SS only investing in US treasuries has been made for a long time. I would point out some similarities in public space, for example life insurance companies are forced to invest based on Risk-based capital exposures. While they can, they rarely hold much in equities because it eats up too much of their risk budget. The reason is the beneficiaries have to be able to rely on that money being there, so states make sure the insurance co doesn't go out of business in an economic downturn. SS is an insurance program at its core.

There have also been arguments that people should be allowed to invest the money as they see fit in their SS account. That idea I laugh at. 1) people are completely unaware of what their risk tolerance really is, and 2) the average person can't manage their own finances for sh*!. So the government does it on a schedule. Problem 1 is eventually someone figures out the schedule and starts front running trades before SS rebalances the accounts. If SS has to outsource to someone like Vanguard, the company still gets a few billion a year in fees, which many will complain about.

The Bush plans big lesson that went unnoticed then and still doesnt get enough recognition is that you cant change the system in that way without a monstrously huge initial outlay of cash. Trillions worth.

Too many think their SS contributions are sitting out there in an account for just them.

 

[Cammy]

My last 5 years if I do go til 60 I've got some money invested to offset taking off pretty much the entire fall those 5 years. Do that and go til 60 will get me an additional 15% plus 5 more years of contributing credits. Seems like a good trade off. Who knows 15 to 20 years is a long time off still. Work with several guys who are trying to work as many hours as they can those last 5 years when they are pretty tired already. Thats a position I'm trying to avoid and imo probably too little too late anyway.

My Father in Law got an actuary fired from the union accounting firm. Not literally but, he went out at 55 and is now almost 90. Guess somebody screwed up on the life expenctacy calculation.

I retired the first time at 40 and my wife told me I needed a second career. At 57 I accepted a buy-out and haven't looked back. Best decision of my life

 

[Bonasababy]

I received an unsolicited email this morning saying I was a participant in a settlement for my previous employer charging too high of fees on 401ks.

Ok. I knew nothing about it. I looked into the settlement. $250,000 divided over 93,000 people. I’m going to get $2.68. I feel like we’re giving it to the man! Lawyers must have gotten some type of return for work done.

Similar thing happened to my wife. I tried to find a way to make out better....I had seen the problem years earlier and talked to/complained to her employer about it.

Workplace plans are ripe for kickbacks and abuse when no one enforces their fiduciary requirements.

What I found is some legal firms know this, and finding a few plaintiffs to sue in a class action where where they make big money while employees get peanuts is a very lucrative gig.

 

[BigHornRam]

Man, I can't agree with any of this sympathy for young people. Not when there's so much opportunity (literally EVERYONE is hiring), not when every guy over 16 thinks they're entitled to commute in a $60k full sized new pickup, needs a side by side, a full kuiu kit, it goes on and on...

Okay curmudgeon!