Retirement Plan

[Unkotare]

??? Isn't everyone by the time they retire -- not stop working, retire -- independently wealthy enough, even if not a multimillionaire, that they can afford themselves without having to work?

I'm 42, married, and just bought a home. I do not expect that my pension will exist in another 20+ years. Under that circumstance, there is no way I could ever consider retiring.

Very interesting point. I worked with people over 50. That is not retirement age, never has been, but it is evident, that the brain function slows down. By the time of age 60, they can only do work at their own pace. This is true, even if the work contains nothing new, and it is repetitive. Even if it is as simple as financial sales or real estate.

This too is changing, however. People are not only living longer, but living longer better.

Al Sharpton (?) wrote a book titled "Rush Limbaugh is a big fat idiot". In that book, there is a chapter called something like "oh the nursing home". It starts by saying, that the life expectancy will soon be around 150 years, out of which your first 50 will be good, second 50 will be not so good, and 3rd 50 will be absolutely horrible.

People will be living longer, but the word better is dubious, because the slower brain function is already putting them at a definite disadvantage compared to their competitors worldwide. Especially considering the huge extra number of ~ 20 year olds in almost every 3rd world country.

The "slowing" part is also changing. And I'll take an educated, experienced man or woman over some uneducated, inexperienced person in your generic 3rd world country.

 

[anotherlife]

Very interesting point. I worked with people over 50. That is not retirement age, never has been, but it is evident, that the brain function slows down. By the time of age 60, they can only do work at their own pace. This is true, even if the work contains nothing new, and it is repetitive. Even if it is as simple as financial sales or real estate.

This too is changing, however. People are not only living longer, but living longer better.

Al Sharpton (?) wrote a book titled "Rush Limbaugh is a big fat idiot". In that book, there is a chapter called something like "oh the nursing home". It starts by saying, that the life expectancy will soon be around 150 years, out of which your first 50 will be good, second 50 will be not so good, and 3rd 50 will be absolutely horrible.

People will be living longer, but the word better is dubious, because the slower brain function is already putting them at a definite disadvantage compared to their competitors worldwide. Especially considering the huge extra number of ~ 20 year olds in almost every 3rd world country.

I agree that living well and productively is more appealing than is living longer.

The idea of "Obama death panels" is invented by those retirees who don't work at all and live comfortably on their 401k/IRA investments, an option no longer inflatable for the workers of the 21st century.

You realize I'm not going to respond in substance to catchpenny rhetoric like that, right?

I wanted to cover that huge and complicated subject with a one liner. Bottom line is that you need to be employed to collect those employer matched contributions to actually build your pension. But it is the very same pension that demands that your job goes away for automation or 3rd world penny labor. This locks you out and makes you entire strategy useless, a zero sum game. This is an economic and mathematical fact, even if you hate its language. This is always true when a profession is so wide spread that it is a commodity, such as teacher, metal worker, or 401k account holder.

By the way, the 401k/IRA was an invention for only a small class of executives, not for everyone, for this very reason. It is Ronald Reagan with his woodoo economy who broke it and gave it to everyone. So welcome to this zero sum and to all the stupid bubbles that it has already created.

 

[anotherlife]

Teachers pensions will suffer same fate as teamster pensions........

Yes and it will bankrupt the teaching profession the same way as the teamster pension bankrupted the teamsters. ... Wait the teachers are also tax sponsored, so that will bankrupt every taxpayer too. Yeeppeeee.

teamster pension was stolen......plain and simple by the union boss'..........it will be the end of the teamsters though I agree......try hiring people when they know the pension wont be there........those days are here......and so the end is near

Very interesting. This theft aspect makes it even worse. Nationally, how will we put away all the 40++ year olds that can't outrun the 20 year olds any more? Sure they will not mug old ladies and will not start riots, but still, where will the country put them? Especially if now they live longer? A dilemma.

 

[anotherlife]

??? Isn't everyone by the time they retire -- not stop working, retire -- independently wealthy enough, even if not a multimillionaire, that they can afford themselves without having to work?

I'm 42, married, and just bought a home. I do not expect that my pension will exist in another 20+ years. Under that circumstance, there is no way I could ever consider retiring.

Very interesting point. I worked with people over 50. That is not retirement age, never has been, but it is evident, that the brain function slows down. By the time of age 60, they can only do work at their own pace. This is true, even if the work contains nothing new, and it is repetitive. Even if it is as simple as financial sales or real estate.

This too is changing, however. People are not only living longer, but living longer better.

Al Sharpton (?) wrote a book titled "Rush Limbaugh is a big fat idiot". In that book, there is a chapter called something like "oh the nursing home". It starts by saying, that the life expectancy will soon be around 150 years, out of which your first 50 will be good, second 50 will be not so good, and 3rd 50 will be absolutely horrible.

People will be living longer, but the word better is dubious, because the slower brain function is already putting them at a definite disadvantage compared to their competitors worldwide. Especially considering the huge extra number of ~ 20 year olds in almost every 3rd world country.

The "slowing" part is also changing. And I'll take an educated, experienced man or woman over some uneducated, inexperienced person in your generic 3rd world country.

This makes sense, but existing corporate practice worldwide has hard data, that they also advertise at every university, that the lifetime of converting any degree into full work experience is maximum 4 years. This means, that after 4 years, my professional skills are considered equal to everyone, including the guys with 30 year employment record.

So, a 3rd world new graduate, who asks for maximum 1/4 of the salary of an American worker is a better proposition for the private corporate sector. And usually they ask for a lot less than 1/4 because of the currency exchange rates.

 

[Unkotare]

[...

So, a 3rd world new graduate,....

Graduate of what?

 

[anotherlife]

[...

So, a 3rd world new graduate,....

Graduate of what?

Usually engineering and science, but I think this is even more true for all the other subjects.

 

[320 Years of History]

This too is changing, however. People are not only living longer, but living longer better.

Al Sharpton (?) wrote a book titled "Rush Limbaugh is a big fat idiot". In that book, there is a chapter called something like "oh the nursing home". It starts by saying, that the life expectancy will soon be around 150 years, out of which your first 50 will be good, second 50 will be not so good, and 3rd 50 will be absolutely horrible.

People will be living longer, but the word better is dubious, because the slower brain function is already putting them at a definite disadvantage compared to their competitors worldwide. Especially considering the huge extra number of ~ 20 year olds in almost every 3rd world country.

I agree that living well and productively is more appealing than is living longer.

The idea of "Obama death panels" is invented by those retirees who don't work at all and live comfortably on their 401k/IRA investments, an option no longer inflatable for the workers of the 21st century.

You realize I'm not going to respond in substance to catchpenny rhetoric like that, right?

I wanted to cover that huge and complicated subject with a one liner. Bottom line is that you need to be employed to collect those employer matched contributions to actually build your pension. But it is the very same pension that demands that your job goes away for automation or 3rd world penny labor. This locks you out and makes you entire strategy useless, a zero sum game. This is an economic and mathematical fact, even if you hate its language. This is always true when a profession is so wide spread that it is a commodity, such as teacher, metal worker, or 401k account holder.

Red:
Okay. TY for saying so. We both know well that the subject at hand is not one well suited to a "tweet." That's good. So, moving on....

Blue:
Well, without question, having/performing compensated work is essential if one lacks "built in" wealth that can sustain one in one's later years. You'll note that I used the word "work" rather than employment. That's because we're talking about retirement and retirement planning. Being a business owner rather than employee presents a different planning model and different requirements/options, even though employees and owners may often do much the same work.

??? The employer matching is certainly a boon, but it's hardly critical to building a sufficiently large 401k retirement balance. Just thinking about the matching terms I can recall from years back and helping clients (Fortune 500) implement accounting technologies that accounted for 401k programs, the matching was typically a Y% match up to X% of an employee's wages/salary which vested on an annually rolling basis after Z years. That even today is the model my own firm uses. As it is a match of what the employee contributed, the overwhelming majority of funds deposited into one's 401k account is still the employee's wages, not the employer's contribution/match. Not sure therefore why you brought the employer matching into the discussion...???

Pink:
I'm sorry. Can you please explain what you mean by that? What about a pension demands that a job goes away as a result of automation or cheaper labor from other sources?

Green:
There's no question that as a type of work shifts from being differentiated work to commoditized work, employers pay less for that work. That's so for all goods and services and it's why sellers of "everything" do their level best to operate as monopolistic competitors rather than perfect competitors (commodity sellers). Even sellers of commodities try to do so. For instance, even though everyone knows that C12-H22-O11 is the same no matter the name on the bag, sellers attempt to convince buyers that somehow theirs is in some small way "better" -- dried more thoroughly thus fewer lumps or whatever -- than their competitors.

Labor is no different. I have an MBA, but if I'm applying for a job as a Burger King cashier, all my MBA-related skills are irrelevant, and the employer will not pay for them. All the employer wants to buy from me is my checkout counter skills and those skills are commodity skills - that is, they are neither better nor worse so long as a "normal" individual performs them.

It's a wholly different matter when I'm presenting my firm's proposal to, say, AT&T to manage for them the integration of DirecTV. In that situation, my experience with telecom and media from the administrative, operational, infrastructure and content sides, that I've managed other global integration projects and 100+ country deployments, strategy and operational alignments and transformations, that I've managed teams comprised of 300+ people working collaboratively, etc., that other key members of my proposed team have "this and that" specifically applicable experience, and the rapport I build with AT&T's execs and key program leaders shows me in their eyes to be highly compatible with their company culture, thus easy for them to work with...well, all those things are what differentiate us from the principals at our competitors' firms who vie for the same engagement. Because the "employer" places a high value on those things, because they do not see them as existing among our competitors for the contract, they will pay dearly for them, and believe me, they do.

Of course, one does now start a career as anything but a commodity. That's precisely what I was on day one of my career. Over time, however, one develops a set of distinguishing competencies and a track record of success and in doing so, one becomes a unique product that buyers demand and will pay top dollar to obtain. And you know what, one's retirement situation will be quite secure if one effectively develops one's career.

My mentees have to a person asked me about how to build a career like that for oneself, not necessarily in consulting, but in general. I tell them what I'm going to write here. It's not something one does as an event. It's a process and that process -- unless one benefits from having some special "in," like a parent who owns a company or who gives one a fat check to start one's own -- begins approximately when one is in the seventh grade. If one's not gotten it on the right track, so to speak, by the time one is 28-32, barring great luck, it's just not going to happen. Of course, there's still the upside: if one does get going around the 7th or 8th grade, by the time one is an junior in college, it's pretty much on "autopilot" no matter how vast the market in which one "plays," and one must "work hard" to screw it up, that is, to make oneself revert to being a commodity, rather than a unique "product," in the labor market.

 

[320 Years of History]

This makes sense, but existing corporate practice worldwide has hard data, that they also advertise at every university, that the lifetime of converting any degree into full work experience is maximum 4 years. This means, that after 4 years, my professional skills are considered equal to everyone, including the guys with 30 year employment record.

So, a 3rd world new graduate, who asks for maximum 1/4 of the salary of an American worker is a better proposition for the private corporate sector. And usually they ask for a lot less than 1/4 because of the currency exchange rates.

Red:
Oh, hell no! What world are you imagining, corporate or otherwise?

There's not one client or colleague or even competitive peer in the whole of management consulting who'd say that after four years some consultant or senior consultant's skills are the peer of the directors, partners/principals, and other 20+ year practitioners. That's patently obvious in, if nothing else, the billing rates commanded by each of those practitioners.

The same can be said of attorneys, doctors, accountants, architects, engineers, investment bankers, stock brokers, actuaries, financial planners, actors, singers, composers/musicians, software developers, watchmakers, race car drivers, jockeys, basketball players, psychologists, researchers, professors, police officers, soldiers, business managers, and on and on and on. (Keep in mind that for some of those pursuits, one can begin them in substance well before becoming 21 or finishing school/college.)

 

[Unkotare]

[...

So, a 3rd world new graduate,....

Graduate of what?

Usually engineering and science,.....

In 3rd world countries? Which ones?

 

[Anathema]

. By the way, the 401k/IRA was an invention for only a small class of executives, not for everyone, for this very reason. It is Ronald Reagan with his woodoo economy who broke it and gave it to everyone. So welcome to this zero sum and to all the stupid bubbles that it has already created.

True, but back then the blue collar worker looked forward to the now nearly nonexistant Pension as their means for retirement. When Pensions died, the companies had to replace them with something.

 

[anotherlife]

Al Sharpton (?) wrote a book titled "Rush Limbaugh is a big fat idiot". In that book, there is a chapter called something like "oh the nursing home". It starts by saying, that the life expectancy will soon be around 150 years, out of which your first 50 will be good, second 50 will be not so good, and 3rd 50 will be absolutely horrible.

People will be living longer, but the word better is dubious, because the slower brain function is already putting them at a definite disadvantage compared to their competitors worldwide. Especially considering the huge extra number of ~ 20 year olds in almost every 3rd world country.

I agree that living well and productively is more appealing than is living longer.

The idea of "Obama death panels" is invented by those retirees who don't work at all and live comfortably on their 401k/IRA investments, an option no longer inflatable for the workers of the 21st century.

You realize I'm not going to respond in substance to catchpenny rhetoric like that, right?

I wanted to cover that huge and complicated subject with a one liner. Bottom line is that you need to be employed to collect those employer matched contributions to actually build your pension. But it is the very same pension that demands that your job goes away for automation or 3rd world penny labor. This locks you out and makes you entire strategy useless, a zero sum game. This is an economic and mathematical fact, even if you hate its language. This is always true when a profession is so wide spread that it is a commodity, such as teacher, metal worker, or 401k account holder.

Red:
Okay. TY for saying so. We both know well that the subject at hand is not one well suited to a "tweet." That's good. So, moving on....

Blue:
Well, without question, having/performing compensated work is essential if one lacks "built in" wealth that can sustain one in one's later years. You'll note that I used the word "work" rather than employment. That's because we're talking about retirement and retirement planning. Being a business owner rather than employee presents a different planning model and different requirements/options, even though employees and owners may often do much the same work.

??? The employer matching is certainly a boon, but it's hardly critical to building a sufficiently large 401k retirement balance. Just thinking about the matching terms I can recall from years back and helping clients (Fortune 500) implement accounting technologies that accounted for 401k programs, the matching was typically a Y% match up to X% of an employee's wages/salary which vested on an annually rolling basis after Z years. That even today is the model my own firm uses. As it is a match of what the employee contributed, the overwhelming majority of funds deposited into one's 401k account is still the employee's wages, not the employer's contribution/match. Not sure therefore why you brought the employer matching into the discussion...???

Pink:
I'm sorry. Can you please explain what you mean by that? What about a pension demands that a job goes away as a result of automation or cheaper labor from other sources?

Green:
There's no question that as a type of work shifts from being differentiated work to commoditized work, employers pay less for that work. That's so for all goods and services and it's why sellers of "everything" do their level best to operate as monopolistic competitors rather than perfect competitors (commodity sellers). Even sellers of commodities try to do so. For instance, even though everyone knows that C12-H22-O11 is the same no matter the name on the bag, sellers attempt to convince buyers that somehow theirs is in some small way "better" -- dried more thoroughly thus fewer lumps or whatever -- than their competitors.

Labor is no different. I have an MBA, but if I'm applying for a job as a Burger King cashier, all my MBA-related skills are irrelevant, and the employer will not pay for them. All the employer wants to buy from me is my checkout counter skills and those skills are commodity skills - that is, they are neither better nor worse so long as a "normal" individual performs them.

It's a wholly different matter when I'm presenting my firm's proposal to, say, AT&T to manage for them the integration of DirecTV. In that situation, my experience with telecom and media from the administrative, operational, infrastructure and content sides, that I've managed other global integration projects and 100+ country deployments, strategy and operational alignments and transformations, that I've managed teams comprised of 300+ people working collaboratively, etc., that other key members of my proposed team have "this and that" specifically applicable experience, and the rapport I build with AT&T's execs and key program leaders shows me in their eyes to be highly compatible with their company culture, thus easy for them to work with...well, all those things are what differentiate us from the principals at our competitors' firms who vie for the same engagement. Because the "employer" places a high value on those things, because they do not see them as existing among our competitors for the contract, they will pay dearly for them, and believe me, they do.

Of course, one does now start a career as anything but a commodity. That's precisely what I was on day one of my career. Over time, however, one develops a set of distinguishing competencies and a track record of success and in doing so, one becomes a unique product that buyers demand and will pay top dollar to obtain. And you know what, one's retirement situation will be quite secure if one effectively develops one's career.

My mentees have to a person asked me about how to build a career like that for oneself, not necessarily in consulting, but in general. I tell them what I'm going to write here. It's not something one does as an event. It's a process and that process -- unless one benefits from having some special "in," like a parent who owns a company or who gives one a fat check to start one's own -- begins approximately when one is in the seventh grade. If one's not gotten it on the right track, so to speak, by the time one is 28-32, barring great luck, it's just not going to happen. Of course, there's still the upside: if one does get going around the 7th or 8th grade, by the time one is an junior in college, it's pretty much on "autopilot" no matter how vast the market in which one "plays," and one must "work hard" to screw it up, that is, to make oneself revert to being a commodity, rather than a unique "product," in the labor market.

Very interesting. By the way, the "pink" pension -> automation/3rdWorld meant that your 401k/IRA must maximize its profit margin. The way profit margins are maximized is to eliminated labor and jobs. Including yours which ends the same 401k contributions that caused it. You lose, the 401k wins, can whistle for the pension.

 

[anotherlife]

This makes sense, but existing corporate practice worldwide has hard data, that they also advertise at every university, that the lifetime of converting any degree into full work experience is maximum 4 years. This means, that after 4 years, my professional skills are considered equal to everyone, including the guys with 30 year employment record.

So, a 3rd world new graduate, who asks for maximum 1/4 of the salary of an American worker is a better proposition for the private corporate sector. And usually they ask for a lot less than 1/4 because of the currency exchange rates.

Red:
Oh, hell no! What world are you imagining, corporate or otherwise?

There's not one client or colleague or even competitive peer in the whole of management consulting who'd say that after four years some consultant or senior consultant's skills are the peer of the directors, partners/principals, and other 20+ year practitioners. That's patently obvious in, if nothing else, the billing rates commanded by each of those practitioners.

The same can be said of attorneys, doctors, accountants, architects, engineers, investment bankers, stock brokers, actuaries, financial planners, actors, singers, composers/musicians, software developers, watchmakers, race car drivers, jockeys, basketball players, psychologists, researchers, professors, police officers, soldiers, business managers, and on and on and on. (Keep in mind that for some of those pursuits, one can begin them in substance well before becoming 21 or finishing school/college.)

I wrote what human resource representatives and corporate executives announce at university during hiring presentations. I do suspect it is bull, but 99 % of us believe them. This is what they declare.

 

[Skull Pilot]

http://www.nytimes.com/2016/10/23/your-money/403-b-retirement-plans-fees-teachers.html?_r=0


Despite the easy-target sniping about teachers, many are not facing the most comfortable retirements.

not my problem if those idiots can't save for retirement

 

[anotherlife]

[...

So, a 3rd world new graduate,....

Graduate of what?

Usually engineering and science,.....

In 3rd world countries? Which ones?

Do you mean which 3rd world country has engineering and science graduates, or which 3rd world country has a high proportion of young citizens?

 

[anotherlife]

. By the way, the 401k/IRA was an invention for only a small class of executives, not for everyone, for this very reason. It is Ronald Reagan with his woodoo economy who broke it and gave it to everyone. So welcome to this zero sum and to all the stupid bubbles that it has already created.

True, but back then the blue collar worker looked forward to the now nearly nonexistant Pension as their means for retirement. When Pensions died, the companies had to replace them with something.

You know, looks like it is coming around full circle. The smart asses that everyone idolizes for privatizing pensions, starting with Reagan, have succeeded in eliminating and killing off pension as such. It is then only the 19th century Bissmarck, the founding father of all pensions, who was right. He said that pensions must be an annuity that is undersigned by only the single ultimate undersigner of the land. So now, when bank secrecy has been just traded for blind national loan guarantees, this leads us back to the idea of state pension or national pension, as the only viable system. Still tough though, because nations and states don't have the financial base and age statistics any more to restart themselves.

 

[anotherlife]

http://www.nytimes.com/2016/10/23/your-money/403-b-retirement-plans-fees-teachers.html?_r=0


Despite the easy-target sniping about teachers, many are not facing the most comfortable retirements.

not my problem if those idiots can't save for retirement

Don't worry, they can still hike your property taxes to cover their shortfall. Or they will cut kindergarten and extracurricular programs, halving you home's sales price. You don't win this easy, hehe.

 

[320 Years of History]

By the way, the "pink" pension -> automation/3rdWorld meant that your 401k/IRA must maximize its profit margin. The way profit margins are maximized is to eliminated labor and jobs.

??? Excuse me? Do you realize just how absurd is what you wrote there? Pensions cannot maximize profit by eliminating the jobs of those who contribute to the pension/401k. Were a pension/401k plan (or its existence) to necessarily lead to the elimination of the jobs held by workers who contribute to the pension, the pension itself would cease to exist.

Truly, it's not even clear whether you are talking about the actual 401k plan itself or the various investments in the plan when you refer to profitability and cost minimization/profit maximization.

 

[Anathema]

You know, looks like it is coming around full circle. The smart asses that everyone idolizes for privatizing pensions, starting with Reagan, have succeeded in eliminating and killing off pension as such. It is then only the 19th century Bissmarck, the founding father of all pensions, who was right. He said that pensions must be an annuity that is undersigned by only the single ultimate undersigner of the land. So now, when bank secrecy has been just traded for blind national loan guarantees, this leads us back to the idea of state pension or national pension, as the only viable system. Still tough though, because nations and states don't have the financial base and age statistics any more to restart themselves.

I am not and would not be in favor of a Government Pension system. That's why I won't take any money from SS or Medicare.

 

[320 Years of History]

This makes sense, but existing corporate practice worldwide has hard data, that they also advertise at every university, that the lifetime of converting any degree into full work experience is maximum 4 years. This means, that after 4 years, my professional skills are considered equal to everyone, including the guys with 30 year employment record.

So, a 3rd world new graduate, who asks for maximum 1/4 of the salary of an American worker is a better proposition for the private corporate sector. And usually they ask for a lot less than 1/4 because of the currency exchange rates.

Red:
Oh, hell no! What world are you imagining, corporate or otherwise?

There's not one client or colleague or even competitive peer in the whole of management consulting who'd say that after four years some consultant or senior consultant's skills are the peer of the directors, partners/principals, and other 20+ year practitioners. That's patently obvious in, if nothing else, the billing rates commanded by each of those practitioners.

The same can be said of attorneys, doctors, accountants, architects, engineers, investment bankers, stock brokers, actuaries, financial planners, actors, singers, composers/musicians, software developers, watchmakers, race car drivers, jockeys, basketball players, psychologists, researchers, professors, police officers, soldiers, business managers, and on and on and on. (Keep in mind that for some of those pursuits, one can begin them in substance well before becoming 21 or finishing school/college.)

I wrote what human resource representatives and corporate executives announce at university during hiring presentations. I do suspect it is bull, but 99 % of us believe them. This is what they declare.

I can't speak to what share of what you've hear is BS, but I can assure you that if someone told you that a 4-year practitioner is seen as equivalent to a 30-year or even 20-year one in terms of their work skills, professional acumen and the like, well, they either misspoke or were on some really good drugs. Now if they were talking about vesting in benefits, or something else unrelated to actual skills and job-related capabilities, what they said may well be true, but not knowing what the specific topic was, I cannot say.

To see further evidence of the veracity of what I'm saying, one need only look at any number of job announcements for which varying years of experience is required. Employers wouldn't demand 5 years for some positions, 10 years for others, and so on were there truly no perceived difference between having practiced in a discipline for four years and for 30 years.

 

[anotherlife]

By the way, the "pink" pension -> automation/3rdWorld meant that your 401k/IRA must maximize its profit margin. The way profit margins are maximized is to eliminated labor and jobs.

??? Excuse me? Do you realize just how absurd is what you wrote there? Pensions cannot maximize profit by eliminating the jobs of those who contribute to the pension/401k. Were a pension/401k plan (or its existence) to necessarily lead to the elimination of the jobs held by workers who contribute to the pension, the pension itself would cease to exist.

Truly, it's not even clear whether you are talking about the actual 401k plan itself or the various investments in the plan when you refer to profitability and cost minimization/profit maximization.

Yes. It zeros itself. It must, by simple laws of maths. Reagan's life work is a bubble.