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<blockquote data-quote="refineryworker05" data-source="post: 2901892" data-attributes="member: 66082"><p>First of pensions and 401k's are based on the employer promising to pay a part of your compensation into a retirement account just for you the worker. Pensions are not free they aren't gifts, they are the employees money their income which is being set aside and used for their retirement</p><p></p><p>You really don't know much about 401k's. The man who first suggested that 401k's would work for most workers has been heavily criticizing the industry over the design of the 401k and the fees they charge. </p><p></p><p>Here are some links to reality.</p><p></p><p><a href="http://www.morningstar.com/cover/videocenter.aspx?id=599803" target="_blank">Bogle: The Problems With 401(k)s</a></p><p></p><p>John C Bogle who founded Vanguard:</p><p></p><p>Now the problem with 401(k)s are a couple. The big one for me is, it's a thrift plan that we've tried to redesign into a retirement plan. It was never created, the 401(k), to be a retirement plan. So you have all kinds of things that you would not put in a retirement plan, like the ability to take out money when you want to by borrowing, and the ability to make capital withdrawals under certain reasonably extreme circumstances. The ability to take all your money when you move from one job to another, as so many people in America do today. And all that flexibility and letting you have access to your accumulated capital is a <em>terrible</em> way to build up a lifetime retirement plan.</p><p></p><p><a href="http://www.pbs.org/wgbh/frontline/article/john-bogle-the-train-wreck-awaiting-american-retirement/" target="_blank">John Bogle: The "Train Wreck" Awaiting American Retirement</a></p><p></p><p>John C Bogle who founded Vanguard:</p><p></p><p>I start off, simply put, with Social Security, which has to be changed in gradual, small ways to become solvent again. … Then you go to corporate defined benefit plans. They are assuming — and state and local government defined benefit plans even worse — they are all assuming that the market return in their portfolio will be 8 percent a year.</p><p></p><p>There is no way under the sun that they’re going to earn 8 percent. It’s just impossible. No matter what they do, they’re stuck in a bind given the kind of markets we expect in stocks and bonds. … The best they can really hope for is a 5 percent return unless some wonderful, attractive scenario for the future unfolds, which is really unimaginable. If anything, it’s going to be worse.</p><p></p><p>So if you think about them compounding their returns at 4 percent instead of the 8 percent that they build into the plan, they’re going to have to start putting a lot of money into those plans. They’re going to be bankrupt.</p></blockquote><p></p>
[QUOTE="refineryworker05, post: 2901892, member: 66082"] First of pensions and 401k's are based on the employer promising to pay a part of your compensation into a retirement account just for you the worker. Pensions are not free they aren't gifts, they are the employees money their income which is being set aside and used for their retirement You really don't know much about 401k's. The man who first suggested that 401k's would work for most workers has been heavily criticizing the industry over the design of the 401k and the fees they charge. Here are some links to reality. [URL='http://www.morningstar.com/cover/videocenter.aspx?id=599803']Bogle: The Problems With 401(k)s[/URL] John C Bogle who founded Vanguard: Now the problem with 401(k)s are a couple. The big one for me is, it's a thrift plan that we've tried to redesign into a retirement plan. It was never created, the 401(k), to be a retirement plan. So you have all kinds of things that you would not put in a retirement plan, like the ability to take out money when you want to by borrowing, and the ability to make capital withdrawals under certain reasonably extreme circumstances. The ability to take all your money when you move from one job to another, as so many people in America do today. And all that flexibility and letting you have access to your accumulated capital is a [I]terrible[/I] way to build up a lifetime retirement plan. [URL='http://www.pbs.org/wgbh/frontline/article/john-bogle-the-train-wreck-awaiting-american-retirement/']John Bogle: The "Train Wreck" Awaiting American Retirement[/URL] John C Bogle who founded Vanguard: I start off, simply put, with Social Security, which has to be changed in gradual, small ways to become solvent again. … Then you go to corporate defined benefit plans. They are assuming — and state and local government defined benefit plans even worse — they are all assuming that the market return in their portfolio will be 8 percent a year. There is no way under the sun that they’re going to earn 8 percent. It’s just impossible. No matter what they do, they’re stuck in a bind given the kind of markets we expect in stocks and bonds. … The best they can really hope for is a 5 percent return unless some wonderful, attractive scenario for the future unfolds, which is really unimaginable. If anything, it’s going to be worse. So if you think about them compounding their returns at 4 percent instead of the 8 percent that they build into the plan, they’re going to have to start putting a lot of money into those plans. They’re going to be bankrupt. [/QUOTE]
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