We put a stop to that practice here
Why a 401(k) Will Yield You More Money Than a Pension
- Thread starter ThePackageDeli
- Start date
Thebrownblob
Well-Known Member
Same, with the amount of route cutting and laying off, there’s absolutely no excuse for the company to allow it or a union member to participate in it
We haven't allowed that here for the past couple years because the company abused it
PT Car Washer
Well-Known Member
They don't. Only on an exception.
Brownslave688
You want a toe? I can get you a toe.
If the union would negotiate money into our 401k over pension plans that would be much better for everyone.Hypothetical example:
John begins UPS on Jan 1, 2020 and retires on Jan 1, 2055, at age 65.
Under the current pension plan, John's 35 years of service entitle him to roughly $70,000/yr (- taxes) beginning at age 65.
If John lives to be 85, he will have earned roughly $1.4 million(- taxes) in pension income during his lifetime.
-vs.-
If John fully invests his 401(k) from 2020 to 2055, he will have contributed roughly $787,500.
If John's investment grows at 5% for 35 years, his 401(k) account value at age 65 will be roughly $2,130,000 (that's nearly $1.4 million in earnings)
The real question you want to ask yourself is this:
Would I rather earn $1.4 million in taxable income by age 85, or would I rather have $1.4 million of taxable income in my account by age 65?
This is why I would rather have a 401(k) match over a pension.
These numbers get even sweeter when you factor in a company match for 35 years, holy.
The pension is a freaking scam you guys. It's corporate welfare for dummies with no financial discipline.
It does so many things. Puts you in control. Gives you better returns. You have access to all of the money at once. You can pass it on to kids.
Thebrownblob
Well-Known Member
Over 900 hours already this year for a part timer sounds like a lot of exceptions. Sounds like continual
At the end of this month 1,040 hours would be considered full time
Thebrownblob
Well-Known Member
Another potential full-time pension and full-time job stolen
Absolutely
UnionStrong
Sorry, but I don’t care anymore.
He should be shunned. Anyone that openly aids and abets management.
Up In Smoke
Well-Known Member
In the example provided, the 401k match would only equal 7 years of pension withdrawals. The match would only be better if you passed away with no survival benefit before 7 years.
Brownslave688
You want a toe? I can get you a toe.
Everyone always talks about a match. It doesn’t have to be a match. It can just be money they put in on our behalf. No strings attached.
Also the example was a really low 5% returns. Historically you’re looking at at least 7-8%.
I’m going to have close to a million dollars put into my pension on my behalf by the time I retire. I’m going to need to live at least 20 years into retirement just to get those funds back. Not including any growth.
With a 401k it’s going to be way more money and it’s going to all be available upon retirement.
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PT Car Washer
Well-Known Member
Midwest work ethic. You wouldn't understand.
reginald95
Well-Known Member
Since I went driving 11 years ago, I maxed out my 401K. It's grown exponentially and I got about another 20 years left till I can retire. Pension will be side money for me as well as SS once I reach that age.
Pensions are good because I bet at least half of our workforce hasn't even opened up a 401K. People don't really invest in their future on their own. If we got rid of the pension, everyone would be crying poor once they realize they will have when they retire or have to work longer than they'd like.
Pensions are good because I bet at least half of our workforce hasn't even opened up a 401K. People don't really invest in their future on their own. If we got rid of the pension, everyone would be crying poor once they realize they will have
when they retire or have to work longer than they'd like.PT Car Washer
Well-Known Member
I have been maxing out my 401k for over 30 years. I just keep working for the entertainment.Since I went driving 11 years ago, I maxed out my 401K. It's grown exponentially and I got about another 20 years left till I can retire. Pension will be side money for me as well as SS once I reach that age.
Pensions are good because I bet at least half of our workforce hasn't even opened up a 401K. People don't really invest in their future on their own. If we got rid of the pension, everyone would be crying poor once they realize they will have
Up In Smoke
Well-Known Member
What sort of number were you thinking?
Full disclosure, I don't participate in the company/Teamster 401K. My wife and I contribute to a 401K and Roth through our business holdings. The government allowed company contributions far exceed any standard company match through a W2 filer employee program.
Something to also keep in mind. Nearly thirty percent of the states do not tax pensions as income and if you reside or retire there your pension will go 25% further than a 401K.
DriveInDriveOut
Inordinately Right
An amount equal to what would go into the pension on the employee's behalf.
Brownslave688
You want a toe? I can get you a toe.
Well we are comparing it to the pension so it should be the amount they put towards the pension.
Thebrownblob
Well-Known Member
I don’t pretend to understand how actuaries calculate things, but I’m going to guess with a Pension, They are counting on a certain number of people never getting all the money put in the pension on their behalf. Obviously due to mortality and other issues as well. So I doubt 401(k) money would be matched dollar for dollar.
Up In Smoke
Well-Known Member
The company has trusties on all pension plans, so would you allow them to share in your asset allocation decisions?
