ABF | 401(k)'s as a retirement vehicle

You do go through life seeing the glass as half-empty don't you?

My prescription bifocals aren’t rose-colored.......

And,.......Brother Elwood would appreciate the Latin version of:” In the Kingdom of the Blind, the One-Eyed Man is King..”

Just call me “ Rex Luscus”.......
 
All true statements,.....
And,.....as always,...my point is: Why should your future be a “calculated” gamble?

What if there were ......inside forces......manipulating the market for their own gain?
It wouldn’t even be a “calculated “ risk........It would be a game rigged against you.

The redeeming factor for defined-benefit plans,.....is that risk is spread out over the entire pool of participants....
And......the Trustees are.....supposedly......answerable to the participants.
You don’t need the skill level of at least a day trader to make reasonably informed decisions.....

And,......if you make an “error” in your defined-contribution choices.....you suffer ......eternally.....in the most vulnerable time of your life. Your “fault”..........even in a ...rigged.....game.....

I think retirement pensions and savings are far too important to be left to blind trust,....imperfect decisions,....and potentially rigged outcomes......
Why doesn’t Congress and Wall Street see it that way, too?

C’mon, getting out of bed is a ‘calculated gamble.’

There is no 'if’ about inside forces manipulating the markets. Once the algorithms take over in an up or down market, everything is completely skewed. The important thing to remember is that the market will ALWAYS rebound. It is merely a matter of time. It will also always CRASH. It's just a matter of time.

Investment horizon is critical in one's strategy and ability to assume risk.

If you are willing to allow another to invest in your best interest, why is a pension plan better than an individual retirement account? A Trustee has the same fiduciary responsibility as does a CFP, yet both can be shown to have made bad choices on behalf of those they represent.

It seems you imply that Congress should control the free market. Investing is a gamble. Even the most prolific investors fail.
 
C’mon, getting out of bed is a ‘calculated gamble.’

There is no 'if’ about inside forces manipulating the markets. Once the algorithms take over in an up or down market, everything is completely skewed. The important thing to remember is that the market will ALWAYS rebound. It is merely a matter of time. It will also always CRASH. It's just a matter of time.

Investment horizon is critical in one's strategy and ability to assume risk.

If you are willing to allow another to invest in your best interest, why is a pension plan better than an individual retirement account? A Trustee has the same fiduciary responsibility as does a CFP, yet both can be shown to have made bad choices on behalf of those they represent.

It seems you imply that Congress should control the free market. Investing is a gamble. Even the most prolific investors fail.


Of course getting out of bed is a....calculated...gamble, ...Operative word is "calculated". There's a really good chance you won't be hit by a meteorite before you've had your morning coffee.
And that neighborhood pack of ravening hyenas won't savage you on the way to the mailbox.......
And your wife didn't accidentially drop the arsenic container in your soup that you're having for dinner....She loves you enough to keep the arsenic container clearly marked in the cupboard beside the oregano and cinnamon containers.........

But,....as I said,....the Operative word is calculated. How can you make....calculated....decisions on your 401(K)...(..or any stock market decisions, for that matter..)...if you don't have enough information to...calculate the risk?
Most defined-contribution choices are based on pure blind faith......on the say-so of the fund managers,....along with the (legal) disclaimer of "Let the Buyer Beware",...which alleviates any responsibility for any sudden losses...
You Should Have Known Better...
To your point that the Multi-Employer defined-benefit funds invest in the same capricious market,....that is true......
But,......the investment firms are answerable to the Trustees,..who in turn, have to be elected officials of a Union, making them answerable to the membership, ultimately......(..half of them, anyway..).....
This makes investment firms with defined-benefit funds "results-oriented"......or the Trustees will get rid of a poorly performing investment group.

And,......The individual participant does NOT take a financial hit. The "risk" is spread through the entire pool of participants and through multiple (competing) investment firms.....
Should be a ....foolproof ....way of guaranteeing a financially safe retirement, right?
Yeah,...Right.....In 2014 , Wall Street lobbied heavily for passage of the Omnibus Bill which contained MPRA language that, for the first time, allows defined-benefit funds to take back pension payments from retirees.
That,....in my eyes,...is just another smoking gun in Big Business' quest to eliminate the working people's voices in the Money Market.

If 401(k)'s, and associated investment "vehicles"..(..or schemes..)....are so great.....why isn't there made available to the public a clear, understandable, explanation of how to SAFELY "invest" in your pension? I mean without taking a university course in Economics?.....I mean an educational class PRIOR to an employee signing up for such schemes,....explaining the differences between defined-benefit and defined-contribution retirements?

Social Security is a defined-benefit fund. I think just about all of us absolutely rely on Social Security being there at some point. If defined-benefit funds are such losers,...why does the Government promote one so heavily? Could it be the success rate of the 83 year old fund?
And it's easy to understand just what you're getting with Social Security...(..just like it's easy to understand what you're getting with a defined-benefit fund. The ERISA law requires a clear explanation of benefits..).....

Big Business hates pension plans.....Gives the EMPLOYEE choices as to when HE wants to leave......Wall Street hates pension funds....They are terrified of Unions holding large blocks of "unregulated stocks"..(Wall Street's term) that aren't controlled through the ....usual...channels of international banking and investments. The Wall Street Journal hqad an editorial years ago, saying that: "Unions should not be allowed to do "social engineering" with the stocks that Union pension funds owned."
"Social Engineering", to Wall Street, means Unions selling stock in companies that discriminate, refuse to bargain, or refuse to allow collective bargaining .........
That upsets the apple cart........trading and selling stocks based on moral principles instead of instead of purely capitalistic ones.

I think.......(...I am a Cultural Paranoid..)...that, by design,....they are trying to wreck traditional pensions.
And, by design,....selling defined-contribution "schemes"...with no guarantees, and based on pure faith of the fund managers to make altruistic "good choices" on behalf of each individual "investor"....to replace traditional pensions.

What do you think, Brother? Pardon me,..I've got to go...we're having a meteor shower here today, and I'm out of tinfoil to line my hat......
 
I would like to point out that nothing is going to change the course of defined contribution plans or defined benefit plans.
 
I would like to point out that nothing is going to change the course of defined contribution plans or defined benefit plans.


You may point that out. But, when enough people start asking why there is no pension investment security with defined-contribution plans.......and why did the defined-benefit plans who HAD security...(...Risk spread, completely employer-financed, Pension Benefit Guarantee Insurance, Government oversight through Employee Retirement Income Security Act of 1974, or ERISA..)....disappear out of the private employer sector?
..(..and are under attack in the public employer sector..)..

Then maybe the scales will fall from peoples' eyes as regards forced stock market participation of employees,....as the ONLY means of possibly financing their future....
People may start asking for defined-benefit single-employer plans through collective bargaining.........People may start organizing just to be able to access collective bargaining....just to be able to ask.......

I've always said that the companies are just as...organized...as the Unions are. The Chamber of Commerce, various trade groups, Business Roundtable..........All the companies belong to these "employer Unions"......

It would be a terrible thing to find out that these groups have banded together to control the Labor market,....and it's costs,......by artificially controlling the demographics......and the rise and fall of the stock market.....
All people in defined-contribution plans base their retirement not on their age, or physical condition, or family circumstances,........but solely on whether their portfolio will....allow...them to retire.
And that may change, from month to month.......

We can put our collective heads down,...shrug,...and say there's nothing we can do.......

Or, we can fight to keep good, secure pensions that are not based solely on the amount of money,...but are based on what the employee needs , and can be planned on long-term. We can write letters,....we can ask questions,....

Or we can shrug and do nothing,....(..and let it be done to us..)...

Which pension "plan" is better for working people? I mean in perfect conditions.......
Defined-benefit plans, with all the Government protections, and a yearly figure you can count on for the remainder of your life?
Or,...defined-contribution plans,...subject to the vagaries of the market, "Let the Buyer Beware"-style investing, and a finite end to the pile of money you may have amassed?
 
You may point that out. But, when enough people start asking why there is no pension investment security with defined-contribution plans.......and why did the defined-benefit plans who HAD security...(...Risk spread, completely employer-financed, Pension Benefit Guarantee Insurance, Government oversight through Employee Retirement Income Security Act of 1974, or ERISA..)....disappear out of the private employer sector?
..(..and are under attack in the public employer sector..)..

Then maybe the scales will fall from peoples' eyes as regards forced stock market participation of employees,....as the ONLY means of possibly financing their future....
People may start asking for defined-benefit single-employer plans through collective bargaining.........People may start organizing just to be able to access collective bargaining....just to be able to ask.......

I've always said that the companies are just as...organized...as the Unions are. The Chamber of Commerce, various trade groups, Business Roundtable..........All the companies belong to these "employer Unions"......

It would be a terrible thing to find out that these groups have banded together to control the Labor market,....and it's costs,......by artificially controlling the demographics......and the rise and fall of the stock market.....
All people in defined-contribution plans base their retirement not on their age, or physical condition, or family circumstances,........but solely on whether their portfolio will....allow...them to retire.
And that may change, from month to month.......

We can put our collective heads down,...shrug,...and say there's nothing we can do.......

Or, we can fight to keep good, secure pensions that are not based solely on the amount of money,...but are based on what the employee needs , and can be planned on long-term. We can write letters,....we can ask questions,....

Or we can shrug and do nothing,....(..and let it be done to us..)...

Which pension "plan" is better for working people? I mean in perfect conditions.......
Defined-benefit plans, with all the Government protections, and a yearly figure you can count on for the remainder of your life?
Or,...defined-contribution plans,...subject to the vagaries of the market, "Let the Buyer Beware"-style investing, and a finite end to the pile of money you may have amassed?
When Enron went down four pension funds went with it. The government did nothing. My grandfather was part of this. Got 1/3 of his bennies. No one is going to save your monster funds.
http://www.pionline.com/article/20040603/ONLINE/406030716/pbgc-to-shutter-4-underfunded-enron-plans
 
When Enron went down four pension funds went with it. The government did nothing. My grandfather was part of this. Got 1/3 of his bennies. No one is going to save your monster funds.
http://www.pionline.com/article/20040603/ONLINE/406030716/pbgc-to-shutter-4-underfunded-enron-plans


I would think that the government did.......PBGI...Government-mandated for defined-benefit pensions,....made sure he got something.
Those involved with Enron's defined-contribution funds got nothing......They evaporated like water on a stove....

Several months after the Enron debacle,...and based on anecdotal evidence of other defined-contribution plans dissolving and cheating their employees,...like Color Tile..(..look it up,..Type "Color Tile pensions")...
...Congress had a bill to limit the amount of any one stock held by company-sponsored defined-contribution plans to 20% .....Defined-benefit plans are,...by ERISA law already held to a limit of 10%...

Congress voted down that limit on defined-contribution plans! Right after Enron! A direct sop to Wall Street investment bankers!

The generation that ends up spending 30 or so years invested SOLELY in a defined-contribution 401(K)-style pension plan,...is just now starting to retire........I wish them well, and hope that their "planning" worked out......

But I suspect that we're going to start hearing horror stories of people not having enough to retire on,...or outliving their money......or being cheated out of their nest egg by unscrupulous villians ,..who are already putting ads on TV telling people to "invest" with them.....

You're identifying the wrong "monster", I think.......

I'd make a funny joke about investing in a dog food company,.......but it struck me as...not being very funny,...in light of the situation.........
 
I would think that the government did.......PBGI...Government-mandated for defined-benefit pensions,....made sure he got something.
Those involved with Enron's defined-contribution funds got nothing......They evaporated like water on a stove....

Several months after the Enron debacle,...and based on anecdotal evidence of other defined-contribution plans dissolving and cheating their employees,...like Color Tile..(..look it up,..Type "Color Tile pensions")...
...Congress had a bill to limit the amount of any one stock held by company-sponsored defined-contribution plans to 20% .....Defined-benefit plans are,...by ERISA law already held to a limit of 10%...

Congress voted down that limit on defined-contribution plans! Right after Enron! A direct sop to Wall Street investment bankers!

The generation that ends up spending 30 or so years invested SOLELY in a defined-contribution 401(K)-style pension plan,...is just now starting to retire........I wish them well, and hope that their "planning" worked out......

But I suspect that we're going to start hearing horror stories of people not having enough to retire on,...or outliving their money......or being cheated out of their nest egg by unscrupulous villians ,..who are already putting ads on TV telling people to "invest" with them.....

You're identifying the wrong "monster", I think.......

I'd make a funny joke about investing in a dog food company,.......but it struck me as...not being very funny,...in light of the situation.........
He got 1/3 because of the PBGI. My point is no one is going to see our full benefits in central states at least. I will more than likely see zero after paying in my whole career. Wish I would’ve started a 401(k) when I started. I started paying into the 401(k) teamster plan 10 years ago. I should’ve done it 20 years ago.
 
He got 1/3 because of the PBGI. My point is no one is going to see our full benefits in central states at least. I will more than likely see zero after paying in my whole career. Wish I would’ve started a 401(k) when I started. I started paying into the 401(k) teamster plan 10 years ago. I should’ve done it 20 years ago.
Sac, I think you will see some of your central states pension when you retire. The fund is still healthy but loosing money. It is also losing retirees. The funds projected loss was not as great as projected because of Kroger's departure (or so they claim). But the last 3 or 4 years it has not declined as projected for one reason or another (stock market increases, Kroger departure, etc.) If the fund trustees would cut benefits, the fund would stabilize. I have 17yrs in and I'm 55yrs old, I projected out 5yrs (as far as central states would let me) and I'll get over $3,000 a month at retirement (if I stay in the fund). Cut all benefits for every central states members by 15% and the fund would continue until the next crisis.

Canary, I'm scuba diving in Belize this weekend are you anywhere near there?
 
Last edited:
Sac, I think you will see some of your central states pension when you retire. The fund is still healthy but loosing money. It is also losing retirees. The funds projected loss was not as great as projected because of Kroger's departure (or so they claim). But the last 3 or 4 years it has not declined as projected for one reason or another (stock market increases, Kroger departure, etc.) If the fund trustees would cut benefits, the fund would stabilize. I have 17yrs in and I'm 55yrs old, I projected out 5yrs (as far as central states would let me) and I'll get over $3,000 a month at retirement (if I stay in the fund). Cut all benefits for every central states members by 15% and the fund would continue until the next crisis.

Canary, I'm scuba diving in Belize this weekend are you anywhere near there?


No,....I’m re-plumbing our kitchen......that’s as close of a water adventure I’ll get this weekend......

But with the way I solder copper lines, I’ll be wearing a SCUBA mask.........just in case.....
 
No,....I’m re-plumbing our kitchen......that’s as close of a water adventure I’ll get this weekend......

But with the way I solder copper lines, I’ll be wearing a SCUBA mask.........just in case.....
You still have copper lines in your house? What about PEX? If I may make a small suggestion? Google PEX v. copper waterlines. PEX lines are easier to install and more user friendly in cold weather conditions. I put them in one of my rental houses 8 or 10 years ago and no problems yet. And no fire/torch is needed. Also, no paper towels needed because you put your finger inside the copper line when you where sanding the end :(
 
Last edited:
True, canary. Pension and SS benefits are protected and strictly off limits to creditors. Are 401k’s protected? I personally don’t know...thought you might.
 
No,....I’m re-plumbing our kitchen......that’s as close of a water adventure I’ll get this weekend......

But with the way I solder copper lines, I’ll be wearing a SCUBA mask.........just in case.....
Plumbing projects are a nemesis of mine. They usually entail many curse words, scraped-up knuckles, and at least 5 trips to the hardware store for a doo-hickey or 4 (my neighbor and I try to carpool).
 
True, canary. Pension and SS benefits are protected and strictly off limits to creditors. Are 401k’s protected? I personally don’t know...thought you might.

"As long as your retirement funds are held in your 401(k) and you do not take them as distributions, your 401(k) cannot be seized or garnished by commercial creditors. However, this exemption does not protect your savings in certain situations, such as judgments relating to unpaid federal income taxes."

https://www.investopedia.com/ask/answers/090915/can-my-401k-be-seized-or-garnished.asp
 
No,....I’m re-plumbing our kitchen......that’s as close of a water adventure I’ll get this weekend......

But with the way I solder copper lines, I’ll be wearing a SCUBA mask.........just in case.....

I have done several remodeling plumbing jobs for women I an acquainted with,(Wife. daughter & daughter in law). Only one was necessary which was replacement of a point of use water heater. The rest were for 'Updates' because the colors of kitchen sinks etc. were out of date. The women in my life know how to get what they want. I have warned my grandson that the girls always get what they want.
 
You still have copper lines in your house? What about PEX? If I may make a small suggestion? Google PEX v. copper waterlines. PEX lines are easier to install and more user friendly in cold weather conditions. I put them in one of my rental houses 8 or 10 years ago and no problems yet. And no fire/torch is needed. Also, no paper towels needed because you put your finger inside the copper line when you where sanding the end :(


Household copper is going for $1.30 a lb. at scrap.......so it may be worth it to start ripping from the water meter on in.....Scrap may pay for an armload of PEX.......

But I am an old, old man........Do I spend my remaining twilight years crawling through dusty spaces dragging plastic pipe, .....while faint voices through the ductwork can be heard querelously asking when they can take a shower........?

I just remodeled the kitchen.......Only took me 20 years from the last time I ......”imperfectly “ ......remodeled it before......
My back still hurts from the whip stripes......

There’s no way I’m changing the fundamental makeup of the water supply in this house...........I’d gladly accept the straightjacket first......Time and life are too short........I can hear the hoarse breathing of the grey-hooded one with the scythe ...handing me the PVC glue and elbow joints......
 
Household copper is going for $1.30 a lb. at scrap.......so it may be worth it to start ripping from the water meter on in.....Scrap may pay for an armload of PEX.......

But I am an old, old man........Do I spend my remaining twilight years crawling through dusty spaces dragging plastic pipe, .....while faint voices through the ductwork can be heard querelously asking when they can take a shower........?

I just remodeled the kitchen.......Only took me 20 years from the last time I ......”imperfectly “ ......remodeled it before......
My back still hurts from the whip stripes......

There’s no way I’m changing the fundamental makeup of the water supply in this house...........I’d gladly accept the straightjacket first......Time and life are too short........I can hear the hoarse breathing of the grey-hooded one with the scythe ...handing me the PVC glue and elbow joints......

Initial installation of residential plumbing, because of costs, convience and durability, Pex, would be your first
choice.
To make minor repairs and replace entire plumbing, not very wise.
Canary, I'm sure you know you can connect copper, cpvc or galvanized to pex with no soldering required.
Now, if you are not just after bragging rights, to say "I HAVE PEX" slap a foot or two onto your existing copper
and get out from under that house.
If you are still bored, come on down to the coast, we'll replace hardwood floors, courtesy of Florence.
 
You still have copper lines in your house? What about PEX? If I may make a small suggestion? Google PEX v. copper waterlines. PEX lines are easier to install and more user friendly in cold weather conditions. I put them in one of my rental houses 8 or 10 years ago and no problems yet. And no fire/torch is needed. Also, no paper towels needed because you put your finger inside the copper line when you where sanding the end :(
Initial installation of residential plumbing, because of costs, convience and durability, Pex, would be your first
choice.
To make minor repairs and replace entire plumbing, not very wise.
Canary, I'm sure you know you can connect copper, cpvc or galvanized to pex with no soldering required.
Now, if you are not just after bragging rights, to say "I HAVE PEX" slap a foot or two onto your existing copper
and get out from under that house.
If you are still bored, come on down to the coast, we'll replace hardwood floors, courtesy of Florence.

I realize that PEX is far superior to
Polybutylene, but the Shell Oil debacle kept me busy for almost three years, preparing tracts of homes to be replumbed. As a result, copper throughout my home, water softener included. Living in a mild climate adds to my confidence level.

I regularly shore up any leaks in my 401k. :17142:
 
Of course getting out of bed is a....calculated...gamble, ...Operative word is "calculated". There's a really good chance you won't be hit by a meteorite before you've had your morning coffee.
And that neighborhood pack of ravening hyenas won't savage you on the way to the mailbox.......
And your wife didn't accidentially drop the arsenic container in your soup that you're having for dinner....She loves you enough to keep the arsenic container clearly marked in the cupboard beside the oregano and cinnamon containers.........

But,....as I said,....the Operative word is calculated. How can you make....calculated....decisions on your 401(K)...(..or any stock market decisions, for that matter..)...if you don't have enough information to...calculate the risk?
Most defined-contribution choices are based on pure blind faith......on the say-so of the fund managers,....along with the (legal) disclaimer of "Let the Buyer Beware",...which alleviates any responsibility for any sudden losses...
You Should Have Known Better...
To your point that the Multi-Employer defined-benefit funds invest in the same capricious market,....that is true......
But,......the investment firms are answerable to the Trustees,..who in turn, have to be elected officials of a Union, making them answerable to the membership, ultimately......(..half of them, anyway..).....
This makes investment firms with defined-benefit funds "results-oriented"......or the Trustees will get rid of a poorly performing investment group.

And,......The individual participant does NOT take a financial hit. The "risk" is spread through the entire pool of participants and through multiple (competing) investment firms.....
Should be a ....foolproof ....way of guaranteeing a financially safe retirement, right?
Yeah,...Right.....In 2014 , Wall Street lobbied heavily for passage of the Omnibus Bill which contained MPRA language that, for the first time, allows defined-benefit funds to take back pension payments from retirees.
That,....in my eyes,...is just another smoking gun in Big Business' quest to eliminate the working people's voices in the Money Market.

If 401(k)'s, and associated investment "vehicles"..(..or schemes..)....are so great.....why isn't there made available to the public a clear, understandable, explanation of how to SAFELY "invest" in your pension? I mean without taking a university course in Economics?.....I mean an educational class PRIOR to an employee signing up for such schemes,....explaining the differences between defined-benefit and defined-contribution retirements?

Social Security is a defined-benefit fund. I think just about all of us absolutely rely on Social Security being there at some point. If defined-benefit funds are such losers,...why does the Government promote one so heavily? Could it be the success rate of the 83 year old fund?
And it's easy to understand just what you're getting with Social Security...(..just like it's easy to understand what you're getting with a defined-benefit fund. The ERISA law requires a clear explanation of benefits..).....

Big Business hates pension plans.....Gives the EMPLOYEE choices as to when HE wants to leave......Wall Street hates pension funds....They are terrified of Unions holding large blocks of "unregulated stocks"..(Wall Street's term) that aren't controlled through the ....usual...channels of international banking and investments. The Wall Street Journal hqad an editorial years ago, saying that: "Unions should not be allowed to do "social engineering" with the stocks that Union pension funds owned."
"Social Engineering", to Wall Street, means Unions selling stock in companies that discriminate, refuse to bargain, or refuse to allow collective bargaining .........
That upsets the apple cart........trading and selling stocks based on moral principles instead of instead of purely capitalistic ones.

I think.......(...I am a Cultural Paranoid..)...that, by design,....they are trying to wreck traditional pensions.
And, by design,....selling defined-contribution "schemes"...with no guarantees, and based on pure faith of the fund managers to make altruistic "good choices" on behalf of each individual "investor"....to replace traditional pensions.

What do you think, Brother? Pardon me,..I've got to go...we're having a meteor shower here today, and I'm out of tinfoil to line my hat......

The truth be, that I trust no one to manage my money. Social Security is not managed it is pilfered and *****. I have not had any course in economics, but I have read much about the aspects of stocks and bonds that are most significant to me.

If one is able to prepare one’s own taxes and balance one’s own checking account, while also putting money away in savings, the extra step of retirement investment is the next logical. Taking control of that money is liberating.

Ipsa scientia potestas est, carpe diem!
 
Top