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Retirement Shock: Need to Find a Job After 40 Years at General Electric

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Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#101

Post by basementcat »

rossbmiller wrote: post #55
wlesieutre wrote: post #46

Earlier quoted context omitted.

Were those retirement plans fully funded over their years of employment, or were they kicking the can down the road with "We'll make big retirement promises and in 30 years when the $XXX,XXX,XXX bill comes due it'll be someone else's problem"?

I once saw an interesting research report comparing publicly traded companies based on their outstanding pension / retirement plan debt. The investment thesis was essentially advocating for shorting the companies with the largest under-funding of said plans, based on the assumption that a company that didn't give a crap about its employees probably wouldn't stand the test of time.

Maybe said underfunded pension funds should buy large leveraged short positions in their parent companies and cash out after announcing an impending pension shortfall.

This probably violates a bunch of SEC regulations.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#102

Post by Jach »

cortesoft wrote: post #95
Jach wrote: post #85

Earlier quoted context omitted.

What does the math look like to you? I mean, back when I was a teenager I realized that this century is different, I shouldn't expect to do what my dad did and end up (albeit through a series of acquisitions / mergers) at the same company for 30-something years with a payout plan at the end. Sometime in 2012 I saw this article[0] which starts off: "The average lifespan of a company listed in the S&P 500 index of lead…

It means we shouldn't tie retirements to the company you are working for.

Who is "we"? I'm curious how you propose to do the math right so that you, as an employer, can offer a plan that resembles a pension, and if it ends up being any different in practice than contributing to a 401k (which does transfer with jobs so is independent of your company).

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#103

Post by brandonmenc »

Speaking from experience (father worked at GE for roughly the same time as this guy and is around his age), anyone who worked at GE for 40 years - even the lowliest hourly employee - should have a massive pension and/or retirement plan - and company health insurance to boot.

He didn't diversify. He definitely could have afforded to pay a money manager on a GE salary.

At least he has that fat $85k/yr pension!

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#104

Post by sharemywin »

presidentender wrote: post #67
baldfat wrote: post #43

Earlier quoted context omitted.

I blame Corporations getting rid of Retirement Plans for the sake of profit. My father's side grandfather had 2 retirement plans, 1) Navy Seals (12 years) 2) NYC Handy man (25 years) My mom's side grandfather 1) Custodian in NYC 20 years + 2) Jazz Musician Union 10+ years. They both were able to live a decent life after retirement and didn't work a single day afterwards. This will not happen for me. I also have a pri…

> we had 5 kids and chose to have my wife stay at home for about 7 years You and your wife chose to have five children, and chose for her to work as a childcare provider, which we know is a low-paid gig. I'm very impressed that you managed to do that without going into debt, but I have little sympathy for other people who in similar situations find themselves struggling: the rest of us derive a smaller benefit from t…

Just realize that idiot that pays for a car he can't afford or spends time addicted to a game or a million other lifestyle traps modern corporations have armies of engineers, lawyers, marketing experts and others working tirelessly to ensnare are in fact what keep the economy running. And you and I employed.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#105

Post by ta76567656 »

presidentender wrote: post #67
baldfat wrote: post #43

Earlier quoted context omitted.

I blame Corporations getting rid of Retirement Plans for the sake of profit. My father's side grandfather had 2 retirement plans, 1) Navy Seals (12 years) 2) NYC Handy man (25 years) My mom's side grandfather 1) Custodian in NYC 20 years + 2) Jazz Musician Union 10+ years. They both were able to live a decent life after retirement and didn't work a single day afterwards. This will not happen for me. I also have a pri…

> we had 5 kids and chose to have my wife stay at home for about 7 years You and your wife chose to have five children, and chose for her to work as a childcare provider, which we know is a low-paid gig. I'm very impressed that you managed to do that without going into debt, but I have little sympathy for other people who in similar situations find themselves struggling: the rest of us derive a smaller benefit from t…

Don't forget that 1) the first world birth rate is below replacement, and 2) your retirement savings will be made worthless by inflation if there is no labor pool to support the economy when you are retired. Parent poster is arguably subsidising your retirement by putting in the work to raise the generation that will produce the goods and services you will wish to consume in your retirement.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#106

Post by RandallBrown »

dominotw wrote: post #77
baldfat wrote: post #43

Earlier quoted context omitted.

I blame Corporations getting rid of Retirement Plans for the sake of profit. My father's side grandfather had 2 retirement plans, 1) Navy Seals (12 years) 2) NYC Handy man (25 years) My mom's side grandfather 1) Custodian in NYC 20 years + 2) Jazz Musician Union 10+ years. They both were able to live a decent life after retirement and didn't work a single day afterwards. This will not happen for me. I also have a pri…

I have question regarding 'retirement plans' if you don't work for govt. 1. Do your retirement plans transfer between companies. 2. What happens to your retirement plan if the company goes down under.

1. Retirement plans aren't tied to companies necessarily. Usually the company contributes money into a bank account, that you keep after you leave the company.

2. Doesn't really matter as long as the bank with the account is still around. Once you leave the company, they no longer contribute to your retirement account.

(I'm specifically talking about 401k retirement accounts.)

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#107

Post by dv_dt »

joshuaheard wrote: post #81

Enron should have taught people not to keep all their investments in employer stock. My question about this article is he has an $85,000 annual pension with $280k in stock that sank to $110k in value. At 4%, the $280k would return an additional $11,200 per year. That would be reduced to $4,400, a drop of less than 10% of his annual income. For this he has to find a job?

Pensions end up tied to the health of the company too. Though they have some protection in law, in practice there is still significant risk with company pensions. There are cases when pensions promised healthcare but cut back later:

"GE revised its GE Medicare Benefit Plans handbook in 2012, underscoring the right to 'terminate, amend or replace the programs or plans, in whole or in part (subject to applicable contractual requirements), at any time and for any reason,' according to records in a 2014 lawsuit by two former GE employees, alleging that GE violated an implied obligation to provide continued health-care coverage. The clause existed in all previous versions of the handbook as well, GE said."

http://www.thefiscaltimes.com/2015/08/04/GE-Saved-Billions-C...

All the more reason to diversify retirement funds which one has that option.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#108

Post by rconti »

baldfat wrote: post #43
this_user wrote: post #22

This looks like a failure with portfolio construction to me. Keeping a lot of your net worth in the stock of one company is not a very good strategy for diversification. This is especially true when it is the stock of the company that you are working for, because if the company gets into trouble, you might not just lose your job, but also your savings. One easy improvement your this particular case would have been to…

I blame Corporations getting rid of Retirement Plans for the sake of profit. My father's side grandfather had 2 retirement plans, 1) Navy Seals (12 years) 2) NYC Handy man (25 years) My mom's side grandfather 1) Custodian in NYC 20 years + 2) Jazz Musician Union 10+ years. They both were able to live a decent life after retirement and didn't work a single day afterwards. This will not happen for me. I also have a pri…

"for the sake of profit" [citation needed]

Maybe it was for the sake of actually being a going concern? I see no proof that this was ever sustainable (nor do I see proof that it absolutely wasn't, I'm just saying, what are the numbers involved?)

Was the model ever solvent? Or did your grandfathers benefit from the money being pumped into the system during their successors' years, successors who would never have that same benefit?

That said, the idea that you "don't have a choice" in saving for retirement (that is to say, perhaps a pension program that's less generous) has something going for it. There's a reason NFL players go bankrupt. None of us are particularly good at intuitively understanding future needs and planning for the future.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#109

Post by Jach »

thewopr wrote: post #90
wnissen wrote: post #76

Earlier quoted context omitted.

Pensions are cheaper than 401(k) accounts. I will say it again, this is simple actuarial math: Pensions are cheaper than 401(k)s. Three reasons: 1. Some people will die before they collect, others will live far longer. With a pension the former subsidize the latter, and everyone who needs income gets it. In a 401(k) everyone has to save like they're going to live forever, or risk running out of money. If you keep you…

This is super interesting and something I've never thought about. One other issue I have noticed with 401k's. Do 401k's exacerbate inter-generational income inequality? I know a number of people who are going to, in the next few decades, inherit very sizable 401k accounts. This is great, in that their parents were very frugal, saved well, and had comfortable retirements. But on the flip side, a pension would have die…

Considering something like 70% of rich families already spend away their inherited wealth by the second generation (and I think ~90% by third generation) this seems like a small issue to be concerned about...

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#110

Post by RandallBrown »

aerotwelve wrote: post #54
monocasa wrote: post #9

Earlier quoted context omitted.

http://archive.is/RgZJi

This is cool, thanks for sharing this site (archive.is). Does this work because your browser was logged into a paid WSJ account before you used archive.is to log the page? Or is it only because WSJ's paywall allows archiving sites to read full articles as a matter of policy? Just curious to know how reliable this solution might be for other sites.

WSJ allows archiving sites to read full articles.

Google requires anything reachable via their search engine isn't behind a paywall. Paste the full URL into a google.com search and click the link. You'll bypass the paywall, because google is the referrer.

WSJ and other news sites go along with this because it's not worth it for them to be excluded from search indexes.

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