Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

401(k)s: Employer Contributions Get the Ax
Yahoo ^ | 11/13/08 | Amy Feldman

Posted on 11/13/2008 5:48:27 AM PST by Libloather

click here to read article


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-83 next last
To: caver
I won’t be losing much on my 401k match. I’m a peon in a very big company. I’ve been there almost 30 years and my company “match” is only $450 a year.

That's an unusual 401(k). The majority of them base the "matching amount" on what you, as the employee contribute. With the current laws, companies have a vested interest in making sure that even "peons" like you save and receive matches at comparable rates to those higher in the company.

So because I'm curious, is you match smalller because your contributions are smaller; i.e., if you saved more, would you get a higher match?

21 posted on 11/13/2008 6:37:21 AM PST by Lou L
[ Post Reply | Private Reply | To 13 | View Replies]

To: Libloather
There is somewhat of an upside to all of this.

The unintended consequences of Obama's election and the policies that his administration will pursue guarantee that he will preside over the greatest financial collapse in U.S. history. The recent stock market declines are but a prelude of what is to come. Obama may well achieve a U.S GDP of $4.5 Trillion per year in real dollars (from the current $14 Trillion a year), with two-thirds of it government spending (vice the current 37%), in less than four years.

If you don't think it can happen, consider what an annual 25% inflation rate compounded over four years will do to a nominally flat GDP. Under Obama, the government is going to "print" trillions of dollars every year.

Capital, innovation, and intellectual property already are fleeing the U.S. at a rate never witnessed before in history. Capital that remains is being converted to hard (but ultimately non-productive) assets in record amounts.

No doubt the business press will continuously report on the miracles of the Obama economy, but the numbers will be based upon electronic digits (not even script) worth less than Monopoly money, and created in ever increasing supplies.

Again, if you don't think it is possible, a single rogue trader, Jerome Kerval, created $74 Billion, using fictitious, electronically scripted trades, at Societe General (France's second largest bank) in a matter of months before he was caught last January.

The government of France worked with Societe General to cover and conceal the fraud over a period of five days, reducing the "real" loss to $7B. If the Martin Luther King holiday in the U.S had not closed access to U.S. markets for one of those days, they probably could have completely covered it up and the public never would have known.

Forget the demonstrated Democrat ability to manufacture votes. Imagine government sanctioned electronic manipulation of the markets and electronic creation of "capital" in the form of ever increasing bailouts and handouts.

Obama will deliberately hang the American dollar on a roll in a men's room stall, next to the ones where he is preparing to hang the Constitution and the BIll of Rights. In an effort to buy time and forestall the inevitable, a full-scale assault on private property rights is already under way.

Corporate governance is demonstrably broken now, made worse by the decision to bail out companies rather than let them fail. It is about to become much worse as the primary measure of success in business becomes not producing great products at a fair price, but pursuit of government guarantees and bailouts. All companies are Airbus now.

Eventually, and sooner rather than latter, Obama will be forced to dramatically shrink government spending and will likely have to default on Social Security, Medicare, and Treasury obligations.

It couldn't happen to a nicer guy. And it will be the lasting legacy of the Democrat party.

The severe downside is that the U.S. economy under Obama is going to make the Wiemar Republic and current Zimbabwe economies look good by comparison.

22 posted on 11/13/2008 6:38:13 AM PST by Natty Bumppo@frontier.net (We are the dangerous ones, who stand between all we love and a more dangerous world.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: The_Victor

Absolutely dead on!


23 posted on 11/13/2008 6:41:25 AM PST by Datahead
[ Post Reply | Private Reply | To 6 | View Replies]

To: 17th Miss Regt
I would go one step further . . . and this applies to Social Security, 401(k) plans, IRAs, etc.

The "great reckoning" you refer to is the inevitable end to the silly, delusional notion that any human society is capable of accommodating large numbers of old and not-so-old people who spend decades of their lives in a state called "retirement" where they don't engage in nearly enough productive activity to keep themselves alive.

24 posted on 11/13/2008 6:41:42 AM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: Lou L

I’ve got a question for anyone who wants to put forth an opinion: My 401K has lost 1/3 of its value but I have moved future contributions to a Guaranteed Fund (low interes, but at least no losses). I stand to lose even more but am hesitating to move the remaining dollars into this fund. Should I bite the bullet and just do it? Or hold fast? I won’t live long enough to see it get back in the red (near retirement), but I’m thinking about 10-15 years out. Anybody got a crystal ball?


25 posted on 11/13/2008 6:42:25 AM PST by sarasota
[ Post Reply | Private Reply | To 21 | View Replies]

To: Old Teufel Hunden
We've been trying to get our employer to cut contributions and other unnecessary expenses,in order to keep our jobs.Problem is,he isn't listening and didn't even know the economy was bad until 4 weeks ago.We're in a business that "shouldn't" be experiencing much pain,but we are.We haven't broken even in 6 months now,but we keep on spending.

It's a sure sign that we won't be in business much longer here.To compound our problems,our overseas customers aren't paying their bills.They promise to send us payment,but never do.We're taking hundreds of thousands and our business only gross' 5 million per year.

26 posted on 11/13/2008 6:54:35 AM PST by quack ("Those Who Sacrifice Liberty For Security Deserve Neither.")
[ Post Reply | Private Reply | To 20 | View Replies]

To: sarasota
I am in a similar situation. I had been thinking about shifting future contributions, especially those going to my international funds, to something more conservative. But then I started to think about it, you can buy more shares now, which is effectively a discount. It's dollar-cost averaging at its finest.

While we all wish we had crystal balls, all we really have is faith (or lack thereof) in the markets. If you have a longer timeline, historically, the markets have always recovered.

The fundamentals of investing are still true. Maintain a portfolio allocation appropriate for your age. Save as much as you can. With risk generally comes reward, but don't get so risky you can't sleep at night.

27 posted on 11/13/2008 7:11:17 AM PST by Lou L
[ Post Reply | Private Reply | To 25 | View Replies]

To: Lou L

Thanks for your comments. In truth, I can pretend the investments don’t exist in order to sleep at night because I won’t live long enough to see them return to prior levels. Or if I do, I really don’t plan to spend the money anyway, as I am learning to live on less and would like to leave those funds to a daughter who’s on the autistic spectrum. I just hope they are worth something more when I “check out”.


28 posted on 11/13/2008 7:14:47 AM PST by sarasota
[ Post Reply | Private Reply | To 27 | View Replies]

To: quack

Your company is already hurting badly and he needs to stop the bleeding. I think a first step is to refuse to send more merchandise until bills are paid by those whose accounts are outstanding. Your boss needs a reality check. Who is giving him/her financial advice??


29 posted on 11/13/2008 7:16:33 AM PST by sarasota
[ Post Reply | Private Reply | To 26 | View Replies]

To: sarasota

My opinion:move what you have invested into a “Cash” account that will neither lose,nor gain.Stop putting more money into a losing pit and put it in either a Money Market account or just save it.That way,you don’t lose ANY more money.When the market hits bottom(and we have a ways to go) you can start investing again.


30 posted on 11/13/2008 7:17:54 AM PST by quack ("Those Who Sacrifice Liberty For Security Deserve Neither.")
[ Post Reply | Private Reply | To 25 | View Replies]

To: sarasota

He’s an idiot.He gets advice from no one.He’s the smartest man in the world.Just ask him.


31 posted on 11/13/2008 7:22:28 AM PST by quack ("Those Who Sacrifice Liberty For Security Deserve Neither.")
[ Post Reply | Private Reply | To 29 | View Replies]

To: neb52
I would rather exchange the benefits for a bigger paycheck anyways. I would much prefer to go out and deal with my retirement and medical coverage needs independent of my company and government.

How do you equate the exchange as giving you a bigger paycheck?

32 posted on 11/13/2008 7:22:44 AM PST by VRWCmember
[ Post Reply | Private Reply | To 2 | View Replies]

To: The_Victor; Liz; BOBTHENAILER; Milhous; abb; SierraWasp
Bingo! Give The Victor the morning prize for decoding what is happening:

The purpose here is to convince us that Obama's plan to eliminate the 401k tax deduction in favor of an expanded government retirement program is a wonderful idea. See these nasty employers can just take it away from you whenever they want. Never mind that the government can too.

Add to Victor's comment the probable reality of the market going down 2-5% per week after Zer0's election/mandate to rule to the actual installation of the royal Zer0 as life long el Presidente in January 2009. When Zer0 presents the Rat proposal to replace all our our 401k's/Iras with the new Social Security Scam II notes to the supposed values in August of this year. Most Americans will crawl on their bellies thanking Lord Obama from delivering them from the awful free market 401k's/IRA's.

33 posted on 11/13/2008 7:22:58 AM PST by Grampa Dave (Do we trust 0W0N$PENDALOT, Pelo$i, Barnie, Dodd & Reid to leave our 401k's/IRA's alone?)
[ Post Reply | Private Reply | To 6 | View Replies]

To: sarasota
I stand to lose even more but am hesitating to move the remaining dollars into this fund. Should I bite the bullet and just do it? Or hold fast? I won’t live long enough to see it get back in the red (near retirement), but I’m thinking about 10-15 years out. Anybody got a crystal ball?

If your investment horizon (i.e. retirement date) is 10-15 years out, then you would probably be best served keeping the funds where they are because moving them to the low-return fund would equate to the investment strategy of "buy-high and sell-low". When the value of the underlying securities comes back up (as it most probably will) the value of your investment in those funds will also come back. As for your future investments, I would look for undervalued assets to direct the future investment funds so that you will get a bigger bang for your buck when those assets appreciate as well. If you were retiring next year, my advice would be different.

34 posted on 11/13/2008 7:32:26 AM PST by VRWCmember
[ Post Reply | Private Reply | To 25 | View Replies]

To: VRWCmember

Well, I had planned to retire next year when my social security kicks in but now I am planning to work at least five more years. What strategy would you have given me for retirement next year?


35 posted on 11/13/2008 7:34:38 AM PST by sarasota
[ Post Reply | Private Reply | To 34 | View Replies]

To: quack

Then I think I would start looking for another job!


36 posted on 11/13/2008 7:35:40 AM PST by sarasota
[ Post Reply | Private Reply | To 31 | View Replies]

To: mlocher
If somebody's future retirement depends on a $6K contribution today, then that person is not doing enough for his own retirement.

If the survival of someone's business depends on cutting a $6k contribution today, then perhaps that person shouldn't be running a business.

37 posted on 11/13/2008 7:39:39 AM PST by Rutles4Ever (Ubi Petrus, ibi ecclesia, et ubi ecclesia vita eterna!)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Grampa Dave

Zero will reign over a Zero-Interest Rate Policy.

We’re turning Japanese...


38 posted on 11/13/2008 7:43:40 AM PST by Rutles4Ever (Ubi Petrus, ibi ecclesia, et ubi ecclesia vita eterna!)
[ Post Reply | Private Reply | To 33 | View Replies]

To: sarasota

Depending on how much you have in the funds I would probably recommend putting the bulk of your investement into income securities (bonds, etc.) that would produce a steady reliable cash flow, and move a smaller amount into an index fund that would allow for growth of those funds when the market improves. This portion of the fund could be monitored and as the market improves and the fund grows this would allow you to supplement the income fund.


39 posted on 11/13/2008 7:43:55 AM PST by VRWCmember
[ Post Reply | Private Reply | To 35 | View Replies]

To: Rutles4Ever
If the survival of someone's business depends on cutting a $6k contribution today, then perhaps that person shouldn't be running a business.

Perhaps not. But if that person goes out of business, then jobs will be lost.

I am a firm believer in the golden rule. Them that has the gold makes the rules. The employees can accept the rules or they can leave to find greener pastures. It always takes two to tango.

40 posted on 11/13/2008 7:44:49 AM PST by mlocher (USA is a sovereign nation)
[ Post Reply | Private Reply | To 37 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-83 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson