4 ms·

Yes. But how much you get depends on how much you paid in during your working years, as well as what age you retire at.

nabla9 8y ago
I think that's pension. What I mean is when person don't have eugh pension to live with, do they beg on the street corner?
- barneygumble742 8y ago
  It's not pension. Everyone with an income pays into social security and how much is stated on your pay statement. Companies opted to replace pensions with a 401k so once the worker leaves the company, they are no longer required to pay more into it (correct me on this if I'm wrong). The 401k is market based so there's risk involved whereas a pension was guaranteed but even that is now based on the market so during the 2008 market issues, even pensions saw a dip in value (pension funds).
  - jeffbax 8y ago
    Pensions are not always guaranteed if the company goes under, they're also often incredibly mismanaged. Everyone should be moved to 401k, particularly the public sector which is wreaking havoc across state budgets
    - dragontamer 8y ago
      401k plans have huge society inefficiencies. If someone dies early, the 2 or 3 million they save up in a 401k plan is wasted. Pension plans can capture that inefficiency and provide superior value over 401k plans as a result. Annuities try to bridge the gap. But I admit that I don't know too much about them. Stocks and stuff are nice. But what happens if you die early or outlive your savings? At an individual level, you cannot plan such a thing. But a decent annuity company can provide value by smoothing out that kind of variance. Pensions were a combination of stock plans + annuities. The main issue with Pensions is that people live a LOT longer today than they used to 40 years ago: medicine has gotten much better. So most pension plans (including Social Security) have underestimated how much they need to pay out. "Fortunately", the American life expectancy is dropping due to the opioid crisis. So maybe things will be a bit better for pensions / annuities / Social Security than we expected just 5 years ago.
      - berberous 8y ago
        The 2 or 3 million? I think I read recently that less than 10% have a million, 2 or 3 million is 1% territory. And if someone does save that and dies early, how is that 'wasted' if it goes to support their family? Annuities can 100% bridge the gap. The problem is most Americans are financially illiterate, this stuff (401ks, annuities, how much to save) is too complicated for them and most people are too impulsive and consumerist to save enough. So 401ks/annuities are better on a societal level assuming prudent savvy employees, which is a completely false assumption.
        dragontamer 8y ago
        > The 2 or 3 million? I think I read recently that less than 10% have a million, 2 or 3 million is 1% territory. And if someone does save that and dies early, how is that 'wasted' if it goes to support their family? In particular, it could have gone back to their family sooner. IE: Leaving money in your 401k plan means NOT paying for your kid's college tuition with that money (or their house, or their first car, or their wedding) Sure, maybe the kid will get a giant payout when they're 30 or 40 years old. But by then, their lives are probably established and they don't really need the windfall. And they only get that windfall if you die. > Annuities can 100% bridge the gap. Annuities have the same failure mode as pension plans: if they fail, then no one gets the money they were promised. When comparing 401k plans vs Pension Plans, its definitely a factor to consider.
- mnm1 8y ago
  Yeah, unless they continue to work into their seventies and eighties, have kids who can support them, or start stealing or other crime (begging is actually a crime in much of the US). It's close to impossible to live off of social security even if you had a high paying job ($120k+) in most of America. While Medicare covers some health costs, for preventative and prescription costs, one needs additional healthcare insurance. My mom pays almost $300 a month for that. Then there are property taxes or rent depending if you own a home or not, costs which in most places are constantly going up. And I haven't even gotten to food, electricity, heat, garbage, sewer, or Internet bills. None of those are optional. Car insurance, maintenance, taxes, and gas are also not optional in most of America. It's a shite state of affairs, one that's beyond frightening even as a young person, but most people either don't realize it, or work paycheck to paycheck without any 401k option (tax deferred savings account invested in the market) and can't save anything meaningful.

I think that's pension. What I mean is when person don't have eugh pension to live with, do they beg on the street corner?

barneygumble742 8y ago
It's not pension. Everyone with an income pays into social security and how much is stated on your pay statement. Companies opted to replace pensions with a 401k so once the worker leaves the company, they are no longer required to pay more into it (correct me on this if I'm wrong). The 401k is market based so there's risk involved whereas a pension was guaranteed but even that is now based on the market so during the 2008 market issues, even pensions saw a dip in value (pension funds).
- jeffbax 8y ago
  Pensions are not always guaranteed if the company goes under, they're also often incredibly mismanaged. Everyone should be moved to 401k, particularly the public sector which is wreaking havoc across state budgets
  - dragontamer 8y ago
    401k plans have huge society inefficiencies. If someone dies early, the 2 or 3 million they save up in a 401k plan is wasted. Pension plans can capture that inefficiency and provide superior value over 401k plans as a result. Annuities try to bridge the gap. But I admit that I don't know too much about them. Stocks and stuff are nice. But what happens if you die early or outlive your savings? At an individual level, you cannot plan such a thing. But a decent annuity company can provide value by smoothing out that kind of variance. Pensions were a combination of stock plans + annuities. The main issue with Pensions is that people live a LOT longer today than they used to 40 years ago: medicine has gotten much better. So most pension plans (including Social Security) have underestimated how much they need to pay out. "Fortunately", the American life expectancy is dropping due to the opioid crisis. So maybe things will be a bit better for pensions / annuities / Social Security than we expected just 5 years ago.
    - berberous 8y ago
      The 2 or 3 million? I think I read recently that less than 10% have a million, 2 or 3 million is 1% territory. And if someone does save that and dies early, how is that 'wasted' if it goes to support their family? Annuities can 100% bridge the gap. The problem is most Americans are financially illiterate, this stuff (401ks, annuities, how much to save) is too complicated for them and most people are too impulsive and consumerist to save enough. So 401ks/annuities are better on a societal level assuming prudent savvy employees, which is a completely false assumption.
      - dragontamer 8y ago
        > The 2 or 3 million? I think I read recently that less than 10% have a million, 2 or 3 million is 1% territory. And if someone does save that and dies early, how is that 'wasted' if it goes to support their family? In particular, it could have gone back to their family sooner. IE: Leaving money in your 401k plan means NOT paying for your kid's college tuition with that money (or their house, or their first car, or their wedding) Sure, maybe the kid will get a giant payout when they're 30 or 40 years old. But by then, their lives are probably established and they don't really need the windfall. And they only get that windfall if you die. > Annuities can 100% bridge the gap. Annuities have the same failure mode as pension plans: if they fail, then no one gets the money they were promised. When comparing 401k plans vs Pension Plans, its definitely a factor to consider.
mnm1 8y ago
Yeah, unless they continue to work into their seventies and eighties, have kids who can support them, or start stealing or other crime (begging is actually a crime in much of the US). It's close to impossible to live off of social security even if you had a high paying job ($120k+) in most of America. While Medicare covers some health costs, for preventative and prescription costs, one needs additional healthcare insurance. My mom pays almost $300 a month for that. Then there are property taxes or rent depending if you own a home or not, costs which in most places are constantly going up. And I haven't even gotten to food, electricity, heat, garbage, sewer, or Internet bills. None of those are optional. Car insurance, maintenance, taxes, and gas are also not optional in most of America. It's a shite state of affairs, one that's beyond frightening even as a young person, but most people either don't realize it, or work paycheck to paycheck without any 401k option (tax deferred savings account invested in the market) and can't save anything meaningful.