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One of workplace tragedy in America is how we moved from professionally managed pensions to individual 401k retirement plans. Most folks have no business decid
by SkipperCat 2y ago
One of workplace tragedy in America is how we moved from professionally managed pensions to individual 401k retirement plans. Most folks have no business deciding asset allocation, managing risk, etc.
- virtue3 2y agogood thing the investment firms kept the fees the same tho :)
- pizzalife 2y agoMost 401ks will just default to a target date fund, which is usually a total market stock ETF + bonds. That will certainly perform better than most actively managed pension funds.
- paulryanrogers 2y agoBut worse than the defined benefit pensions that 401k's were leveraged to replace.
- throwaheyy 2y agoDefined benefit pensions are unsustainable Ponzi schemes though. Attempting to guarantee market returns is silly.
- paulryanrogers 2y agoYeah, I wish we'd at least have tried scaling the benefits based on company's ability to pay. Or if they were guaranteed yet more realistic. Ultimately maybe only something market-based is realistic. Yet if we must do that then I'd prefer gov workers be forced to use the same system. Also 401Ks being born out of a carve out for executives feels like an awkward fit for regular employees. Perhaps a unified system not tied to employment could be the best of both worlds.
- tbrownaw 2y agoPensions have extra counterparty risk. I've also heard things that sound like they tend to have sharp eligibility cutoffs or amount calculations. There aren't issues with a 401k if I keep changing employers every few years. And you can't play stupid games with taking lots of overtime for your final year to boost retirement benefits beyond what they "should" be.