401Ks

[rpmmutant]

http://www.laobserved.com/archive/2008/12/media_news_drops_401k_con.php
Sorry if this is a db, but has anyone seen this? Anyone care? Matching 401K contributions was about the only thing newspapers did right by their employees. Now MediaNews anyway is going to stop doing it. What will this do to the stock market? What will it do to retirement accounts? Seems to me like another nail in the coffin.

 

[Joe Williams]

Least of their worries.

Lots of shops don't match. Especially now, but even before all the economic gloom and doom.

There is a growing sense nationally, across industries, that 401k program has been a "failure," because so few workers made real use of it. I don't agree, but Media News -- rat bastards that I understand them to be -- has tons of company in this move.

 

[Ace]

Least of their worries.

Lots of shops don't match. Especially now, but even before all the economic gloom and doom.

There is a growing sense nationally, across industries, that 401k program has been a "failure," because so few workers made real use of it. I don't agree, but Media News -- rat bastards that they are -- have tons of company in this move.

What he said.

401ks are great. But it's hard to get 20 somethings to think of anything beyond that next six pack.

 

[Screwball]

Zell had Singleton beat on this one, by many months.

 

[Lollygaggers]

Least of their worries.

Lots of shops don't match. Especially now, but even before all the economic gloom and doom.

There is a growing sense nationally, across industries, that 401k program has been a "failure," because so few workers made real use of it. I don't agree, but Media News -- rat bastards that they are -- have tons of company in this move.

What he said.

401ks are great. But it's hard to get 20 somethings to think of anything beyond that next six pack.

I'm a 20 something, and I LOVE my 401k with the company match. Maybe I'm the exception, who knows? But you're foolish, no matter how old you are, if you don't take advantage of the free money from that match.

What my paper is starting to do in 2009, though, is give half of their match as company stock. Needless to say, with it being NYT stock, I'll sell it as soon as I have the chance, and I'm glad we have the option to do that. Doesn't make sense to me for the company to do that, though, because they have to know most employees will dump the stock at the first chance they get, hurting its value.

 

[SF_Express]

Interestingly, in an effort to start gnawing away at my debt, I just dropped my contribution to the amount of the company match, as opposed to the tax-exempt limit.

If they suspended the match for a year or two, I'd probably go to zero. (Those of you who know who I am: There's nothing out there that the company might do that. I'm just saying if the did.)

I'm 53 and have very little saved for retirement. But the debt is killing me. And college/support runs through 2010.

At that point, I'm going to have to try to catch up best I can. But I figure -- well, hope -- I'm going to be working well past what has traditionally been retirement anyway.

And Lollygaggers: May be you meant the distinction, but I don't know that you'll be able to sell that NYT stock, except within the 401k, to move it into something else.

And I'm not sure I wouldn't hold onto that anyway. You'll be buying that company stock low in a bad market. I might think about holding that as a diversifying part of your account and hoping for an eventual rebound as media companies reinvent themselves. Especially at your age.

 

[Bump_Wills]

A simple illustration of why I wish I had cared about my 401(k) before my 30s:

Let's say, starting at age 22, you put away $3,000 annually and it grows at an 8 percent clip (probably not this year, but a reasonable figure most years). In 20 years, you have about $150,000 socked away. Not bad.

Here's why it's hard to play catch-up: Let's say that at age 32, you put away $6,000 annually. At 8 percent interest, in 10 years you'll be nearly $60,000 behind the guy who started 10 years earlier and puts away half as much.

When I think of all the stupid **** I spent $3,000 and more a year on for the first 10 years of my working life, I want to lay down and have a good cry.

 

[micropolitan guy]

Lee cut their company match in half several months ago.

 

[deskslave]

There's a school of thought that suggests that 401(k)s WERE the market bubble that burst. All these people kept funneling money into the market, expecting that it would grow, and artificially inflating the value of the entire market.

 

[Shaggy]

I started my 401k at 22. With Social Security drying up, I'd be a fool not to.

 

[STLIrish]

Lee cut their company match in half several months ago.

I believe Lee wiped out matches entirely for many employees recently. They're hardly alone on that front.
On the other hand, who can blame them, or the 20-somethings who don't contribute.
I put 10 percent of every paycheck into my 401(k) and I have less money in it today than I did a year ago. True, I'm a long way from retirement, so plenty of time to earn it back and more, but I sympathize with those who think it's not exactly the best use of funds.

 

[mustangj17]

This makes me glad I started my 401k early. Even though I could have made more money this year putting my cash on the money line against the Lions.

 

[deskslave]

Lee cut their company match in half several months ago.

I believe Lee wiped out matches entirely for many employees recently. They're hardly alone on that front.
On the other hand, who can blame them, or the 20-somethings who don't contribute.
I put 10 percent of every paycheck into my 401(k) and I have less money in it today than I did a year ago. True, I'm a long way from retirement, so plenty of time to earn it back and more, but I sympathize with those who think it's not exactly the best use of funds.

I just think the line of reasoning that says it will automatically come back and continue to appreciate at 5 or 6 or 8 percent is flawed. Doesn't mean it won't happen. I just don't think it's guaranteed.

Also, bear in mind that for many 20-somethings, those matching funds are an illusion. Most places, you have to stay 5 years to be vested. In other words, the money's there, but if you leave, they take it back. And how many of us plan to stay at the same place for 5 years, especially those first few jobs? If, of course, we're lucky enough to have the opportunity to stay.

 

[Bump_Wills]

I just think the line of reasoning that says it will automatically come back and continue to appreciate at 5 or 6 or 8 percent is flawed. Doesn't mean it won't happen. I just don't think it's guaranteed.

Also, bear in mind that for many 20-somethings, those matching funds are an illusion. Most places, you have to stay 5 years to be vested. In other words, the money's there, but if you leave, they take it back. And how many of us plan to stay at the same place for 5 years, especially those first few jobs? If, of course, we're lucky enough to have the opportunity to stay.

Of course it's not guaranteed. But take a long view of the stock market and tell me what it does: It goes up. If you're in your 20s, the long view is the only one that matters. Right now, when the market is down, you're picking up bargains.

Even if you leave a job -- or are booted from one -- you have your own contributions (tax-deferred, I might add) and whatever compounding has occurred in the time you've been making them, which you can roll over at the next job.

Match, reduced match, no match, it's damned hard to make a case against a 401(k).

 

[Joe Williams]

A lot of us who began diverting money into a 401k a long time ago lost a lot of money, in absolute terms, this year in the market.

But we lost mostly "house money," gains we had taken from the market. Our contributions, by and large, still are there along with some growth -- just not what had been there a little earlier.

Had the tax man and our grubby little paws been all over that money for the duration, we'd be even worse off. The only thing worse than saving for retirement and having those savings take a hit in the market is not saving for retirement at all. Besides, if everyone is commensurately poorer over the next 25 to 50 years, supply and demand should bid down prices of ... everything ... a little, right?

That said, I know I'm going to be working five to seven years longer than I planned, at least. If, of course, any jobs exist by then. And the whippersnappers bother to fill them with old farts.

 

[Cadet]

401ks are great. But it's hard to get 20 somethings to think of anything beyond that next six pack.

Excuse you.

At my first job out of college I was pissed because they wouldn't let me have a 401k -- I was 22 and you had to be at least 25 to get into the company's program.

At my second job the company was so small they laughed when I asked about a 401k, much less employer matching. So I started my own IRA.

At my third job I FINALLY was able to take advantage of the "free money" I kept hearing about. I socked away the matching maximum and then watched half of it disappear when, after 18 months at the paper, I changed jobs and learned the vesting schedule was 5 years.

Now I'm at a shop that just cut matching, but it's OK because the vesting schedule is six years and I doubt my paper or its parent company will be around that long anyway.

I've been saving for retirement for almost eight years and NOT A SINGLE PENNY that I have has come from an employer.

Bottom line: People of all ages can be smart and dumb about money (sometimes at the same time!). My generation has learned that we will be 100 percent responsible for financing our lives: there will be no Social Security, no company pensions, no 401k matching, nothing. Maybe there will be credit. Or whatever we can stick under the mattress.

 

[2underpar]

Aren't you vested for a certain percentage of what you have put in even if you don't reach 100 percent vested?
i stayed at one shop for three years -- full vesting was 5 -- but i still have money in that account and my statement each quarter tells me how much it's worth for the time I was there.
I was on track early in my career to retire early -- i was shooting for 55. then 9/11 hit and i lost a lot. It took a while to earn that money back and finally got ahead again, and now this latest downturn has taken a pretty good chunk of what i had. I have no clue what I should be doing with my 401k until the market comes back. anybody got some advice? roll it over into a money market? bury it in the back yard? stay the course?

 

[Bump_Wills]

Of course it's not guaranteed. But take a long view of the stock market and tell me what it does: It goes up. If you're in your 20s, the long view is the only one that matters. Right now, when the market is down, you're picking up bargains.

Do you think the DJIA is ever going to hit 18,000 in our lifetimes?

Yes.

 

[deskslave]

Of course it's not guaranteed. But take a long view of the stock market and tell me what it does: It goes up. If you're in your 20s, the long view is the only one that matters. Right now, when the market is down, you're picking up bargains.

Do you think the DJIA is ever going to hit 18,000 in our lifetimes?

Yes.

Problem is, if it does, then the dollars that provide the share value are going to be worth less.

Again, not saying it's impossible. Am saying that just because it has always happened doesn't mean that it always will. There has to be a ceiling somewhere, and I fear we've found it.

Or, put another way, it once was inconceivable that the sun would ever set on the British Empire.

 

[Ace]

401ks are great. But it's hard to get 20 somethings to think of anything beyond that next six pack.

Excuse you.

At my first job out of college I was pissed because they wouldn't let me have a 401k -- I was 22 and you had to be at least 25 to get into the company's program.

At my second job the company was so small they laughed when I asked about a 401k, much less employer matching. So I started my own IRA.

At my third job I FINALLY was able to take advantage of the "free money" I kept hearing about. I socked away the matching maximum and then watched half of it disappear when, after 18 months at the paper, I changed jobs and learned the vesting schedule was 5 years.

Now I'm at a shop that just cut matching, but it's OK because the vesting schedule is six years and I doubt my paper or its parent company will be around that long anyway.

I've been saving for retirement for almost eight years and NOT A SINGLE PENNY that I have has come from an employer.

Bottom line: People of all ages can be smart and dumb about money (sometimes at the same time!). My generation has learned that we will be 100 percent responsible for financing our lives: there will be no Social Security, no company pensions, no 401k matching, nothing. Maybe there will be credit. Or whatever we can stick under the mattress.

That sucks, Cadet. But I wasn't talking about you. You and Lolly are obviously exceptional.