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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: LLCF who wrote (44537)1/15/2006 12:37:04 PM
From: John Carragher  Read Replies (1) of 116555
 
what is the deal for ibm.? i would prefer getting the contribution from pension into a 401k plan. long term i have to think money in stock market will do much better.

for example i retired ten years ago. i had choice take lump sum or take pension. i took lump sum discounted for age. I still feel i did the right thing vs taking a fixed pension at age 52 in addition to it being a discounted pension.

don't companies have fixed rate per cent for labor burden expenses? as i remember years ago the magic competitive number was 33% of payroll (included soc sec contribution). one company may not have a pension but gave full medical benefits. another may have had both but no contributions to 401k. I thought employee benefits were going to cafeteria plans.. you pick and chose how you want the fixed per cent of company contributions applied.

Most of pensions ,i was aware of, did not have inflation factors and began to lose value as soon as you retired. retirees living longer will usually end up with something worth a lot less than they originally expect after fifteen years of retirement.

If they get a better 401k plan i think retirees will have a better opportunity of a healthy retirement income than pensions.

they always have the alternative at retirement to buy an annuity.
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