Has the 401(k) retirement system failed?

Has the 401k system failed us?

It’s been over 30 years since the 401(k) retirement system went into effect in 1978. Now it is the most prevalent form of retirement saving. However, the 401(k) plan is not working out for many because Americans near retirement age have very little retirement saving. Of Americans near retirement age in 2010, 75% had less than $30,000 in their retirement account. (US Census Bureau’s Survey of Income and Program Participation.) Many retirees will be relying solely on Social Security benefit and that’s not enough for a comfortable retirement. So has the 401(k) retirement system failed? Teresa Ghilarducci thinks so and […]

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Who the heck has $3,000,000 in their IRA?

Obama cap 3 million IRA Mitt Romney $100,000,000 IRA

Have you paid attention to President Barack Obama’s 2014 proposed budget? It includes a provision to put a 3 million dollar cap on your tax-preferred retirement accounts. This proposal would generate $9 billion in revenue for the Treasury over the next decade according to White House. Actually, the limit would be based on the amount needed to buy an annuity that will pay $205,000 per year. What’s my cap? First of all, it seems a little silly to base the limit on annuity. The payout varies according to your age, sex, inflation, and interest rate. If you are a 62 […]

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Pension – Take The Lump Sum Or Monthly Payments?

lump sum or annuity monthly payment

All right! I finally got my pension estimates back from Fidelity. Last time, I was leaning toward rolling it over to an IRA, but let’s crunch the numbers and see if this plan still makes sense. First of all, the lump sum looks much better if I take it out January 2013 instead of December 2012. I’m not exactly sure why it took a miraculous 60% leap, but this is much more tempting now than when it was under $10,000. Just by looking at the table here, I guess that the best date to receive the Lump Sum would be […]

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Intel gave me a surprise farewell gift!

pension surprise unexpected

Wow, I have a pension! I never expected anything to come out of Intel’s pension plan so it’s nice surprise. It’s a small pension, but it’s better than nothing.  The way it works is if Intel’s 401(k) contribution and social security isn’t enough to support your retirement (based on your final pay), then they would kick in the difference. You also have to work there long enough for the pension to be vested. I’m not exactly sure how long this is. I guess it is 7 years, the same as the profit sharing plan (Intel’s contribution to 401k.) Here is […]

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