Re:Are You Trading or Gambling?
by staticman2 on Saturday February 27, 2021 @12:55PM
(#26286642)
You have to compare the amount of money your buddy paid into the pension plan vs 401k to even begin to do an alalysis. (With or without the 401k/ employer pension match)
I have a pension and if I maxed out a 401k it would grow "bigger" but that means I'd be saving more than the pension plan payments that come from my salary require me to save.
I do know those numbers, he showed me. The contributions to the pensions were higher and the pension growth was just garbage for two reasons:
- there was no individual selection in pension investment. They are risk averse so you end up with bullshit total market stuff that gets tepid gains compared to US stocks.
- it’s impacted by the performance of the company. Many pensions invested part of the money into their own stock/industry so a downturn would impact both job prospects and the pension performance
Pensions are “I know better than thee” bullshit run by a company with some kind of elected moron deciding what happens with your retirement. No thanks
Pensions are terrible (at least based on performance so far). Not only do they provide worse returns, many are incentivized to lock you into a specific company for many years.
An friend of mine retired in 2013 and had pensions from the first 3/4 of his career and a 401k from the last 1/4. The 401k grew so much it paid out more than all of the pensions together when annuitized (even with garbage interest rates).