IBM freezes pension, switches to 401(k)

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But why don't they...

"As a number of studies have shown, unless people are encouraged or required to join 401(k)'s, they don't. Or if they do, they contribute a sensible amount given their current needs, but far from enough for retirement."

I think there are two main reasons: they don't see the need, because they have a pension and social security...they think. And secondly, because they can't afford to - many are living month to month.

"And then, as 401(k) holders know, the "reasonable" approach to 401(k)'s is to take some risks. In other words, they lost most gains and maybe some of the principle in 2001."

Lucky me...I had the bulk in bonds and money market in 2000-2001. The bonds grew handsomely during and after the bubble burst. But I agree - we can't count on social security to be there - it won't. The only thing anyone ought to rely on is themselves. And doing that requires getting enough compensation to be able to do some saving. Two things need to happen: a) people need to become more disciplined and pursue education more vigorously, in order to advance knowledge and skills and remain employable in highly paid jobs in a global economy, and b) the boom has to come down on executive excess, so that equitable proportions are given to the common worker.

Posted by: techboy_z   Posted on: 01/06/06 You are currently: a Guest | Members login | Terms of Use

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