Your opinion on retirement

curlilocks1207

We just had a department meeting (HR, payroll, and benefits) so our managers could fill us in on changes to our retirement plan. Currently the hospital I work for has a pension plan for employees, completely funded by the hospital and an optional 403B (much like 401K) that employees can choose to contribute to. As of April 1 they are stopping contributions to the pension plan, but matching 50% of employee's contributions to the 403B up to 6% of their salary plus an additional contribution at the end of each year, from 1-3.5% depending on how long the employee has worked here.

I think it is an awesome benefit, but one of my coworkers thinks it is terrible.  She doesn't contribute to her 403B right now, and doesn't think she should have to. She was counting completely on the pension plan for her retirement income. I figured it up and I will be money ahead with this new plan as long as I contribute 6% to it.

It just kind of surprised me that my coworker expects the hospital to save for her retirement, but she doesn't think she should have to as well. Curious to see what everyone else thinks about retirement. Do you have a pension? 401K or 403B? Does your employer match your contributions?

Lulu0802

My current company has a pension plan, they put away 3% of your salary.  They also have a 401k, which they do not match.  Since 3% is hardly anything, I also contribute to my 401k. 

I think it's naive to think you don't need to save for your own retirement.  Especially in this day and age.

And I think your company's new policy is still very generous.  Many of the companies I have worked for in the past would match 50% up to 4% of your salary, which is pretty standard around here.  50% up to 6% is great!  Especially with a little something extra at the end of the year.

duchess0727

For the vast majority, pension plans are a thing of the past.  They are very expensive to fund and as a result, the only places you really can expect one are schools, government agencies and unions.  The rest of us should expect to save for our own retirement.  I put 8% of my salary in my 401k and my husband puts 5%.  His boss matches 3% and my company matches 4% plus a discretionary amount at the end of the year which is around 5-6%.  I think that's pretty amazing.  We've discussed with our financial planner and he thinks this is more than enough for us to retire at 60 or so.

gypsywitch

DH and I are active duty air force and as of now, we both plan on retiring from the AF. After you retire from the military you receive a retiremnet check based on the rank you retired at and how many years you had in that rank, generally half of what you got paid on active duty is what you will get paid when you retire. While its a nice chunk, we don't plan on living off of that when we retire, and plan on investing in an IRA in the next few yrs ( we're still in our mid 20's, so we figure we have some time), likely after teh kids are out of daycare and that financial responsibility is gone (its a heavy one!) We are currently invested in some stock which we'll probably also do more of before retirement.  We'll also probably continue to work after we retire from the AF, DH is eligible to retire in just 12yrs at the age of 38, I came in later and can retire in 16yrs at the age of 40...far to young to leave the work force IMO. I'm pursuing my Bach degree in religious studies and will follow that degree through to a masters or beyond and work in that field after I retire from the AF. DH will likely continue to work for the AF as a contractor.

shouldbworkin

I worked for a company that had a pension and did something similar.  They rolled it over into the 401(k) and kept contributing at the same amount, but it was employee directed vs. them having the liability of managing the portfolio.  I was advised not to give to my 401(k) in my particular circumstances b/c my company contributed so much to my 401(k) and I was already vested.  If my company was contributing 1-3% of my income to a retirement account, I would probably contribute a bit more (whatever I could afford), but not above what was being matched. 

luvmagoldn

Employees hired before a certain date have pension plans with our employer.  They stopped offering it to new hires a couple of years ago but upped the match on the 401(k).  Having a pension is a wonderful benefit but I never would have counted on it to completely fund my retirement.

Maybe your co-worker comes from a family where their parents had big pensions back in the day?  Those days are OVER.

14years

I agree that your co-worker is very naive.  In this day and age, I would not rely on a pension plan.

DH and I both have 401(k)s, and neither of our employers matches contributions.  DH also has an IRA account, but he doesn't really make contributions to it anymore.

AmyCC1980

I fully expect to fund my own retirement.  I do not expect the government or any company that I work for to do it for me.  If a company matches 401K contributions, great.  But they don't have to.  My current company does not match anymore and I have never worked for a company that has a pension plan.  It scares me that there are so many people out there that just expect someone else to pay for their retirement years. 

pahokie

No pension - it has never been offered at any job I have had.

I have always had 401k's offered, with varying degrees of matching. Current employer matches 50% of the first 8% I contribute.  Considering a lot of folks have lost matching benefits due to the economy, I think this is excellent!

I am curious - how old is your coworker?  Would that pension really be enough to fund her whole retirement?  I guess there is social security as well, but at the rate things are going it may not be around forever.

curlilocks1207

She is in her early 30's. During the meeting the HR manager pulled up the pension info on another employee in our department who is about the same age.  Her estimated pension benefit for each month after she retired was $299 and change...not exactly a comfortable retirement in my opinion. She mentioned social security as well.  There is just no way I would feel comfortable depending on my employer and the government to fund my retirement. 

madhatter2003

Yeah, she's living in a dream world...pensions used to be huge, I know my grandparents have them and they are very comfortable right now, but not in this day and age for someone in their 30s!

 

SoldiersGreenBean

I think the only person you can count on to take care of yourself, be it now or in retirement, is you.  Therefore, it is up to you to save the money.

Using that philosophy, both DH and I contribute to our 401K/TSP.  We also have Roth IRA accounts.  It's never too early to start saving, especially as costs continue to rise.

Plus, we want to have fun when we retire!

Pesky

My old company had both a pension plan and a 401k with up to 6% matching.  Those were the days.  They got acquired and it all went away.

Like pp said, pension plans are a rarity nowadays.  My current company only has 401k.

Mini_Mariah

Like some of hte PP's mentioned, I'd never feel comfortable relying on someone else for my retirement.  DH and I both max out our 401K's.  I get 3% matching, but I don't think he gets any.

Maybe our parents and grandparents could rely on their pensions and social security for retirement, but those days are long gone!

Sharon&Paul

I still have a pension and a 401k through the hospital I work. the pension is a calculation of the years you worked and your highest salary for three consecuative years. I can totally see you co-worker being pissed if she gave many years to the company. I will be walking away with about $70,000/year by the time I am 50. I could definitely retire or cut back to PT with my pension, 401K, savings, and husbands retirement. I definitely do better with a pension than a 401K match (even though I get both). if you plan to retire early a pension is better.

SportsLover

I have a pension through my school district and DH has one through his old employer.  7.5% of my salary goes into it.  However, our pension is in jeopardy in PA because PSEA is having funding issues.  The vast majority of our retirement goes into our Roth IRAs which we try to max out depending on how the year is going, hubby's 401K, and a 403B.  I'm also the type of person who is hoping to work until I'm 65.

annabella10

Lulu0802:

I think it's naive to think you don't need to save for your own retirement.  Especially in this day and age.

 

50% of 6% is amazing... it seems VERY naive of your coworker to think that 'someone else' is going to provide for her retirement...I'm actually kind of shocked that people still think that way.