Twelve Tips for a Better 401K!
Many employees a generation ago could look forward to a predictable pension at retirement. Employers were responsible for investing the monies set aside for these “defined benefit plans;” employees could focus on more pleasurable tasks.
Today, most employers have ditched pensions in favor of “defined contribution plans” a/k/a 401Ks or, in the case of public/nonprofit sector employees, 403Bs.
That makes us responsible for instructing our employers to deduct sums from our paychecks for our retirement, and largely puts the headache of how to invest those monies into our laps. That responsibility carries it with peril, if we mismanage those investments, or opportunity, if handled wisely.
While each 401K plan has its own set of investment choices, review of countless plans reveals recurring opportunities andpitfalls. While there’s no substitute
for a careful review of the details of your plan, here are twelve pieces of advice likely to be helpful:
1. Fill it Up ASAP
Needless to say, you can’t profit from your 401K unless you contribute to it. Many companies match contributions. If so, that’s an immediate 100% return on the amount you contribute! You’re further incented since it may cost you as little as 60 cents of current cash flow for each dollar invested because contributions are typically tax deductible.
What’s more, all earnings are tax sheltered, so it behooves you to accelerate contributions. Indeed, if your employer will let you, have your entire paycheck contributed in the first few months of each year until you hit the maximum amount the tax law allows you to sock away – generally in the 20% of salary area. In 2012, the dollar cap is $17,000 for most employees and $22,500 for those aged 50 and older.
Actually, it’s not the nuances of the tax law that make the 401K so valuable. The more important aspect is that it serves as a virtual piggy bank. Whatever you can get into the 401K is unlikely to come out for that whimsical purchase, and is also shielded from creditors. The 401K is a great tool to enhance financial discipline.
2. Roll It Out and Consolidate
Many 401Ks are owned by ex-employees, and were “left behind” when the employee cleaned out his desk to leave the job. If that’s you, transfer it to an IRA without delay. It’s typically costless and tax free.
In an IRA you’re not limited to a 401K’s restricted list of investment options. Even better, you’re not limited to funds, so you can sidestep the fees, the opaqueness, and the duplication that fund investing can entail. With the right IRA broker, nearly every investment imaginable is available to you.
By consolidating this rollout with any other IRAs you may have you can reduce account proliferation. That can help focus plus potentially reduce costs further, as you’ll have a bigger account to work with. It also reduces the risk the account is forgotten, either by you or your heirs after your death.
3. Integrate it With Your Other Holdings
Don’t invest your 401K in a vacuum, as if that’s the only account you own. That’s the problem with settling for many default options, based only on your age. For example, you may have plenty of stocks elsewhere, and need to focus on fixed income. A healthcare oriented mutual fund may not make sense if you’re set to inherit a boatload of Merck stock. Your financial profile may be stronger or weaker than is typical for your age, so accepting a one size fits all investment program in your 401K, even if customized for your age, may be the wrong approach.
The correct approach is to create a spreadsheet of your assets. Then, develop a game plan for the entire nest egg. Only then can you invest your 401K so it plays the right supporting role.
4. Reduce the Diversification
The usual mantra is diversify, diversify when it comes to investing. Not so when it comes to mutual funds. That’s because each mutual fund typically contains hundreds of stocks. It’s typically managed to be a stand-alone portfolio; single stock risk is virtually diversified away.
So, adding another stock mutual fund to your 401K typically results in duplicated positions. Fund A may own Merck and decide to sell while Fund B buys. The left hand doesn’t know what the right hand is doing. You end up paying for transactions that are not sharpening focus but merely canceling each other out.
The problem can even occur with a domestic fund and an overseas fund, because so much of investment return is driven by the sectors involved, not the location of the companies. Thus, if domestic Fund A decides to buy Exxon to take advantage of rising oil prices, international Fund B may be selling BP in anticipation of falling oil prices. At the end of the day, your portfolio’s focus is dulled but expenses are higher.
So, make sure each fund in your 401K is truly necessary. Less is more when it comes to your 401K funds.
5. Prefer Cheaper Funds
Examine carefully the operating costs of your 401K fund choices. Gravitate to ones sporting lower costs. As the fund researcher Morningstar’s study found: “In every single time period and data point tested, low-cost funds beat high-cost funds." Or, as fund company Vanguard states: "If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision.”
In many cases index funds are less expensive and are good 401K picks.
6. Avoid Strategies You Don’t Understand
It is common for 401K sponsors to offer many exotic and or hedge fund strategies among your 401K fund choices. Avoid them.
They are often touted as a way to reduce volatility yet provide returns superior to fixed income. Yet, you may already have that if you have a well-diversified 401K portfolio.
Novel strategies by definition don’t have long track records, so predictions are harder. Novel strategies are premium choices; fees will be higher, and many less apparent ones, like borrowing costs and trading commissions, greater.
The names of funds of this ilk often include the phrases “hedged,” “long-short,” “futures,” “tactical,” etc. The promise is always less risk, more return. Bet against that being the reality.
Bottom line, if you can’t explain the strategy to your spouse, steer clear.
7. Asset Allocate and Rebalance
Your 401K should include a fixed income selection and an equity fund selection. A case can be made for an allocation to overseas as well as small cap securities. The theory is you reduce your risk if you diversify widely, and your portfolio experiences less volatility overall if you include some asset classes that typically zig when others zag.
Whatever is the bottom line allocation, commit the percentage allocations to writing, and rebalance whenever there’s a material skew from the initial allocation. This will happen as some funds’ values change relative to the others.
Rebalancing forces you to sell some of the outperformers and add to the laggards. That’s a sound strategy to reduce risk and enhance returns but it’s tough to execute unless you develop a written asset allocation plan and adhere to it. Some 401K plans allow you to sign up for automated rebalancing, and we think that makes sense.
8. Don’t Market Time and Avoid Trading
We all occasionally pick up the newspaper, read a horrific article, and instinctively want to take cover with our investments. Don’t. Here’s why. First, if it’s in the newspaper the news is already widely disseminated. The prices of your investments are bound to reflect the implications.
Any trade of your investments assumes there’s another party willing to take what you want to unload. Don’t assume they are suckers.
That is not to say that if there’s a change in your financial picture, either a negative one, say a health setback or a job loss, or a positive one, say an unplanned inheritance, that it’s not appropriate to rethink your investments with a view to rejiggering your risk/reward profile.
9. Avoid the Big Wall Street Names
Many 401K plans include funds choices from different sponsors. Some are Wall Street names which have been in the news amid allegations of not putting the client first. Others are extremely heavy advertisers. Funds sponsored by names in either of those categories are suspect: They are more likely to be linked with novel strategies or charging high fees to pay for that advertising, etc. Avoid.
Investor owned sponsoring organizations, a/k/a “mutuals” are less likely to commit those sins, and more likely to offer lower fees. Vanguard is an excellent example, and their funds often make great 401K choices.
10. Don’t Chase Performance
You can’t buy past performance. You want to buy low and sell high. Yet most 401K owners invest in the top recent performers. Unfortunately, the research shows all strategies, portfolios, managers and asset classes have periods of underperformance. By jumping in after the good times, and bailing after the bad, investors set themselves up for sub-par returns.
Choose intelligent asset classes and strategies without regard to recent performance. Indeed, consider funds with intelligently constructed portfolios after a period of sluggish performance. Your 401K provider typically has carefully screened your fund choices, so jumping into a fund after a period of weak performance will often make more sense than the opposite.
11. Avoid Cash
Most people on the planet hold cash because what little they have is needed for short term needs. As a 401K owner, you’re one of the luckier ones who have some resources that can be invested for longer term goals. Don’t invest in a way that suggests you have to devote the money to next month’s rent.
This is particularly true today, with yields on money market funds, a/k/a cash, nil. Oh sure, you might get lucky and time the market and be able to use the cash to pile in after a market selloff. But, that’s unlikely. Stay invested.
12. Consider Tax Inefficient Strategies Best Avoided in Taxable Accounts
Long term capital gains on stocks, as well as their dividends, enjoy a reduced tax burden if held in a taxable account, but no tax advantage if held in a tax sheltered account. Nearly every other type of income producing security, save for municipal bonds, receives no tax advantage when held in a taxable account, but is completely sheltered from taxes in a 401K.
Accordingly, if preferred stocks, CDs, high yield, corporate, foreign, Federal, or agency bonds, or convertible securities are part of your overall strategy, you’ll maximize the tax sheltering benefit of your 401K if held there. Any high turnover equity strategies would also be more strategically held in your 401K. Finally, some commodity based funds are taxed less favorably than traditional equity funds, so may also be better held in 401Ks.
KC
12:43 am on Wednesday, October 3, 2012
I have just one tip for a better 401K plan - It is called a defined benefit plan!
Monk
11:48 am on Wednesday, October 3, 2012
Depending on overpromised benefits is foolish. You risk the company/government going bankrupt attempting to support a greater burden than it is capable of. Self-reliance is more admirable than dependency.
Joanne Smythe
1:24 am on Wednesday, October 3, 2012
http://usatoday30.usatoday.com/money/perfi/retirement/2008-10-30-retirement-401k-funds-stocks-savings_N.htm
Older Americans are watching their retirement savings evaporate as the economy slumps and the stock market falters. John Hansen, 54, has lost 35% to 40% of his 401(k) savings and, like many close to retirement, says he has few options.
A middle manager at a company in Cohasset, Minn., Hansen planned to retire at 59 1/2 but now doubts his savings will rebound fast enough.
"I've run out of time," he says. "I'm going to have to work until I'm 70."
Today, 401(k) plans are the major source of retirement income for millions of Americans. The bear market underscores their risks.
"We're seeing that those funds were never guaranteed, that the stock market can go down and stay down and that the fees can erode earnings and contributions so that people end up with less than they put in," says Teresa Ghilarducci, professor of economics at the New School for Social Research in New York.
B@B
6:48 am on Wednesday, October 3, 2012
That's odd to me. My 401(k) has done great in the last 4 years as the Dow has gone form 7900 to 13,500. Perhaps Mr. Hansen lost his savings because he panicked in 2008 and ran to an all-cash position. I'm not defending 401(k)'s, they are not guaranteed and served only to get companies out of having to give pensions. But if you lost that much in 2008 (and I did too), and you didn't hang on, then yes, you have not recovered. But if you hung in there, your 401(k) is worth more than it was in 2008....a LOT more.
Phil McConkey
6:51 am on Wednesday, October 3, 2012
So Joanne, what's your point. That the guy didn't pay attention to the stock market and when the economy was tanking didn't realloacate his funds to bonds to ride out the storm. Or maybe educate himself and look at energy funds (which have done well since 2008) or some dividend paying stocks. People need to stop whining and pay attention to their own money and be held accountable for their actions. And he must have had a nice pension or a larger then most 401k if he planned to retire at 59.
Paul J. DiBartolo
11:33 am on Wednesday, October 3, 2012
B@B...4 years...
October 3rd, 2008 - DOW @ 10,325
October 3rd, 2012 - DOW @ 13,491
Yes that's a gain but you fail to mention that on January 4th, 2008, the DOW was at 12,800. If you had guts of steel and didn't try to reposition during that time that the DOW collapsed from 14,000 to 6,600, you accomplished what many had a hard time doing. That aside, even if you left your money intact during the 4-year run of the DOW you speak of, the gain has been 31% / 4 years = 7.75% per year. Acceptable but not stellar and why would anyone put their money at risk for less than 8%? I just got an up-front 8% bonus for investing money in a guaranteed life insurance fixed annuity.
Here's what you don't consider...people who, for whatever reason, needed to access their 401ks during that time (say, retired people over 70 if they were foolish enough to stay in the market) and, how about this scenario, people who had significant holdings in GM preferred stock.
BTW, "...if you hung in there, your 401(k) is worth more than it was in 2008....a LOT more."
I don't consider 30% over 4 years "a lot more." So, what's your plan for 2013? If you're anywhere near retirement you might want to reconsider your hold strategy.
FourScore
1:21 pm on Wednesday, October 3, 2012
"Yes that's a gain but you fail to mention that on January 4th, 2008, the DOW was at 12,800. If you had guts of steel and didn't try to reposition during that time that the DOW collapsed from 14,000 to 6,600, you accomplished what many had a hard time doing. That aside, even if you left your money intact during the 4-year run of the DOW you speak of, the gain has been 31% / 4 years = 7.75% per year. Acceptable but not stellar..."
What you fail mention is what would have happened if you panicked and dumped all your stocks at the end of 2008. That would have been a huge loss, as opposed to a 7.75% per annum gain.
KC
1:09 am on Thursday, October 4, 2012
And just wait til people go to withdraw those 401K funds. Then they will see how effective a retirement vehicle they are. They won't even get kissed first.
B@B
7:30 am on Wednesday, October 3, 2012
Exactly, Phil. It's funny how the very same people who parrot the Republican line about personal responsibility don't want to take the consequences of their own foolish investment decisions. The fact of the matter is that successful investing is a complicated business -- one that most individuals have neither the expertise nor the time to do well. So when everyone responded to the siren song of self-directed investment accounts, well, this is part of it. I'm not a Wall Street banker, nor an experienced investor, but I do have gray matter in my cranium and as such I do know that if you do not get out of stock-related investments before a crash, you might as well hang on. Buy high/sell low is no investment strategy.
Tommy P
10:14 am on Wednesday, October 3, 2012
What entitles YOU to other people's money? Why should other people be responsible for YOUR retirement?
bo bo bagens
10:32 am on Wednesday, October 3, 2012
In NJ, thanks to the Democrats the unions are entitled to us paying high income, sales and property taxes for their pensions. Are you not OK with that?
William Mays
4:17 pm on Wednesday, October 3, 2012
Public employees work for your benefit, therefore they are entitled to part of the taxes that both you and they pay. Its a pretty damn simple concept.
bo bo bagens
8:29 am on Wednesday, October 3, 2012
Yeah, let's have pensions for everyone. That's working well now. Who do you want to pay for yours? Me?
Phil
11:48 am on Wednesday, October 3, 2012
Pensions will work if the state had made their contributions as required by law/contracts instead of skirting them for 20 years.
bo bo bagens
11:57 am on Wednesday, October 3, 2012
Really Phil? Where was the money supposed to come from? The free money fairy? If NJ is already taxed to death and the state could't put money in the pensions, where do you propose it come from? Face it, no amount of contributions paid for by the taxpayers can justify the system. It's amazing how many people don't even know they are being used and abused to pay taxes for someone else's pension at the expense of their own.
Eileen Rite
5:06 pm on Wednesday, October 3, 2012
Billy Mays, here's a pretty damn simple concept for you; We pay taxes on money we earn in the private sector, and that taxed money is used to pay public employees a salary which benefits THEM, and the money they use to pay their "taxes" is actually OUR money that came from OUR job in the private sector.
Kevin Nedd
5:16 pm on Wednesday, October 3, 2012
Eileen,
Your analysis is a bit incomplete. The public sector employee who's salary is paid for by private sector employees generally provides a service that in many cases ENABLES the privates sector employee to do their job more effectively or with a lower degree of risk. It's about economic value; its not always just about the money.
KC
1:11 am on Thursday, October 4, 2012
Works for me bo bo. I have one of each. The 401K fund despite aggressive investing will about buy me a luxury vehicle. The monthly pension - priceless.
Eileen Rite
10:29 am on Thursday, October 4, 2012
Kevin Nedd, you are correct. It's a symbiotic relationship between municipal worker and taxpayer, but unfortunately, people like Mays just don't seem to get that point. It's like when you read about the teachers and their unions going on strike for the kids...yeah, right! As Albert Shanker famously said; When the kids vote, that's when I'll (the teacher's union) represent them
Gunny
2:41 pm on Monday, October 8, 2012
And if "they" do away with the public pension system? Whose money will the great, honerable politicians have to play with? Don't forget! The money was there. Over 100% funded. Would've lasted forever if it wasn't raided by the pirates we all call leaders. Stop the blame game.
Phil
3:54 pm on Monday, October 8, 2012
bo bo, it was always an untouchable line-item in the budget until Whitman made it optionally. Kind of like the transportation trust fund that's supposed to run. Maybe if these items hadn't been made "optional" our state spending would have been curtailed all these years.
Michael Megill
9:23 am on Wednesday, October 3, 2012
B@B . . . who is "parroting" the Republican line in the article or thread? How does politics or party alignment come into play regarding an article on tips to better results on 401k investing? Please try and keep on topic and not to politicize a good article and conversation.
mrvrnj421
10:35 am on Wednesday, October 3, 2012
Thank you! I was going to say the same thing...
tryintosurvive
9:39 am on Wednesday, October 3, 2012
"A middle manager at a company in Cohasset, Minn., Hansen planned to retire at 59 1/2"
I think is at the heart of the problem. Most people would like to retire relatively young, but this is not practical for the vast majority. Why does someoone feel that they have a right to whine if they can't retire 6+ years ahead of everyone else. This person is a middle manager for goodness sake, among millions and millions of them. He/she should be thankful that he is employed and can retire at all.
marylou
11:22 am on Wednesday, October 3, 2012
Perhaps he planned on "retiring" at that age because the company he works for has a habit of letting employees go when they are older.
XJS
11:25 am on Wednesday, October 3, 2012
He probably feels like he has the right to "whine" because he did what he could to save his money now for the future. Maybe he didn't have cable tv or the newest cell phone. . .maybe he sacrificed the pleasures of owning it all now for the potential to retire early and enjoy his later years. So he's upset that he lost it all. That stinks. You'd feel the same way. And maybe if more people were interested in saving for their individual futures and less interested in camping out for the iPhone 5, there'd be less of a debt problem in this country.
But I know one thing -The man worked for a living, took what he earned and tried to make it so he could retire early. Now he can't. If that's not worth being upset over, then I don't know what is.
KC
1:03 am on Thursday, October 4, 2012
People should be grateful they still have the option to work til 62 or beyond. Most employer scum lay older employees off and hire newer cheaper ones. There is a By the Sea Learning Center in Howell famous for that.
take_the_power_back
10:06 am on Wednesday, October 3, 2012
Is this guy serious? " Indeed, if your employer will let you, have your entire paycheck contributed in the first few months of each year "
1. who the hell can afford to do that?
2. Anyone who can afford to do that doesn't need this guys advice on managing a 401k, nor do they even need a 401k.
Tommy P
10:10 am on Wednesday, October 3, 2012
There are many people in Fair Lawn that could do that. But you are right, this guy's advice is a bit crazy. He is promoting his industry's view on how to plan for retirement which is how he earns his living.
KC
1:13 am on Thursday, October 4, 2012
I thought the same thing lol. He is on fairy dust.
MadLaxDad
10:39 am on Wednesday, October 3, 2012
The problem with the 401k is that most people lack the understanding of investing and financial planning to do it well. It puts all the investment risk on the participant where as a DB plan puts it on the provider. Its the equivalent of your cardiologist handing you a medical book and telling you everything you need to fix your heart disease is in the book and sends you out the door.
Companies provide employees these plans but only a bare minimum of advice and education. There is too much liability for an employer to provide employees with quality advisers who may be able to assist those in needs, instead they provide only what is required in the form of general meetings and online tools.
KC
1:15 am on Thursday, October 4, 2012
Not only that - but many small businesses contribute nothing to the employees' plans! THEY MAKE NO MATCH! They do however get kickbacks from whatever fund they offer their employees. A defined benefit plan will outdo these senseless 401Ks any day of the week.
Local
10:56 am on Wednesday, October 3, 2012
Where's the worker outrage? A 401K by definition is ONLY a SUPPLEMENTAL PENSION it was never meant to provide for an adequate pension to live on. The traditional pension plan is disappearing. In 1980, some 39 % of private sector workers had a pension that guaranteed a steady payout during retirement. TODAY THAT NUMBER STANDS CLOSER TO 15%. While those decrease in pension benefits are happening chief executives at the largest companies are PAID 343 TIMES More than the pay of a typical worker, that's up from 1980 when it was JUST 42 TIMES the pay of typical worker!
Joe Smith
11:07 am on Wednesday, October 3, 2012
Tonto is spot on! 401(k) plans were originally intended to be a savings plan to help supplement retirement income, not replace it. Corporate America duped people into getting rid of traditional pensions that was guranteed steady income to risky 401(k) plans which are a total crap shoot. You can best believe that CEO's get nice hefty traditional pensions AND nice savings plans.
bo bo bagens
11:15 am on Wednesday, October 3, 2012
Guaranteed income? Paid for by whom? guaranteed by what? Fake Government debt? Promise to tax future taxpayers? Raise property taxes? Force companies to cut staff to pay pensions? Pensions are a scam and the public knows it!!
Reminds me of the scene in Tommy Boy
Tommy Boy: Let's think about this for a sec, Ted, why do they put a guarantee on a box? Hmm, very interesting.
Ted: I'm listening.
Tommy Boy: Here's how I see it. A guy puts a guarantee on the box 'cause he wants you to feel all warm and toasty inside.
Ted: Yeah, makes a man feel good.
Tommy Boy: 'Course it does. Ya think if you leave that box under your pillow at night, the Guarantee Fairy might come by and leave a quarter.
Ted: What's your point?
Tommy Boy: The point is, how do you know the Guarantee Fairy isn't a crazy glue sniffer? "Building model airplanes" says the little fairy, but we're not buying it. Next thing you know, there's money missing off the dresser and your daughter's knocked up, I seen it a hundred times.
Ted: But why do they put a guarantee on the box then?
Tommy Boy: Because they know all they sold ya was a guaranteed piece of crap. That's all it is. Hey, if you want me to take some of that and put in a box and mark it guaranteed, I will. I got spare time.
KC
1:17 am on Thursday, October 4, 2012
Worker outrage got checked when they surrendered their balls. RIP American workforce and workers' rights. Welcome scab labor. Marque numero uno para Espanol.
bo bo bagens
11:04 am on Wednesday, October 3, 2012
Tonto you mean where's the outrage from the taxpayers for getting stuck with the trillion dollar unfunded liability for these giveaways to union workers? Where's the outrage from GM non-union people who lost their pensions while the unions kept theirs when Obama filed for bankruptcy?
If NJ got rid of the pension system, taxpayers would see $4-5 Billion annually in tax relief.
http://online.wsj.com/article/SB10000872396390443890304578010752828935688.html
Local
11:15 am on Wednesday, October 3, 2012
Let's help & support CEO's like Romney! Yeah right. So you're happy with CEO's receiving 343 times more pay than typical workers up from 42 times in 1980 as real worker pensions disappear?
Remember 2 wars & tax cuts for the wealthy NOT PAID FOR & a near ECONOMY COLLAPSE, A NEAR Depression CAUSED THE DEFICIT BEFORE OBAMA STEPPED INTO OFFICE, Democrat Clinton left BUSH with a hefty SURPLUS !!!!
bo bo bagens
11:24 am on Wednesday, October 3, 2012
You are such a tool and a liar. Let's go ahead and borrow $1 trillion a year from China and give out free phones and free healthcare and free houses. Hey it don't cost nothin right...who cares about the debt. Obama just said it was irresponsible to get elected. Now it's COOL!!! Aint no big thing!!!
The only things NOT PAID FOR are entitlements!!! Medicare spends $800 B and takes in $200B. $600 B UNPAID FOR.
Tax cuts can't be unpaid for. Spending can be.
in 2008 spending was $2.8T and in 2012 it was $3.8 T. Obama spends $1 T more a year and borrows the money from China. Did the wars increase by $1 trillion UNDER OBAMA? if not, where is he spending this new $1 trillion we don't have?
Year Total
Receipts Outlays Surplus or Deficit (–)
2007 2,567,985 2,728,686 -160,701
2008 2,523,991 2,982,544 -458,553
2009 2,104,989 3,517,677 -1,412,688
2010 2,162,724 3,456,213 -1,293,489
2011 2,303,466 3,603,061 -1,299,595
2012 estimate 2,468,599 3,795,547 -1,326,948
bo bo saggins
4:19 pm on Wednesday, October 3, 2012
bo bo bagens - Patch Troll or just straying off the point?
Tonto is right - the 401k was intended as a supplemental plan, As much as you want to drag the topic of tax payers contributing to NJ pensions and like to spread Mitten's gospel, stick with the point he is trying to make that 401k's are not the solution (good article on the topic - http://www.time.com/time/magazine/article/0,9171,1929233,00.html) as well as the other point mentioned (http://money.cnn.com/2012/04/19/news/economy/ceo-pay/index.htm)
KC
1:19 am on Thursday, October 4, 2012
And you better become bi-lingual fast Bo Bo. Or Keep Waiting for Godot.
Jrz Shore
4:09 pm on Monday, October 8, 2012
Stop drinking the Cool Aid Bo Bo. While Whitman gave all NJ municipalities a "holiday" on pension payments for seven years and every governor over the past 16 years has not paid their required payments into the pension system, have you ever received a tax relief check or notice from your town or state? NO!
kemosabe
4:25 pm on Monday, October 8, 2012
Jrzeshore - where would the extra loot have come from to fund the precious pensions of the few at the expense of the overburdened taxpayer?? Did Corzine not do it because he didn't want to or had to hand out the cash to his union pals like the NJEA. It's just simple arithmetic. All we need to know is where the pension money should come from.
Local
12:02 pm on Wednesday, October 3, 2012
2 Cheney Wars Not Paid for & tax cuts for the Rich NOT PAID for! "Income inequality in America is greater than it has been since the nineteen-twenties, and since the seventies the tax rates of the wealthiest have fallen more than those of the middle class." "the median gross, inflation-adjusted income of American males in 1968 was $32,137. In 2010, it was $32, 137." "From 1980 to 2005, more than 80 % of the total increase in American's income went to the top 1 %." "Change in the median household wealth of white families since 2005: minus 16%. Change in median household wealth of Hispanic families since 2005: minus 66%." "The upper 1 % of Americans account for nearly a quarter of the nation's income and control 40% of the wealth. 25 years ago, the figures were 12% and 33%." "Median CEO pay jumped 27% in 2010 while workers in private industry saw their compensation grow by just 2.1 %." "Income inequality is more severe in the U.S. than it is in nearly all of West Africa, North Africa, Europe and Asia." "The top 1/100 th of 1 % of households, using 2008 data, averaged $27 million per household, including cap. gains. The average income for the bottom 90% was $31,344." " From 2007 to 2009, Wall St. profits rose 720 %, while unemployment rate continued to climb and American's home equity fell 35%." "Percentage of profits American corporations paid in taxes in 1961: 40.6%, percentage American corps. pay in taxes today-----10.5 % ."
Joe R
12:03 pm on Wednesday, October 3, 2012
401ks are the biggest garbage scam. If millions of people lost their 401ks because of the economic crash, then they are all just dummies, tough luck on them. It's a lottery, there are winners and losers because playing the stock market is just so easy, easy as pie, piece of cake. Let them eat more pie and cake.
KC
1:21 am on Thursday, October 4, 2012
What?
bo bo bagens
12:10 pm on Wednesday, October 3, 2012
Lie lies lies Tonto. Spending creates deficits.
The deficit in 2007 was $168B when the country had its highest ever level of tax revenues
The deficit in 2012 was $1.3 Trillion
That's for 1 year. Explain that to us will ya? Did the WARS COST MORE all of the sudden? NO, spending on entitlements is up $1 trillion a year since then. Of course, they ARE NOT PAID for unless BORROWING from CHINA counts.
Debt in 2008 = $9 T
Debt today = $16T
Did the wars magically cost another $7 TRILLION DOLLARS???
You should seek some math tutoring
Joe R
12:55 pm on Wednesday, October 3, 2012
Spare me all this false concern about the deficits. It's just a straw man argument to kill off Social Security, Medicare, Medicaid or anything that helps ordinary Americans. If we are so broke, why aren't we pulling out all our troops from all the war zones, closing down all the bases, cutting back on the FBI, CIA, the military? No one cared about deficits when Bush was in office. Cheney said that Reagan proved that deficits don't matter. If Romney wins, no one on the right or the GOP will object when he triples the deficits.
bo bo bagens
1:01 pm on Wednesday, October 3, 2012
Was it a strawman arguement when Obama campaigned on it too? I suppose he is just a liar. The deficits have more than doubled under Obama. Don't try and make excuses. It is big, it is real and it is killing us. The challenge is what is going to be done about it. How could Romney triple the debt....why don't you explain your logic? If the debt is $16 trillion are you saying he would take it to $48 trillion or did you just blurt out some stupid number? It's all excuses and finger pointing with you. The spending is $1 trillion more than 2008. $1 trillion. Are you ok with that? The debt is $7 trillion higher. No big deal just vote for the idiot who did it to us is your solution. Come on Joe R, what else you got???????
bo bo saggins
4:19 pm on Wednesday, October 3, 2012
bo bo's Jimmies are getting rustled
Moist Cake
12:44 pm on Wednesday, October 3, 2012
Hey lets face it, bo bo is just jealous of the fact that he or she couldn't pass a simple civil service test for that pension. Im sure he believes in a magical 401k just like those suckers who bought into the idea of investing all your retirement money. Your odds are better in Las Vegas then on Wall Street buddy.
401k's are worthless but a nice little scam that employers call perks. It isnt anything but gambling.
Hey there is hope though, I think its safe to say this election is OVER! goodbye tea party.
simets99
2:54 pm on Wednesday, October 3, 2012
You don't really believe this do you? If you consistently contribute to your 401K and just keep in a Target Date Fund or an Index Fund you'll be ok over the long haul. I got killed in 2008 like everyone but my 401K has bounced back is worth significantly more than it was before the financial crisis. The key is to continue to contribute. A 401K requires personal responsibility which I don't think is a bad thing.
bo bo saggins
4:18 pm on Wednesday, October 3, 2012
401k is a scam. But it is one of those scams that we still want to believe in. Sort of like Santa or the Tooth Fairy.
KC
1:04 am on Thursday, October 4, 2012
Many people passed and exceled at civil service but were the wrong flavor of ice-cream. All they got was a tell us your color form in the mail.
Monk
12:56 pm on Wednesday, October 3, 2012
Tonto and Moist Cake, why fixate on someone else's financial status? What's it to you? Are you envious? It wasn't taken from you. It's someone else's property and you are not entitled to it. You want more? Work harder. What? You still want a defined benefit pension? Then you had better work your tail off to make the company prosper and able to deliver on it. And you'd better hope your coworkers and the workers after you do the same. The rich guy isn't using his money for toilet paper anyway. He's investing it as smartly as he can. He's trying to pick companies that are well run and growing. What? You don't want companies to be supported for being well run and growing? I'll never understand the "Eat the rich" strategy. So, after all the rich are eaten, then what?
KC
1:23 am on Thursday, October 4, 2012
Off with their heads.
h8r
1:00 pm on Wednesday, October 3, 2012
Just a head's up on recommendation #1, depending on the company's plan design/match formula, you may be foregoing company match by up-fronting your deferrals in a particular year. It's a complex little nuance that has led to something called "true-up" contributions from employers, but not all employers have implemented true-ups.
bo bo bagens
1:05 pm on Wednesday, October 3, 2012
h8r that's a great catch. Also think of the evil company match as a ROI. Can you believe companies actually provide benefits to their employees out of profits? WOW imagine that. If you put in 6% and they match 3%, that's 50% ROI before you invest. That's also saving 9% of your wages. If you work for NJ if you put in 9% you get back 100% since taxpayers pay for the benefits. Sadly, 25 million people don't have even this option right now to contribute to a 401k as they cannot get a job thanks to the failures of the Democrats and Obama
bo bo saggins
4:17 pm on Wednesday, October 3, 2012
bo bo - tell us all what Mittens will do for us? Wait - let me get some tea and comfortable. You like tea?
KC
1:29 am on Thursday, October 4, 2012
You are correct. I worked for a company that made contributions like the weather. If they felt like contributing during one tax year they did. If they felt like not doing so they didn't. Drove my accountant nutz. If people are depending on the goodness and honesty of employers they are gonna lose their shorts. That doesn't even factor in market fluctuations and people's financial illiteracy. Thank God for my defined benefit pension. To the Learning Center by the Ses in Howell - may the bird of paradise continue to poop on you and all your descendents for generations.
Phil
4:01 pm on Monday, October 8, 2012
bo bo bagens, is that the 9% they're contractually obligated to put in with no say on where the money goes or how it's invested, just that it's managed by the party in charge's pick, or the additional money, without match, they can put into 403bs?
Local
1:30 pm on Wednesday, October 3, 2012
How does Romney pay 4 $5 Trilion dollar Tax Cut? Voters need Romney Details, Specific, and more details, specifics & how did Romney make millions tax free in Italy?
Jack S
2:17 pm on Wednesday, October 3, 2012
Tonto, why aren't you asking the same question of the Obama administration? Or do you work for the main stream media who doesn't ask the current administration anything?
bo bo bagens
2:48 pm on Wednesday, October 3, 2012
Obama gave us details. The debt is unpatriotic and irresponsible until HE doubled it.
2008 spending - $2.8 T
2012 spending - $3.8 T
Now how can he spend $1 T more a year and we still have such a crappy economy with no jobs. Where the heck did the extra $4 trillion go? That would be a lot of free phones.
Dentss Dunnagun
1:33 pm on Wednesday, October 3, 2012
Maintaining an empire is expensive to the point where it is killing us as a nation and so long as all the candidates for national office are in absolute agreement that we need to maintain the empire nothing will change and we will go bankrupt. Just like the Soviet Union in the 1990s. However, reading these comments its embarrasing how ignorant people are about the cause of the deficits. So when they come to cut your social security, eliminate your tax credits, raise your tax rates, decrease your deductibles, impose a national sales or VAT tax and so on all so they can pay for the defense budget (remeber both republicans and deomcrats are in absolute agreement that we need to maintain the empire at all costs) what are you going to say then? Bloodthirsty and stupid is a dangerous combination but that pretty much describes the population of the United States I'm afraid.
Prentiss Gray
2:50 pm on Wednesday, October 3, 2012
Are we still talking about 401ks?
bo bo bagens
2:50 pm on Wednesday, October 3, 2012
To all of you 401k investors who can follow probably around 55% or so.....
The bond market bubble is about to implode. Sell all your bond funds NOW before its too late. Go to cash or put the money in a stable value fund until the dust settles.
Inflation is coming. THe dollar is falling and the Obama Admin is printing money like no tomorrow. Rates are going to double in next 18 months.
There is your "FREE" advice for the day.
bo bo saggins
4:17 pm on Wednesday, October 3, 2012
So let me get this straight...You expect someone here to take a person with a name derived from the Lord of the Rings/Hobbit trilogy's financial advice? While we are at it, what are your tips on gardening?
Local
2:52 pm on Wednesday, October 3, 2012
2 unpaid for trillion dollar wars & previous tax cuts for the rich, that's the Republican way of balancing the budget.
bo bo bagens
3:00 pm on Wednesday, October 3, 2012
The lying energizer bunny Tonto. Tonto, how can the wars be unpaid for but somehow magically social security and Medicare are. Did the wars cost $1 trillion dollars last year.
In fact, in 2007 the deficit with the wars was $168 B. Today it is $1.3 trillion. Let's see what changed?
Obama spending $1 Trillion more than we did in 2008
Liberals love to lie while people die!!!
BellairBerdan
5:19 pm on Wednesday, October 3, 2012
I'm curious. Why do you use figures from 2007? If you want to cast blame on Obama shouldn't you at least set the bar when he entered office at the end of January 2009?
Phil
4:04 pm on Monday, October 8, 2012
bo bo, because medicare and social security are paid for under they're own payroll tax which shouldn't be touched or changed. Instead it's the same thing happening with pensions, it's a slush fund opportunity for all federal politicians to take and spend how they please. If it isn't touched, it will last as each generation puts money into it.
kemosabe
4:12 pm on Monday, October 8, 2012
Medicare spending is $800 B more a year than the taxes it collects. It is what makes deficits so high. Obama admitted during the debate this.
John Jay
3:15 pm on Wednesday, October 3, 2012
Tonto, please explain millionaire DEMOCRATS are not subjected to your criticism:
Name Min. Net Worth
John Kerry (D-Mass) $181,469,521
Herb Kohl (D-Wis) $88,228,026
Mark Warner (D-Va) $76,372,212
Jay Rockefeller (D-WVa) $61,632,019
Jared Polis (D-Colo) $57,944,127
Richard Blumenthal (D-Conn) $55,119,731
Frank R. Lautenberg (D-NJ) $55,073,211
Dianne Feinstein (D-Calif) $44,386,225
Claire McCaskill (D-Mo) $17,900,212
Nita M. Lowey (D-NY) $15,395,036
Tom Harkin (D-Iowa) $10,276,123
Lloyd Doggett (D-Texas) $8,276,090
Carolyn B. Maloney (D-NY) $7,796,017
Shelley Berkley (D-Nev) $7,236,882
Jeff Bingaman (D-NM) $6,895,272
Ben Nelson (D-Neb) $6,562,096
Nancy Pelosi (D-Calif) $5,946,075
Rosa L. DeLauro (D-Conn) $5,844,020
Ron Wyden (D-Ore) $5,734,033
Michael F. Bennet (D-Colo) $4,986,027
Al Franken (D-Minn) $4,554,050
Jackie Speier (D-Calif) $4,506,072
Kurt Schrader (D-Ore) $3,922,063
Jim Cooper (D-Tenn) $3,712,040
Joe Manchin (D-WVa) $3,697,087
Sheldon Whitehouse (D-RI) $3,475,226
BellairBerdan
3:28 pm on Wednesday, October 3, 2012
Other than showing that there are Democrats that are millionaires, what is the purpose of your list? From what I see most of them are willing to vote to raise taxes on themselves.
bo bo bagens
3:33 pm on Wednesday, October 3, 2012
John Kerry would not pay more in taxes. All his investments are in municipal bonds. He is avoiding paying his fair share albeit legally.
If we raise taxes and collect $100 B a year more - that's all it will do. What is your proposal to cut the other $1.2 trillion a year that makes up the $1.3 trillion deficit. If you will cut $1.2 trillion, I will raise taxes $100B.
USA Today is asking the same question.
•You've repeatedly proposed to raise taxes on those making more than $250,000 a year while leaving the Bush tax cuts in place for everyone else. Soaking the rich might be good politics, but non-partisan tax and budget experts agree it won't come close to producing the revenue the nation needs. That will require far more people to share the burden, including some of the nearly half of Americans who pay no federal income tax. Where do you plan to get the rest of the money? And how will you convince the public that sacrifice is necessary?
Ridgewood Mom
6:18 pm on Wednesday, October 3, 2012
Let's clear a few things up.
1. The federal deficit is the result of a depressed economy, which absolutely predates Obama. Everyone over the age of four has witnessed the causes first hand. It would require a mammoth of delusion to deny this.
2. Any plan for paying the debt will involve taxes because taxes are what pays for things. Cutting taxes, overall, will increase the debt because it will mean less money to pay it.
3. The only sensible means of achieving a more balanced budget is to increase employment. Such will increase the amount of money raised by the government at current tax rates because it will mean, despite more people having more money, that more people will be paying taxes. Only a slightly higher rate of employment would be enough to make the spending deficit go away.
4. It is rationally impossible for the United States to be unable to pay off its debt because the debt is issued in US currency. The only thing that the US owes any other nation is US dollars, and the US issues US dollars. So the only danger inherent in the national debt is inflation. Alarmism over debt numbers is either ignorant or disingenuous.
Tax Playa
9:05 pm on Wednesday, October 3, 2012
@ridgewood Mom- typical Keynsian response to the economy. You operate under the false premise that the govt can improve the economy. It cannot. In 2008 it picked winners and losers by loading up the taxpayer with debt and allowing the banksters to get away with murder. It also bailed out GM and handed the keys to the UAW. If we just let the free market take care of the losers, we would probably be through the worst and on the way to prosperity. (Among other off balance sheet entitlements but don't get me started on these. And pensions which are absolutely ridiculous)
Definition if moral hazard-when you reward people who do the wrong thing.
Read a little Ludwig von Mises- who said "There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises
This is the Fed (who is a private bank) response to deficits. You see, we are on a crash course and history rhymes, the only thing keeping the US afloat is the confidence in our currency. In reality, we are the last horse standing in the glue factory. When the US has a bond auction and noone shows up (except the Fed) it is all over.
@alinsky- Love your moniker as Saul's book is is truly Obama's bible" Rules for Radicals"
Larry O'Doyle
3:25 pm on Wednesday, October 3, 2012
Amen Phil McConkey! People need to assume responsibility for their own financial welfare and hold THEMSELVES accountable. A big part of this involves educating one's self about their options and effectively managing their income based on the fluctuations of today's volatile economic climate. It's all about informed decision making and not playing the victim. If anyone would like to discuss this further, please come visit me anytime at a local soapbox near you.
Tax Playa
9:06 pm on Wednesday, October 3, 2012
Larry- you are spot on!
John Jay
4:16 pm on Wednesday, October 3, 2012
I posted the list of millionaire Democrats because Tonto keeps harping on Romney.
Making money legally is NO CRIME.
The point I am making is that millionaire politicians are probably protected under various "shelters".
That means the average American (me and hopefully) are going to get screwed.
Kevin Nedd
5:06 pm on Wednesday, October 3, 2012
Perhaps had you used a Rollover IRA to go "all in" with Apple a few years ago when it was $208, you wouldnt feel like you were getting screwed.
I'm just sayin...
Ridgewood Mom
6:34 pm on Wednesday, October 3, 2012
John Jay,
To say that "making money legally is no crime" is a tautology. By definition a crime is something that is illegal, so if something is legal it can not be a crime. But this tells us nothing about whether something is right or wrong or whether something should be legal or not.
It is true that many millionaire politicians are democrats, and there should be little doubt that many rich democrats are out there hiding money, unethically, in various off-shore shelters. Furthermore, there should be little doubt that many democrats and republicans are out there doing lots of these sorts of things both legally and illegally. But as it currently stands, Romney is expresses no qualm about these sorts of things. Hehas even openly expressed goals of making it easier for very wealthy people to go on doing precisely such things, and more so. Meaningwhile, Obama has been working very hard in the face of obstructionism to improve upon these sorts of things.
Joanne Smythe
9:49 pm on Wednesday, October 3, 2012
http://www.forbes.com/sites/investor/2012/04/23/five-signs-that-apple-is-a-bubble/
Five Signs That Apple Is A Bubble
A bubble is a bubble. People can see them clearly in retrospect but seem unable to see them before they implode. Apple's stock price is a bubble.
People who ride bubbles up do so successfully because nothing can shake their irrational belief that the instrument in question will rise infinitely. The ability to hang on regardless is their key to riches and the seed of their financial destruction.
Investment bubbles prove their devotees right as they grow; the impossible rise rewards them incredibly. Why would you suddenly change your mind when the results thus far have been so fabulously great?
I've been writing an Apple Stock Watch column for Mac Format and Mac Tribe for years now and was an Apple bull from nowhere to around $200 a share. Since $200 a share I've flipped between skeptical and bearish.
Initially skepticism was based on Apple's ability to keep the mega-hits coming, which it has. Recently the bearishness comes from the simply gravity of Apple being the most valuable company in the U.S. on the back of fashionable silver gadgets.
As far as I can see Apple is valued by a logic all of its own, where the upsides are valued to the max and the downsides are written off – this is classic bubble thinking.
Kevin Nedd
12:53 pm on Sunday, October 7, 2012
Apple's PE is less than 16. Unlike many Internet stocks, Apple earns money.
alinsky
7:35 pm on Wednesday, October 3, 2012
Ridgewood Mom - the deficit and debt explosion ARE NOT a result of the depressed economy. The depressed economy plays a part for sure but spending has grown since the economy tanked. The mainstream press has mislead everyone on this. It's their contribution to rules for radicals.
For sure higher taxes will need to be part of the dialogue but that only goes so far. The Democrats want to demogogue taxes and the rich so you will forget that CUTS also need to be made and people will not like this.
The reason the deficit (the annual problem) is growing is spending exceeds revenue whether it be SS, Medicare, etc. This deficit is then added to the debt (sum of all deficits). There was never a time when more and more debt and less and less revenue produced a good outcome.
The remainder of your comments show a clear lack of understanding of basic finances. If the debt grows, the cost to pay the debt grows. In essence we are borrowing money just to pay the interest NOT principal on the borrowed money. If the country is borrowing money to pay interest, that is money it cannot spend elsewhere on things like roads and bridges which only Democrats talk about during elections.....another rules for radical emotional pitch.
http://www.vcn.bc.ca/citizens-handbook/rules.html
Ridgewood Mom
8:16 pm on Wednesday, October 3, 2012
alinsky,
I am sorry if my comments make me appear to to "show a clear lack of understanding of basic finances. I do have some experience in the area.
I am not advocating that the US do so, but all the US has to do to pay back the US dollars that it owes is print more US dollars. Yes, that would devalue US currency, but it is not logical to think that the US somehow would be unable to do that. Do you understand that?
Less unemployment will easily create a balanced budget and a even a surplus in relation to current spending. Do you doubt this? Should I provide data?
Based on your stated expertise in finance, I'm sure you are aware that most money is made off of borrowed money. It makes no sense to think that anything can be done to effect unemployment without the involvement of government.
You stated that "cuts also need to be made." I understand this to be a moral statement. Did you intend it that way? If so, I disagree. But then we are not having a discussion about the economy.
Regarding your point about radicalism, I understand the term radical to reference a desire to change a pre-existing thing. To advocate changes to existing spending on programs that benefit Americans would make sense as radicalism. To conserve them would make sense to be a conservative position.
alinsky
8:33 pm on Wednesday, October 3, 2012
Oh really. Please do tell. The US dollar is already being devalued by all of the Fed Reserve printing of it and all of the QE they are doing to pretend low rates help middle America. $3-5 trillion in new money has been created out of thin air already.
Low unemployment is the goal. HOW is the question. 70% of GDP is consumer driven. We buy Apple products and goods from China and food, perishables. What is your plan to create jobs?
At full economic employment which we had under Bush, tax revenues in 2007 were the highest ever. There is no scenario where unemployment and tax revenues come even close to balancing the spending in the Federal Budget. Should I provide the data?
The government is not borrowing money to invest, they borrow to pay payroll and day to day things. That doesn't work!!
As for cuts, yep, they need to be made. We cannot spend what we don't have or what is not supported by the funding mechanisms in place. Very basic. You can raise taxes all you want. That will not create jobs and it will not balance the budget.
Your solution to stopping the debt train wreck??
Billy Mays
12:40 am on Thursday, October 4, 2012
Ridgewood Mom, Why don;t you stay pregnant and barefoot in the kitchen like a good and decent soccer Mom?
August West
2:02 pm on Thursday, October 4, 2012
you conveniently left out one significant detail in the equation- the interest rate on the debt is at all time lows. While clearly both spending cuts and tax increases will be required, the cost of borrowing relative to previous periods has declined.
Ridgewood Mom
8:28 pm on Wednesday, October 3, 2012
For the record, I think that David G. Dietze gives good advice in this article. :)
Billy Mays
12:41 am on Thursday, October 4, 2012
The Record is not very good at business reporting, The Wall Street Journal is so much better.
alinsky
8:42 pm on Wednesday, October 3, 2012
Ridgewood Mom - please show us how we eliminate the annual budget deficit of $1.3 trillion.
2012 revenues = $2.5 Trillion and 2012 expenses = $3.8 T for a negative $1.3 T
Personal Income tax revenue = $1.2 T
Are you saying that another $1.2 T can be had annually from income taxes - a 100% INCREASE?
BTW this magical growth must also assume spending stays constant or goes down to balance yet Obama's budget projects spending of $4.5 T in 2017 another $800 B increase in 5 short years.
That means by 2017 to balance the budget, we need to double all federal revenues. Now I defy you to prove it.
Local
1:42 pm on Monday, October 8, 2012
The heck with 401k's which were only designed to supplement a Real Pension, workers should band together and start demanding a Return of the traditional defined pension plan where you receive a guaranteed payout over the life of your retirement.
If CEO's can now receive 378 times the salary of regular workers then it's about time the middle class gets some of its PIE BACK !!!
kemosabe
2:59 pm on Monday, October 8, 2012
Pensions are criminal! Taxpayers should not have to pay for the retirement of others. Pay for it your self. Stop looking for handouts Tonto!!!
Jobs or pensions???? PICK!!!!
Toms River taxpayers already pay enough!!! See page 39. Our budget pays 10 percent for pensions now!!! That is not money improving our roads, parks or anything.
http://www.tomsrivertownship.com/downloads/Mark-Budget-2012.pdf
No pension system is healthy and taxpayers have had enough. Even Democrats know it to be true even in Democrat states like CA and ILL
http://www.illinoisisbroke.com/
http://www.pensiontsunami.com/
http://m.apnews.com/ap/db_289563/contentdetail.htm?contentguid=KW2o7HEw
Gunny
3:17 pm on Monday, October 8, 2012
Kemosabe,
Again, as I said before. Whose money would our politicians play with if there wasn't a pension system? fact: it was over funded until they started raiding it.
kemosabe
3:20 pm on Monday, October 8, 2012
Gunny you make em no sense. The government doesn't play with the pension money. It's actually invested unlike the Social Security fund's fake Algore lock box
Where you have proof it was raided? Show me the checks that were cut.
Gunny
3:59 pm on Monday, October 8, 2012
Do your own research coach.
kemosabe
4:10 pm on Monday, October 8, 2012
How typical....I have.
Towns and school districts pay $2 BILLION a year towards pensions. State pays another $1.3 B this year. That's $3.3 B of money taxpayers pay for and get ZERO BENEFIT FROM!!!!! How does a pension improve roads or make children smarter? Taxpayers getting shafted
kemosabe
3:40 pm on Monday, October 8, 2012
Gunny how about STate give less state aid to West Orange and put into pensions instead? That would be about $5 million for town and another $6 million for schools. Which you want? Pensions or pay for services and staff?
http://nj-westorange.civicplus.com/DocumentCenter/Home/View/215
West Orange spending is 70 million. Pensions cost 6.6 million. plus healthcare costs of 9.7 million so 16.3 million goes for benefits.
jerseyswamps
3:52 pm on Monday, October 8, 2012
kemosabe, what was it you Indian folks used to call the President of the U.S.?
Gunny
3:53 pm on Monday, October 8, 2012
Kemosabe,
There's really a very simple solution that no body wants to address. People like yourself, just like to spew venom and anger over taxes and your own career choices.
But to answer the question, it's quite simple. People pay a little more into the pension system. The percentage rate was raised last year and should be raised again in another 5. BUT, the state needs to stop raiding it whenever they feel the need. And second, employees need to contribute a little more for health benefits. Lastly, and this is a topic I've spoken about for years. MERGE. There's no reason for all of these municipalities to have their own little kingdoms. It's either merge or be lost.
kemosabe
4:02 pm on Monday, October 8, 2012
Gunny people like you like to lie. No one raided anything. That's a cheesy word people use to inflame debate. The state only has so much to doll out to schools and towns mostly failing urban cetners and cannot put it into pensions on top of the high tax burden we all face.. The pensions are criminial. They steal from taxpayers to pay benefits for a few...this kills middle class taxpayers! I don't want to pay income, sales, property taxes for you or anyone else's pension. I want to save for my own retirement and for my kids. NJ is spending $3 B in 2012 on pensions. That's money taxpayers could use to pay bills. Where are your priorities? Pensions for a few or tax relief for the many? Merging towns is a very good idea I will grant you that.
I am Spartacus
4:07 pm on Monday, October 8, 2012
The simple solution is to axe the defined benefit plan & go to a defined contribution plan. Workers can opt to either get the money invested in an annuity or self manage their investments if they feel comfortable w/ the responsibility.
kemosabe
4:11 pm on Monday, October 8, 2012
Employees will get pay raises if they no longer have to contribute to pensions too! I bet they like more cash in pocket for gas and groceries
Local
4:12 pm on Monday, October 8, 2012
Romney just rec'd 1 Million $$$$ from a Foreign Co, an Insurance Giant of Canada. Supreme Court made that legal !!!!!!!!!
kemosabe
4:15 pm on Monday, October 8, 2012
Obama just got $1 million from Al Qeda to thank him for not securing Libya
Tax Playa
4:33 pm on Monday, October 8, 2012
@ Gunny- Kemosabe is correct. Pensions should be eliminated. They are mathematically impossible to fund. Rhode Island is taking the first step to make at least new employees go on a 401-k and freezing benefits.
Many states will follow. New Jersey has to do this or it will be insolvent in the near future. Or we will have to raise taxes beyond your imagination.
The whole system is completely unsustainable.
Read this report by PEW for information. http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Retirement_security/Widening%20Gap%20Brief%20Update_webREV.pdf
The problem is that our politicians are a bunch of wusses (who get pensions) and dont have the backbone to stand up to this theivery.
Just think about this. New Jersey unemployment rate is about 10%, why do we have to give that person a pension and health benefits to take a job in the public sector. I think that person will take any job right now...
kemosabe
4:35 pm on Monday, October 8, 2012
Pensions. More debt. More tax burden on our children.
Add this to Obama's $16 Trillion growing to $25 trillion national debt.
Our children are bankrupt before they even have a chance.
http://www.nationalreview.com/corner/315197/states-real-debt-burden-4-trillion-veronique-de-rugy
Local
4:51 pm on Monday, October 8, 2012
A 1 Trillion dollar deficit is what Bush left Obama the 1st day Obama stepped into the office PLUS 2 unpaid for WARS & a Tax Cut for the Wealthy UNPAID FOR. Bush also left an Economy in Near Collapse not a Recession but very close to a Complete Economic Collapse where 20% unemployment was highly likely if not more. How soon we all forget!
kemosabe
5:05 pm on Monday, October 8, 2012
When losing an argument like claiming PENSIONS for UNIONS are GOOD at the expense of the taxpayers, liberals revert to Blame BUSH strategy. Explain it to us Tonto how does one cut something that is then unpaid for? Maybe the govment shouldn't be spending more than it takes in. Why do they spend $800 B on Medicare more than they take in. Isn't spending more than you have UNPAID? Did Bush make that happen? 4 years of Obama in office and 4 $1 trillion plus deficiits. Now, I seem to recall he promised to cut that in half. Are you admitting he failied?
Pensions are UNPAID for too by your definitions. What is your answer to paying for them? Raise taxes on the overburdened NJ Middle Class for a handful of government workers. Come on, we thought you cared about the middle class. How many NJ middle class are government employees?
IMHO
4:42 pm on Monday, October 8, 2012
I didn't go to MIT but it seems that the pension math just doesn't work. I hear people on here complain that if only the pensions were funded properly the money would be there so please explain this to me. If a local employee who starts at around 30k but retires at 125k with a 75% pension (94k a year) How much would they need to put away to get that kind of guaranteed return for life? The answer is about 2,000,000. so how does this pension math work? even if 20% of income was going into pension it would fall way short.
tryintosurvive
4:54 pm on Monday, October 8, 2012
It only works if someone else is paying, which for the public sector is the taxpayers. If the employee needs to fund it themselves it is impossible.
Unfortunately, the gimmick is that the politicians promise to continue the pensions and gold plated benefits to get elected. All public sector employees and retirees vote as a block to keep the gravy train going. Even if they have to pay high taxes themselves (due to these pensions and benefits), they get most of the money back in their own benefits.
Until there are enough people in the private sector who would not vote for the politians who sustain this continuous cycle, it will not end.
Complaining that the pensions should have been "funded" is a joke. The politicians gave away unaffordable pensons and then we are shocked that there is not enough money for the state to put into them to fund them. Duh.
Tax Playa
5:04 pm on Monday, October 8, 2012
AMEN!!!!!
Monk
5:00 pm on Monday, October 8, 2012
People should be more self-reliant. It fosters personal responsibility, personal industry, personal innovation and personal efficiency. The one with "skin in the game" is the one who will better budget and conserve resources. Pensions/allowances are for socialists and those who lack the capacity to care for themselves. There is so much misunderstanding and hypocrisy when it comes to wealth and resource management. The idea that government is the best custodian of wealth and resources is a pipe dream.
kemosabe
5:12 pm on Monday, October 8, 2012
http://newjersey.watchdog.org/2012/04/02/100k-club/
Taxpayers paying for $100k pensions. Is $100k in pension income considered Middle Class? How much do you have to save to get GUARANTEED $100k a year from the taxpayers?
Jack B Goode
9:13 pm on Monday, October 8, 2012
"you didn't build that"
Mr President , I 've been in business for 25 years, and I don't know what you're talking about"
Jack B Goode
9:14 pm on Monday, October 8, 2012
http://www.google.com/url?sa=t&rct=j&q=obama%20deficit%20increase&source=web&cd=1&cad=rja&ved=0CC4QFjAA&url=http%3A%2F%2Fwww.cbsnews.com%2F8301-503544_162-57400369-503544%2Fnational-debt-has-increased-more-under-obama-than-under-bush%2F&ei=W3pzUODuJo2o0AHhtoEQ&usg=AFQjCNGpxtfM93w5O06bWr9BbNOZQIGD_w
Obama has increased the national debt more in 4 years than Bush had in 8 Years
Thats the fact Jack!
national-debt-has-increased-more-under-obama-than-under-bush
Jo
10:14 pm on Monday, October 8, 2012
He meant you didn't build the roads that you used to get to your company or used to move your goods to market, the roads your customers drove in on. the public waste and sewer system that made sure your business didn't smell like poop. You built that, with your enighbors, through taxes. I like that my town doesn't smell like poop, I like that a mountain stream doesn't rage through my foundation becaus of storm drains, I like that I have paved roads, I enjoy flushing the toilet in a state with 9 million butts and being able to trun on the faucet right after knowing the public water supply is one of the safest in the world. The police, fire, national guard that kept your proerty safe from fire and mirauding bands. My husband owns a small business. He didn't take a loan beyond a loan on his truck, borrow money from anyone, govt or parent, and he did build the base of that company himself, but he knows, as do I, that he wouldn't have gotten very far without help from police keeping job sites safe, DPWs plowing roads so that in the 15 years he's been in business pretty well as soon as the snow finally stopped, he could get out and get to customers all over northern NJ. That's what I heard in the "you didn't build that" speech. But I listened to it in it's entirety, not just right before that clip. It's very clearly explained later on and nothing similar to what was prtrayed. Not that that's anything new. Zealots on both sides do that all the time.
Gunny
12:31 pm on Tuesday, October 9, 2012
I think someone needs to move out of his mother in laws house soon. Coach is that third floor getting to you yet?