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View Diary: $6.6 Trillion Retirement Savings Deficit Shows 401(k)'s No Replacement for Pensions (47 comments)

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  •  401(k)s ARE good however (2+ / 0-)
    Recommended by:
    Odysseus, akeitz

    for avoiding the common problem with regular pension benefits, of companies going bankrupt for the specific purpose of evading their pension obligations.  Since I graduated college in the 1980's with the first wave of these pension defaults, I have been all too aware that a defined benefit pension is only as secure as the company which offers it -- NOT.

    A 401(k) invariably ends up with less in the kitty, but you CAN take it with you.  In fact, given the shennanigans I've seen as a legal secretary working with corporate deadbeats, I've felt most comfortable deliberately leaving employers when I felt insecure about their futures, rolling the 401(k) which they controlled into my own IRA, and thus making damned sure that it stayed in my hands and not theirs.  Think Enron.

    A real defined benefit pension is a lovely thing.  But like all lovely things in a harsh economic world, they are subject to destruction by ravaging capitalist hordes.  Only a state/federal pension can be trusted to survive, and even that could be unilaterally "modified" at the whim of a Republican administration at any time.  

    Furthermore, you CAN'T tap into them early in a crisis, which you can with an IRA.  Perhaps we should see the numbers of people who have done just that as another measure of the extreme burden which the Great Recession has placed on households and individuals.  Most of us are only treading water because we had lots of life-preservers ready just-in-case.  Our much-worshiped Glorious System Of Capitalism ran this Titanic straight onto the rocks, and half the ship has gone down.  You're really arguing here that we should have more comfortable, well-stocked lifeboats (which could easily have been trapped on deck and gone down with the ship) instead of the small, uncomfortable but flexible life-rings and inflatables that are keeping us alive.

    •  as long as you keep in mind (4+ / 0-)

      That instead we could have legally protected pension funds from raiding.  We could have protected them from the bankruptcy court and other scams.  We could have required prudent investment.  We could have worked out a way to make pensions partly portable.

      We did not, in order to facilitate the corporate world's ability to defraud workers of hard earned income.  We did not,  order to provide congress people with a good source of bribes.

      The 401k schemes help you through many of the problems you would not have had if you had a well-established pension.

      The financial industry sucked up the value of the 401k' s repeatedly.  One of my neighbors, now in his 70's has had to defer retirement because of the losses in 2000? & 2007.  The financial industry collected their fees anyway..

      •  Who is WE? (0+ / 0-)

        Since it's obvious that we the people have no control over these parasites and "our" duly elected representatives actually serve the financier class, we have to do for ourselves what we can.  Sure, we could live in a more perfect union, but the chances of that have been deteriorating throughout my lifetime.

        •  good point (0+ / 0-)

          I believed I was reacting to the previous commentator' s boosting of 401k.  I think the 401k was deliberately conceived to undermine defined pensions, to fleece the workers of the country.  There is/was a fair amount of paranoia in my thinking, but that does not make it incorrect.

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