With no raise in at least 5 years .. would you turn down a bonus?

12 years ago

Who, pray ... would turn down free money??

Many workers in these parts have not enjoyed a pay raise in several years.

Actually, they've had a cut in lifestyle, for the prices keep going up, meaning that the same number of dollars don't go as far as they used to.

But ...

... many have a standing offer from their employers of extra income, that many make less than full use of, with quite a number not making any use of it at all.

Quite a few employers offer that if their employees make a contribution to their retirement plan, for every $2.00 that the employee contributes, the employer will contribute $1.00, or something comparable, up to a specified percentage of the employee's wage received, sometimes in the neighbourhood of 6%.

Thus, an employee earning $30,000. who deposits $1,800., would get a $900. extra income from the employer, tied though it might be.

"Can't afford it" ...

... may have a different odour when one reaches retirement age, lacking adequate income.

And, these days, changed from earlier decades, a person may work, 25 - 60, for 35 years ...

... and be retired from 60 - 95 - another 35 years.

Or more: the largest increase in the population of certain age ranges in our area in recent years has been in to 100+ category.

I prefer to run out of days before I run out of dollars: how about you?

Just some ideas that some may find interesting.

ole joyfuelled

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Comments (12)

socks
12 years ago
These are the people thinking that they will be able to survive on SS when they retire!!

The company-sponsored contribution to retirement plans is a huge gift, and anyone with the opportunity should participate. Workers have "time" on their sides.
glenda_al
12 years ago
Thank goodness I have a great teacher retirement system plus social security.
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azzalea
12 years ago
Are we talking about a retirement fund? I can certainly understand the employee's stance. Personally, I don't trust those accounts. The government has discussed many times in the past decade 'invading' them--some of the proposals have been: Anyone with private retirement savings would have to use that up BEFORE being able to collect SS. Recently, the government has proposed nationalizing them (meaning the gov't would control them--it's happened in other countries). No, those things haven't happened yet, but with Social Security in the shape it is, I think it's just a matter of time. And we all know what's happened to them because of the economy.

Now, to be honest? I do have a SEP account (like an IRA for self-employed). But the ONLY reason I have it is because one year, I had a choice--pay $4200 in taxes to the goverment, OR put that $4200 into a retirement account. It was a no-brainer. But I consider it 'play' (or gambling, if you will) money. I would NEVER EVER put ANY money I planned to depend upon during my retirement years in the hands of someone else to manage. And quite frankly, the very reputable fund I have my account with hasn't done that well--7 years later, it's worth a few hundred more than when I put it in, but I've done a WHOLE lot better with the money I've banked.

Look, if the company cannot make enough, cannot care enough about their employees to give them a raise in the past 7 years? Then who in their right mind would hand over their hard-earned money and let that same company manage it for them? Family personal economics aside, I just wouldn't be comfortable allowing that company to have control over my money.

Interestingly, we've always shied away from all the 'you won't be able to retire unless you buy this product or that' investment counselling. And know what? Controlling our own money, we're in far far better shape than most people we know--many who make far more than we do, but who have let others stick their hands in their pockets.
susan_on
12 years ago
Some of the employees who opted into those plans lost their money when the plants closed down. I think that happened at Atlas Steels here in our area.
joyfulguy
Original Author
12 years ago
The ones who have been hurting are mostly the ones whose company had a "defined benefit" plan, that "guaranteed" them a certain income after retirement, and a number of companies hadn't adequately fed the fund over the years ... plus, several, as they neared bankruptcy, raided the fund ... but they'd all managed them.

It seems to me that most of the "defined contribution" plans, the kind to which I referred, are managed by a third party, so that what the company pays in is gone from their pocket.

ole joyful
sleeperblues
12 years ago
I have been saving for retirement with my first paycheck out of college. My first IRA comes due in 2 years. Of course I'll roll it over. I cannot imagine not saving for when I'm not working. And I do participate in my company's match.
maire_cate
12 years ago
Yep = because most of the women who work in my DH's office turn it down.

They have the option of matching funds contributed to their IRA. I think it's up to 6%. Yet most of them don't get that benefit because they don't bother to put their share into the account.

At first I thought it was because they felt they didn't make enough to contribute to an IRA. But after I spent some time in the office I noticed that these same individuals went out to lunch 3 out of 5 days, they had frequent manicures and hair appointments, they went on vacations and weekend trips, they went out to dinner etc.

In short they were spending a good portion of their pay on non-essentials. Then I thought that perhaps their spouses had great pensions or retirement plants or made enough money that they could just spend what they made on things that they enjoyed. However as I got to know them it became all too obvious that this wasn't the case.

Unfortunately it came as a shock to me when I learned their personal circumstances - many were single (divorced, unmarried, widowed), some were helping to raise their grandchildren, many had husbands who worked but only a few made really good wages.

What I realized was that many of these people just didn't worry about the future. They felt that they earned it and they could spend it. They seldom had discussions about saving or retirement plans. It was disheartening.
Chi
12 years ago
I didn't contribute my first two years out of college but I chalk that up to being ignorant about it and feeling invincible at 22. However, I've been diligent since then so I've been contributing about 6 years now. I put in 10% of my paycheck which is more than the company matches but I want to put away as much as I can. I figure not putting at least the amount the company matches is just throwing away free money. While I'm sure there are plenty of ways I could get a better return, the fact of the matter is that I know I won't do the legwork required for it and I don't have enough assets to warrant hiring a professional.
bengardening
12 years ago
I used to work for a company that did this and like one of my coworkers said if you put it in there you wont miss it because you never saw it in the first place. On your check that is and it was true. I put in the maximum amount possible. We got raises though too.
Lindsey_CA
12 years ago
Hubs and I both work for the State of California. The state has a retirement plan -- we put in a percentage of our wages, and the state puts in a lesser percentage. We used to have to put in 5%, but with our latest contract, it went up to 6%, and the state's contribution went down. For nearly two years we had three mandatory unpaid furlough days; and now we have one day that we work but we don't get paid for it. That will end in November - yay!
susanjf_gw
12 years ago
we have and do...right now our money guy has us set at about 3 grand a month, ss, 401, and now a met life plan...but dh will have to work till he's 67 or...and he hates that...not much choice...

working on mortgage pay off, too...told ds1 how much we had left and it was less than what his new car cost! we make 13 payments and i add to the principle whenever i can...
azzalea
12 years ago
I truly hope those of you who are counting on others to manage your retirement funds do better than my Dsis.

She worked for a company (a multi-state chain of home centers)--it was her first job at age 17. She was the first woman to work her way up into regional management. She was a salaried, respected employee who had a lot of responsibility. In her 40's, a larger company bought the chain because they wanted a tax write-off. Within a year, they'd bankrupted a very successful chain, the employees lost their jobs, and more importantly--their retirements! Sis got a one-time pay-out of $16,000! Now, she's working as a mail carrier, is approaching 60, and cannot see that she'll be able to retire anytime soon (the post office pensions aren't that great, but it was the only job she was able to get). Sad to think of a 60, 62, 65 year old woman walking the streets to deliver mail day after day, when she should have been able to retire very comfortably.

You really never know what someone else will do with YOUR money.

With no raise in at least 5 years .. would you turn down a bonus?

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socks

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With no raise in at least 5 years .. would you turn down a bonus?

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