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Antiwork 2: No One Is Getting A Pay Raise

Scarlet said:
But this discussion has led to another question that I will need to be answered. Mostly - does my company's contribution contribute to my yearly cap? If it does, then the additional money they will contribute instead of putting in my pension will cause me to hit that max much sooner, right? Or is it just what I contribute? Need to get that answered ASAP.
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NO. Absolutely not. Your personal contribution is all that matters for the limit. Like I said in one of my responses, I make sure the company continues their contribution long after I hit my maximum. It's never a problem.

The reasons for a limit is the govenment doesn't want a 401K (or IRA or Roth IRA) to be a tax haven for ultra rich people. So, they limit it, otherwise, ultra rich people will contribute millions into a 401K. If the company wants to give you money, it's not really a means for ultra rich people to hide money. Also, if you make too much, your contribution limit (or ability to contribute at all to certain funds) is also curtailed.
 
Russell Jaslow said:
NO. Absolutely not. Your personal contribution is all that matters for the limit. Like I said in one of my responses, I make sure the company continues their contribution long after I hit my maximum. It's never a problem.

The reasons for a limit is the govenment doesn't want a 401K (or IRA or Roth IRA) to be a tax haven for ultra rich people. So, they limit it, otherwise, ultra rich people will contribute millions into a 401K. If the company wants to give you money, it's not really a means for ultra rich people to hide money. Also, if you make too much, your contribution limit (or ability to contribute at all to certain funds) is also curtailed.
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OK thanks. I was hoping that was the case. I’m still going to call to confirm though.
 
Ugh. I don’t so much mind getting 3% raises, but I hate giving them!

It’s “compensation planning” time for managers. We get 3% of the total of our employees’ salaries to dole out, so to give anyone more than 3%, you have to take it from someone else. Makes me sick to my stomach not to be able to reward my high performers without putting someone else on the rack.
 
FadeToBlack&Gold said:
I'll be 39 next month. Despite graduating into the 2009 economy, I have banked the maximum 401k every year since getting my first corporate job and rolled it over into an IRA whenever I've changed jobs.

I keep hearing that the average Millennial has saved about $60k and I just don't see how most of my generation is ever going to retire. Comparatively, I'm doing quite well within my age bracket, and I still worry about saving enough when I think about inflation and long-term healthcare/eldercare costs.
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Yeah, I’m nowhere near max out 401k level but even I’m in the how do they have only $60k??? I’m honestly looking at the number, 8% annual returns pre retirement, 3% post, holding SS until as late as I can, and I’m still set to almost have enough money for my kids to retire upon my death.

The only reason I would continue working is to ensure the kids have healthcare until they graduate.
 
LynahFan said:
Ugh. I don’t so much mind getting 3% raises, but I hate giving them!

It’s “compensation planning” time for managers. We get 3% of the total of our employees’ salaries to dole out, so to give anyone more than 3%, you have to take it from someone else. Makes me sick to my stomach not to be able to reward my high performers without putting someone else on the rack.
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Wait, there’s such a thing as a more than 3% COLA raise?
 
FadeToBlack&Gold said:
I haven't hired a financial advisor/planner yet because I manage investments pretty well on my own, but I have long felt that turning 40 is a good point to seek some professional advice, so I will likely do so in the near future.
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I don’t think I will. There’s nothing you need beyond the three or four-fund portfolio where you take 100 minus your age to determine what % in stocks.

If you want to squeeze those last few ounces out of the market, sure, you can play around with cash, REITs, and commodity funds, but it’s wholly unnecessary for the vast vast vast majority of people in our situation.

The only things that really change are:
Do you have life insurance to cover your debts?
Do you have kids and need additional LI?
Do you have a will and advanced directive?

All of the above are easily self directed.

The only place it gets more complicated is if you have kids and want to figure out trusts, etc.
 
Russell Jaslow said:
NO. Absolutely not. Your personal contribution is all that matters for the limit. Like I said in one of my responses, I make sure the company continues their contribution long after I hit my maximum. It's never a problem.

The reasons for a limit is the govenment doesn't want a 401K (or IRA or Roth IRA) to be a tax haven for ultra rich people. So, they limit it, otherwise, ultra rich people will contribute millions into a 401K. If the company wants to give you money, it's not really a means for ultra rich people to hide money. Also, if you make too much, your contribution limit (or ability to contribute at all to certain funds) is also curtailed.
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Yeah, your company automatically prevents you from over contributing. Or rather, they really should. Ours does.
 
dxmnkd316 said:
Yeah, I’m nowhere near max out 401k level but even I’m in the how do they have only $60k???
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Student debt is a killer for many. Also, the majority of Americans lack a solid, basic financial education and make poor economic choices.

But frankly, I think even many college-educated Millennials and Zoomers see retirement as a pipe dream. So they spend their money now.
 
dxmnkd316 said:
Yeah, I’m nowhere near max out 401k level but even I’m in the how do they have only $60k??? I’m honestly looking at the number, 8% annual returns pre retirement, 3% post, holding SS until as late as I can, and I’m still set to almost have enough money for my kids to retire upon my death.

The only reason I would continue working is to ensure the kids have healthcare until they graduate.
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To add to what Fade said- I also think there are a LOT of Americans who don't even have access to a 401k, which brings down the number a lot. And many of those jobs are low paying so it's hard to save for just a 12 month future, let alone the concept of retiring.
 
LynahFan said:
It’s “compensation planning” time for managers. We get 3% of the total of our employees’ salaries to dole out, so to give anyone more than 3%, you have to take it from someone else. Makes me sick to my stomach not to be able to reward my high performers without putting someone else on the rack.
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I definitely do NOT miss this part of my management career.
 
MichVandal said:
To add to what Fade said- I also think there are a LOT of Americans who don't even have access to a 401k, which brings down the number a lot. And many of those jobs are low paying so it's hard to save for just a 12 month future, let alone the concept of retiring.
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I get that but also our local trash service offers a 401k

I’m not saying I’m not fortunate. I am. I’m also not saying I think they’re offered everywhere. I know they’re not.

But I’m talking about so many millennial and gen X folks I know that AREN’T funding their 401ks today for those that do have them. They chase the fast bucks with bitcoin and Robinhood and shit. Like, just put in what you can, at least 10% but really try for 15-20%. Put it in a target fund and don’t look at it for five years.
 
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Kinda hard to save for retirement when you need to put every penny towards living in the current and cover basic needs... That $150-200/paycheck is needed elsewhere and can't be thrown into an account to not be seen for 30 years. To successfully plan for retirement you need to be earning $50k/year ($24/hour) minimum, give or take.

For many that isn't happening, even before you take in people being uneducated in finances and not having a picture of the long game.
 
Yes, many of us here are insulated from the reality that somewhere around half the country lives hand-to-mouth because they have to. 10 years ago, I lived fairly well as a bachelor on 50 grand a year. I had money to bank for retirement and money for 1-2 modest vacations a year.

Today, I would be pinching. Now, imagine supporting a wife and kid on that. I can't.
 
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