[lbo-talk] Pensions vs 401(k)

[John S Costello]

On Dec 20, 2007 12:05 PM, Dennis Claxton <ddclaxton at earthlink.net> wrote:
> That's part of what I mean.  The idea that a 401K is better than a
> traditional pension plan was easier to sell because the stock market
> in general was hyped as the way to solve all your financial
> problems.  It's toned down a little now I guess, but I remember a lot
> of commercials from the '90s that peddled the idea that the market
> could make anyone, if not rich, at least a lot better off.

Sometimes I wonder whether or not 401(k)-type plans won't turn out
better for people whose pension funds get squandered and then
bankrupted by their corporate masters.  I'm thinking of United
Airlines, to take an egregious example.

My parents went in to talk to a retirement planner and between the two
of them they have five defined-benefit income streams(military
pension, 2 x State of MN pension, 2 x Social Security) and a 403(b)
account.  The guy said he almost never sees people with that much
guaranteed income going into retirement.  BUT -- all of it is backed
by state actors.  If they'd spent years in industry, who knows how
much those pensions would be worth now.

-- 
"The more I practice, the luckier I get." -- Ben Hogan