Do you start saving for your Retirement???

[misbee]

It's quite common among US companies to offer retirement packages (e.g. 401k) to their employees. For those who are US based, do you contribute to your 401K? How many %? (you can skip this question if you want) When did you start? When do you plan to retire?

For those are based in Pinas, what retirement options are offered to you? Do you contribute?

I know for most of us here, retirement is still a long way ahead of us but I am just curious if you guys/gals are saving for your future. ;)

[deng2001]

yeah...we have 403b at texas children's hospital. i contribute $150.00 per paycheck and the hospital gives 50% of what i give.
i just started 2 years ago. if i have enough money in my retirement account i'd probably quit working. but that's still a looong way to go...

[KuyaDanny]

The SSS provides a (woefully inadequate) pension plan for private sector employees, and there is also a pension scheme for military personnel. Those who work in government may want to help me on this one. I do not know what they get.

Some private companies supplement the SSS pension with a retirement program of their own, but typically they pay everything out in one go upon retirement.

I think the conclusion you will make if you talk to enough retirees is that pensions here are not enough to sustain people after retirement. So retirees generally must rely on additional income, other family members, or savings accumulated during their working years.

[Agimat]

we have a 401k plan in our company. we contribute a percentage (max of 15%) of our earnings and the company matches the amount we contribute.

In the Philippines, most of the companies offer non-contributory retirement plans. the company usually contributes a percentage of the employees salary. the basic retirement package is :

final monthly salary times the no of years of service * 150%

[tazbivr]

Much as it is a good business and tax decision to put money in a 401 k for me here in the states I chose instead to use my money in a business in the philippines which I am praying to be my main income soon. Nonetheless I have started since last year to set aside 5000.00Php in a bank every months as my retirement plan. By the way my retirement age as I project it is age 45.Kapal muks but at least I'm working on it:D :) :D

[stnickmt]

My company doesn't offer 401k (I work for the Department of Defense by the way). So my husband and I decided to go through a private investment company and started investing to mutual funds and Roth IRAs. We are investing about $400/mo because I just can't imagine myself working past 55. It's all good though, when I get my monthly statements and go through tbem, it makes me feel proud and secure about my future. By the way, I suggest for all you young people out there to start saving for your future. I started investing when I was 21.

[kamehameha]

I agree with stnickmt. Start saving for retirement as early as possible.

I do contribute to 401K but I supplement it with a contribution to a Roth IRA because of the limited choices of funds from my company's 401K plan. I read a lot of articles that recommend maxing out 401K contribution (15% of your gross annual salary or 10,500 whichever is less) so that's what I'm doing. There a lot of benefits contributing to a 401K plan. You may want to refer to the following sites for more information on retirement planning.

www.cnnfn.com/retirement

www.money.com

http://majestic.vanguard.com/RRC/DA

[tagaabucay]

not sure if tutuo pa rin ito pero some yrs back :rolleyes:
the common practice for pvt companies ay to have their own retirement plan... most common of this ay a lump sum benefit in time of retirement (some really huge companies, offers their own pension plan).

there are two types of these retirement plans... :o
a defined benefit plan - where you get your benefit in term of length of stay in the company and a multiple of your mthly salary... ex. 1.25 x montly salary at retirement x yrs of svc with the company.

a defined contribution plan - where you literally saves, via mnthly payroll deduction, for your retirement. your savings is matched, to a certain percentage, by your company. your savings+the company's matching contribution + interest is what you get upon retirement. There usually is a percentage of the company's contribution you get depending on the vesting schedule.... ex 6% of your salary + 3% (matches 50% of ee contrib) from the company + interest (usually more than savings acct rate) x vesting schedule (ei you get 50% of employer contrib after 5yrs of svc, 60% after 6 yrs,... 100% after 10yrs or more).
;)

[lupuS]

I think the value of employer-funded retirement plans must be reexamined in the light of two very real present day phenomena: a) frequent job switching, and b) layoffs, retrenchment, and downsizing.

When an employee leaves a company for any of these reasons, his interests in an employer-funded retirement program are forfeited in favor of the company. In other words, he starts from square one at his new employer. If this happens frequently enough in his career, he might reach retirement age with very little to show in terms of savings.

Since the employee usually can't "take it with him" when he changes jobs, it makes a whole lot of sense for him to save on his own.

[misbee]

lupus,
please correct me if i am wrong but i assume that the retirement plans you cited on your post apply to those employed in the Phils. because for most US companies I know, in the case where employees quit the company, there are options available to them: they can leave the account where it is and still continue to have access to the acct but they could no longer contribute, rollover their 401k account to an IRA or to the 401k plan of their new employer.

i do see your point though, if an employee is not able to take his retirement funds with him when he changes jobs then, he's better of setting up his own retirement plan.

i am happy to see that there's quite a few of us here who are starting to save for their retirement. i don't know with you guys/gals but sometimes, saving up for a college fund crosses my mind too even though, i still don't have kids. because i can just imagine how much would it cost me to send my kids to a good school without the help of any investment plans.

i am just curious for those who have 401k company match plans, what's your vestment period like? at my present company, we have to be with the company for 4 years to be fully vested to the company match - 25% per year. with my previous employer, you are 100% vested the date you are hired. too bad, i had to leave the company.

[misbee]

Originally posted by kamehameha
I agree with stnickmt. Start saving for retirement as early as possible.

I do contribute to 401K but I supplement it with a contribution to a Roth IRA because of the limited choices of funds from my company's 401K plan. I read a lot of articles that recommend maxing out 401K contribution (15% of your gross annual salary or 10,500 whichever is less) so that's what I'm doing. There a lot of benefits contributing to a 401K plan. You may want to refer to the following sites for more information on retirement planning.

www.cnnfn.com/retirement

www.money.com

http://majestic.vanguard.com/RRC/DA

i agree we have to start saving early since time is to our advantage with the compounding formula. i commend you for being able to max out your contribution. i did try that for some months but then i went back to 5%, at this time, i don't think i can afford to max it out. but, i am targetting starting next year, i'll put at least 10%.

[lupuS]

Yes, misbee, my observations referred to employers and employees in the Philippines. I took the lead from your opening post, in which you asked those of us based in Pinas what the options were over here.

[misbee]

Originally posted by lupuS
Yes, misbee, my observations referred to employers and employees in the Philippines. I took the lead from your opening post, in which you asked those of us based in Pinas what the options were over here.

thanks for the clarification, lupus.

just a follow up question, does this mean if you contributed x number of pesos to a retirement fund you can't get it back when you leave the company. isn't that cheating against the employee i mean, it's your money then you should have access to it right?

[VINCEsanity]

hindi pa po. caus i just start working. siguro after a yr na lang.

[lupuS]

misbee, in the case you mentioned, the employee can get all his contributions back when he quits. He might even get some interest.

But such contributory plans are rare in this country. The typical retirement programs here involve only the company making the contributions.

[Agimat]

Originally posted by tagaabucay
not sure if tutuo pa rin ito pero some yrs back :rolleyes:
the common practice for pvt companies ay to have their own retirement plan... most common of this ay a lump sum benefit in time of retirement (some really huge companies, offers their own pension plan).

there are two types of these retirement plans... :o
a defined benefit plan - where you get your benefit in term of length of stay in the company and a multiple of your mthly salary... ex. 1.25 x montly salary at retirement x yrs of svc with the company.

a defined contribution plan - where you literally saves, via mnthly payroll deduction, for your retirement. your savings is matched, to a certain percentage, by your company. your savings+the company's matching contribution + interest is what you get upon retirement. There usually is a percentage of the company's contribution you get depending on the vesting schedule.... ex 6% of your salary + 3% (matches 50% of ee contrib) from the company + interest (usually more than savings acct rate) x vesting schedule (ei you get 50% of employer contrib after 5yrs of svc, 60% after 6 yrs,... 100% after 10yrs or more).
;)

you are correct on your observations. the most common of which are defined benefit retirement plans. the standard is # of years of service x final monthly salary x 1.25. this applies if you work for the company for at least 10 years. if you have less than 10 years, a scaled benefit is given dependending on the years of service. usually, if you have less than 5 years, you would have no retirement benefit.

other companies offer more than 1.25 factor. several big companies offer as much as 3.5 for really loyal employees.

i did some retirement plan valuations a few years ago for an insurance company. they usually have fund manager's (BPI Asset management, etc..). but a new emerging player in company retirement packages are Pension Plans. This is now becoming more attractive since they have been adding benefits to the plan - death benefit, accidental death, disability etc... so it's like having a pension and a life/accident insurance all in one. and if the member left the company, they could convert in to an individual plan and continue. But the ard thing here is that you cannot transfer your plan to another company.

[misbee]

Originally posted by lupuS
misbee, in the case you mentioned, the employee can get all his contributions back when he quits. He might even get some interest.

But such contributory plans are rare in this country. The typical retirement programs here involve only the company making the contributions.

thanks for the clarification. ok, that's fair enough then.

[mcgirl04]

I invest for retirement. I started 6 years ago (I'm now 31) with my current employer. I was contributing 14% up until I got pregnant with my son. Then I reduced the contribution to 7.5%, the maximum the company matches, dollar for a dollar. Ever since I started, I have never touched my 401k, not even borrowed from it. I also have emergency savings, entertainment savings, education savings account for my son and Roth IRA. I put the allowed maximum into the Roth IRA and the education savings account. For emergency savings, I have 6 months worth of living expenses including maximum out-of-pocket for healthcare and car insurance deductible. When my husband starts working (he's watching the baby while studying for the NCLEX), we're going to put the allowed maximum in 401k, open a 529 plan for our son and increase our savings so we can buy a house. Our cars are paid off, we pay the credit card bills in full every month, and we have really good credit.

[Dunedain]

For those who are US based, do you contribute to your 401K?

Yes.

How many %?

I won't say the value, but I will say that I started small just to scale my finances. Then I bumped it up and I keep on bumping 'til I get to the limit (as addressed by company looking after my 401k account).

(you can skip this question if you want) When did you start?

More than 5 years ago.

When do you plan to retire?

Not anytime soon. I'm still having a blast.

[froshie1]

For those who are US based, do you contribute to your 401K?

Yes.

How many %?

I won't say the value, but I will say that I started small just to scale my finances. Then I bumped it up and I keep on bumping 'til I get to the limit (as addressed by company looking after my 401k account).

(you can skip this question if you want) When did you start?

More than 5 years ago.

When do you plan to retire?

Not anytime soon. I'm still having a blast.

Parehas ba ang concept ng 401k sa provident fund? Mayron kami dito sa company namin pinapagsave kami and then tatapatan ng employer namin starting 5 years iyong naipon namin pero certain percentage lang. Sa 401k ba 1 is to 1 ang tapatan?

[knightrader]

Parehas ba ang concept ng 401k sa provident fund? Mayron kami dito sa company namin pinapagsave kami and then tatapatan ng employer namin starting 5 years iyong naipon namin pero certain percentage lang. Sa 401k ba 1 is to 1 ang tapatan?

Every corporation is different in their 401K administration. Some will match dollar-for-dollar up to 5% of your contributions. Some up to 10%. Some will match just 50 cents to the dollar. Some have vesting periods BEFORE you are entitled to your 401K. Some just months, some 3-5 years of employment. And some do not even have a 401k plan.

When I quit my last job to pursue trading, I transfered my 401K into a Rollover IRA. This is probably one of the best options as you gain more control of your account. Anyway, the tax penalties for cashing out retirement accounts are severe.