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Comment by m23khan | Hacker News Reader

For some reason, our generation (GEN Y / Millennials) don't seem to care much for their pensions or retirement planning.

I think personally it is because of our atttitude towards retirement planning that majority of the companies today offer either no pension or almost-entirely employee-funded direct contribution based pension system.

My Dad drilled one concept into my head in my early days of career - everybody gets old and every old person wish to retire with pension.

I don't exclusively rely on my employer's pension plan for my retirement planning -- on top of it, I contribute to my state defined (bank managed) retirement funding.

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> For some reason, our generation (GEN Y / Millennials) don't seem to care much for...

I see a version of this statement all the time from us old people, sometimes it ends with "purchasing homes" or "full time long term careers at one company" say, or "retirement saving" as in your example.

I'm starting to suspect the reason just might be that the new generation doesn't actually have any fucking money or stable jobs. Just a theory.

> "I'm starting to suspect the reason just might be that the new generation doesn't actually have any fucking money or stable jobs. Just a theory."

possibly in other contexts, but obviously not in this one. if what the article states is true, they are paid pretty well at these companies, but seemingly at the cost of no matching retirement plans.

This is mostly anecdotal, but I don't know anyone outside the SF bubble that has a good, stable job they're happy with and who I see working there for more than a decade. It's all entry-level jobs these days. Can't make a career out of that.

Respectfully, I think that's an unrealistically high standard to set. Having a job that is stable and engaging with long term potential is an exceedingly rare find for any generation. And entry-level jobs are how you make your career - you work your way up.

>For some reason, our generation (GEN Y / Millennials) don't seem to care much for their pensions or retirement planning.

Perhaps it is because they don't wan't to pour what little money they have into what could likely be a black hole. $3.4 trillion[1] in retirement savings were swindled in the Big Short of 2008, and no justice was done despite the massive amount of fraud going on. And then there is Social Security, which they will never see a penny of.

There's a reason Millennials typically aren't buying houses, having kids, and investing in retirement funds. It's because they can't afford it and/or the risk is too high.

[1]http://www.pbs.org/wgbh/frontline/article/how-much-did-the-f...

The only way to lose your retirement savings in a crash like 2008 is to follow a maximally wrong investment strategy like cashing out the whole thing at the bottom of the market.

People who left their 401k investments alone, or drew them down slowly, have more value in their accounts now than they did before 2008.

I think you have the cause reversed: I frequently hear millennials express interest in retirement planning but it's usually couched as an impossible dream after paying off student loans, housing, healthcare, etc. with jobs which are on average lower paying and less secure than even the previous generation. Pensions sound great but how many jobs offer them at all now, and with the financial stability to make that a safe long-term bet?

Student loans are being paid off first and everything retirement related I've ever been offered vests after 3+ years. In my experience companies seem to be absolutely against giving raises that even match cost of living every year. That means that I am pretty much garunteed to be out before anything vests, just to keep my quality of life stable

Yah but you can still put in your own pre-tax money. You are stuck in the BS high expense ratio funds that some slick "benefits consultant" sold to HR/management for those 2-3 years, but as soon as you leave, you can roll over those 401(k) funds into a self-directed Roth IRA.

For me personally and for a few others I know, we have loans with 6%+ rates. For one of my loans its over 8%. I've looked at refinancing, which ends up with me paying less money overall but paying a higher amount each month.means I would need more money saved up in my emergency fund and have a higher risk of not making payments if I lost my income.

This has led to me just taking the money I would have put into a 401k and using it to pay off loans, which provide a financial benefit equivalent to having an investment grow by the same rate as the loans interest rate. That lets me snowball my payments and pay off the debt faster and eventually I will move the debt payments over to retirement. I probably would be better off overall putting the money into a 401k or Roth IRA if I could guarantee I would never be out of a job, but having graduated into the workforce during the Great Depression Ive become pretty averse to holding any significant amount of debt after seeing people lose everything

The Roth IRA, at least, can be a part of your emergency fund strategy. Contributions can be withdrawn without penalty (not earnings) at any time. I have an actual e-fund (cd ladder, though the rates on renewal will be even worse so I need a new plan), but for a true catastrophe, that's part of my strategy. It also gives you tax free growth. I've only had one investment pan out well, but it hurt to see 15% of the gains go to taxes. If it had been in my IRA I could've kept that money for reinvesting.

> For some reason, our generation (GEN Y / Millennials) don't seem to care much for their pensions or retirement planning.

I don't think the average American is any different.

http://www.cnbc.com/2016/09/12/heres-how-much-the-average-am...

Nearly half have no retirement savings at all.

> For some reason, our generation (GEN Y / Millennials) don't seem to care much for their pensions or retirement planning.

Really, the generation that normalized the concept of FI/RE (financial independence/retire early) has no interest in retirement? I find that hard to believe. I think it's more to do with the segment that is burdened with high debt loads. Those with the income seem excessively interested in retirement, while those of more modest means just want to get ahead.

> I think personally it is because of our atttitude towards retirement planning that majority of the companies today offer either no pension or almost-entirely employee-funded direct contribution based pension system.

I think it's a _little_ bit of that and a whole lot of "the government will take care of me." I mean it's a legitimate strategy to a lot of young voters. Too much student loan debt? Vote for Bernie, he'll nullify it. Broke at retirement age? Vote for Bernie 2.0, he's promising a healthy "basic income" for seniors, indexed to inflation.

Or they believe the Republic propaganda that the Social Services are broke and unsustainable, that anything they save is going to be stolen from them through taxes anyways, so there's no use saving.

As is usual, the answer is somewhere in the middle, which is being lost in this increasingly polarized world.

Probably pre-occupied with paying off all of our debt.

We don't think that we'll live long enough to collect a pension. Social Security will be unfunded long before we ever get a chance to draw from it.

That's an even better reason to do additional retirement savings where possible, though.

I saw my parents' retirement funds gutted by a bunch of cokehead psychos in 2008. Its very difficult for my generation to have any faith in current systems functioning or even existing 10, 20, 30 years down the road.

If the current system doesn't exist in 10, 20, 30 years then you've lost very little by contributing a meager 10% of your income (assuming middle class incomes, 10% isn't much), to retirement contributions.

And if it is still around, then you'll be ahead of most of our peers.

Regarding your parents' funds, were these pensions or investment accounts? Pensions got screwed, yes. But unless your money was being managed poorly, IRAs and such should've been fine, though temporarily low, you didn't lose any shares in your investments, just value.

Yeah, I think an important thing is to get your eggs our of one basket (your employer). Especially with how often this gen moves between them.

401k -> IRA -> Low cost index funds are a reasonable stepping block.

Don't pensions tends to have issues with behind underfunded?

I'd rather not have risks just swept under the rug.

No, this is your money. 401k (including matching $) is paid into an account you control. You can use it anytime, but if you do before some age (65?) there will be tax penalties.

59 1/2. For Traditional 401(k), you owe the taxes on it and an additional penalty if you withdraw early. You're required to take distributions from it starting at 70 (69 1/2?), because the feds want their tax dollars.

Roth 401(k) plans are less common, you'd owe a penalty but not taxes since it's pre-tax money. No mandatory distributions because they've already gotten your money.

IRAs are the same. HSAs (mentioned elsewhere) are tax-free if distributions are spent on medical costs. For non-medical costs, you owe taxes and a penalty. After age 65 you'd only owe taxes.

Some people on this thread are using "pensions" (which typically refers to a defined benefit pension based on number of years of service at a company) to also mean 401-Ks (defined contribution). Pensions have become pretty uncommon in the private sector and they're largely unknown in US tech companies at this point.

401-Ks have no underfunding problem. Of course, they expose you to market risk directly.

After seeing the collapse of so many pension systems in the news, I would run not walk away from any employer-funded pension system.

Give me the money so I can put it someplace where you won't spend it on this year's budget shortfall, thanks.

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