All to say I’m happy to have transitioned all my 401k years ago!
[1] I worked in the defense industry. Nothing to do with planes: my company was acquired by Boeing and operated relatively independently.
SP500 closed at 3221 today. In Jan 2009, it was about $890 and that is only a 3.6x return.
Hindsight is 20/20, but you might've been even happier if you kept all your 401k in Boeing.
C.f. Enron employees with company stock...
[1] If your employer goes belly up after you retire, you are screwed.
[2] Because it's fixed contribution, as opposed to fixed payout, if you lived longer than you planned, you are screwed.
Generally speaking, the majority of (non DOD) Boeing employees should not be restricted by insider trading; It's often rumored to have broader reach than it does. In order to be an insider, you would need to have direct impact or insight into an unannounced project, corporate, or financial disclosure. It may even take some authority to be able to materially impact delivery deadlines or financials before you're considered an insider.
In 1935 when SS was enacted, life expectancy was 61.7 years. benefits didn't kick in until the average person was dead by 3.3 years.
If this chart is accurate: http://vis.stanford.edu/jheer/d3/pyramid/shift.html -- it looks like in 1930 less than ~5% of the population was older than 65.
If this chart is accurate: https://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS?locat... -- it looks like ~15% of the population is currently older than 65.
What was the life expectancy at age 18? At retirement age?
If you made it past childhood, you were pretty likely to die far later than 61 years.
Sidenote: It's laughable when companies say they think options are a better choice for the employee than a 401k match.
* with the current state of medical science.
If you retire during a recession, your planned 20 years of 401K runway may not last you more than 12. Or you might end up living longer than 20 years. Or both.
With a guaranteed payments pension, you will continue receiving benefits as long as you live. This aspect of it wont matter to you if you fall over dead at 68, but will matter greatly if you end up living longer than planned.
Right now, less than 5% of my retirement savings are going towards a pension (Social security). I would be much happier if that number (And the expected returns from it) were closer to 25% - and that's with the expectation that SS payments will unexpectedly drop in the future. Having an investment instrument that will pay me until I die is great for diversifying my portfolio.
Thanks to that, a fixed benefit pension as part of your retirement strategy is much more fiscally responsible than going all in on either a 401K, or a pension.
Maybe there's some way to have an insurance product to handle cases where people live longer than normal. That could be an improvement. But that should be handled by a fourth party.
That sounds like an annoying number of parties. But trust me -- mixing up of money for today with money for 30 years from now is just not a good system (in the private sector or government).
I thought that was the norm? I've only worked at one public company and they did matching in company stock as well - I'd periodically sell it and reinvest so only about 20% of my holdings was in company stock. I wish I'd kept more in their stock since they've done quite well.
At a not-Boeing company, I believe all of our 401k match was company stock, although we could move it to other funds after it came in as company stock.