Comments on: Observations From an Employer’s Benefits Fair Reveal Attitudes Toward Saving Money

By: Dave

Dave — Sat, 30 Aug 2008 04:44:27 +0000

I think you mean, “The Guilty Conscience.”

Fix it.

Thanks.

By: The Best of Generation X Finance From 2007 : Generation X Finance

The Best of Generation X Finance From 2007 : Generation X Finance — Mon, 31 Dec 2007 17:23:58 +0000

[...] Observations From an Employer’s Benefit Fair Reveals Attitudes Towards Saving Money [...]

By: brip blap » Blog Archive » linklings, July 20th, 2007

brip blap » Blog Archive » linklings, July 20th, 2007 — Tue, 02 Oct 2007 01:46:43 +0000

[...] “Observations From an Employer’s Benefits Fair Reveal Attitudes Toward Saving Money” from Generation X Finance is a good breakdown of saving habits into five categories. I fall into the “Saver” category, but what disappoints me is that there’s only one “good” category. There really needs to be more effort put into financial education in this country if people really think their brokers can beat a tax-advantaged employer-matched savings account. [...]

By: Weekly Personal Finance Review

Weekly Personal Finance Review — Sun, 22 Jul 2007 17:32:14 +0000

[...] X finance talks about observations from an employers’ benefits fair. I particularly liked the conversation with The Outside Investor. It reminded me that people often [...]

By: Roundup for week of 16 July 2007: Mojave edition at Mighty Bargain Hunter

Roundup for week of 16 July 2007: Mojave edition at Mighty Bargain Hunter — Sun, 22 Jul 2007 03:48:18 +0000

[...] Generation X Finance makes some observations about attitudes toward saving money. [...]

By: Cash Money Life - A Personal Finance Blog with a Salute to the Military » More Great Personal Finance Posts - Weekly Round Up

Sat, 21 Jul 2007 22:25:37 +0000

[...] X Finance – Observations From an Employer’s Benefits Fair Reveal Attitudes Toward Saving Money. Jeremy writes about his work experience at a benefits fair and based on his observations, puts [...]

By: Ben

Ben — Thu, 19 Jul 2007 17:42:16 +0000

I personally use my companies 401k, but I only put in enough to capture the full match my company offers. The funds offered under the plan have some of the most dismal returns I’ve ever seen with too many unjustifiable ups and downs, so I keep I keep all of that money parked in a bond fund that only yields about 2% to 3% a year. But hey, it’s free money so as long as it’s earning something I can live with it.

The rest of the money that I have earmarked for retirement goes into a self directed Roth IRA.

By: Jeremy

Jeremy — Wed, 18 Jul 2007 17:52:05 +0000

You’re definitely right, Steve. There is a bit of a conflict when you are talking about a fiduciary duty and corporate responsibility.

I’ve been browsing through section 401 of the tax code and trying to find explicit information and haven’t formed any conclusions yet, but I do think I found what could be the key to why money is locked in while still employed.

I think it is important to realize that in the tax code and on all of the forms the money you put into a plan is almost always defined as “salary deferral”.

My wife is an attorney, not me but from my basic understanding I see this is important because if you are deferring part of your salary and it never touches you and the IRS doesn’t account for it then that is technically your employer’s money.

That money was never paid out to you, and instead you authorized the employer to defer that money into the plan. From there I think that is where the tax code, which states what qualified distributions are can maintain the position where you can’t pull the money out while an active employee because you have authorized them to defer that portion of your pay until a qualified distribution requirement has been met (attainment of age 59.5, hardship, death, termination, etc.)

So again, I’m not a lawyer and I haven’t received any definitive answer from someone with the authority to make a claim one way or the other, but that is the conclusion I have drawn from the information I have gone over thus far.

By: Steve Austin

Steve Austin — Wed, 18 Jul 2007 16:26:30 +0000

Thanks for elaborating on plan pricing. As a non-HR scrub (former) employee, it always burned me that the costs (plan administration and fund management) passed down to me via fund expense ratios were so opaque.

Anyway, doesn’t there seem to be a conflict of interest when a company’s C-level officers have a fiduciary duty to employees / plan members (to maximize their benefit and facilitate future financial security) yet at the same time have a corporate responsibility to shareholders (to get best value for benefits by tethering their costs)?

I realize that in terms of the corporation it’s commonly a balance between short term level of profitability and long term business growth, but the ERISA seems to legally change the game for the plan sponsors, who are compelled by the ERISA to act only in the interests of providing benefits to plan participants. I short, I don’t see how someone could have both corporate and pension/401(k) plan management responsibilities with impartiality.

By: Jen

Jen — Wed, 18 Jul 2007 02:18:49 +0000

I’m a saver/procrastinator/outside investor.

I started putting money in a 401(k) with my first job out of college. I also started an IRA then, too, since my income was low enough and I didn’t qualify for the pension plan. My second job I didn’t use the company 401(k) – I didn’t like the vesting scheme. Stupid excuse, I know. But I did continue to contribute to my IRA. With my third job, I contribute to the 401(k) and I started a Roth IRA. And, starting this year, I began contributing to a Roth 401(k).

I’m a procrastinator because while I save, I procrastinate on upping the contribution amount I was giving 10%, and now I’m up to 11%. Or maybe I’m at 12% now! I don’t remember. It’s not as much as I think I should be putting in more, like 15-17%, but I bought a condo last year and have been trying to adjust to the new expenses. Next year I will probably up my contribution again. But, it’s always a hard choice: retirement or mortgage pay down or save up for big expense (painting my blank, white walls)?