I think retirement is a pipe dream... (2 Viewers)

[BarBar]

Something sounds off here....I believe 401k's and many other retirement savings instruments by law have to pay out to beneficiaries of the bereaved....

Retirement annuities (which are becoming increasingly rare these days) where the company pays into exclusively (or nearly exclusively) may be a different story....

Ok don't quote me on that. I am pretty sure it was a 401k but it is possible it was some other kind of account.

The one with my mother was definitely a 401k.

 

[saintmdterps]

If I’m still working over 60, things have gone horribly wrong.

If so then welcome to my world, brother.

 

[HoustonSaint68]

Ok don't quote me on that. I am pretty sure it was a 401k but it is possible it was some other kind of account.

The one with my mother was definitely a 401k.

Gotcha -- basically, any personal 401k contributions cannot be kept from heirs/beneficiaries (although there certainly may be tax issues involved depending on how it is invested). As for company/matching contributions, that's a different ballgame. I'm far from an expert, but there is no way that a company can keep private 401k contributions.

As someone else mentioned, it might be some kind of annuity product and, if a survivor benefit isn't set up the right way (basically, the product would then cost a lot more) then, yes, that could be kept by the company. Again, that would have made the product a lot cheaper for your dad.

As for your mom's story, very sorry to hear that. That's why I cashed out my retirement when I retired, and invested it myself.

 

[Big_L]

no wife , no kids, no debt, rental property and have been saving 15% for a long time.

Vacationing in Costa Rica in 204 days 6 hours and thirty two minutes. 2 days are scheduled with a real estate agent and local American guide. I'm gonna die by a monkey/ iguana invasion.

I've been looking at Costa Rica too!

 

[Big_L]

I am a disabled veteran so I get a monthly check from the VA for the rest of my years. I work for the Feds too, so I will be able to retire in about 8 years. The VA covers my health care since I am service connected. I do regret not retiring from the AF, did 13 years, but my body (knees) weren't up to the task anymore. I am looking at moving overseas when I'm done working. I have heard good things about Latin America so I'm looking there first. I have a friend who graduated with me from HS and he retired (USAF) in the PI. So yeah, your dollar does go farther overseas.

 

[JenningsTruckers]

I am a disabled veteran so I get a monthly check from the VA for the rest of my years. I work for the Feds too, so I will be able to retire in about 8 years. The VA covers my health care since I am service connected. I do regret not retiring from the AF, did 13 years, but my body (knees) weren't up to the task anymore. I am looking at moving overseas when I'm done working. I have heard good things about Latin America so I'm looking there first. I have a friend who graduated with me from HS and he retired (USAF) in the PI. So yeah, your dollar does go farther overseas.

Wow , thank you Sir for your service !!

 

[jboss]

Meaning when the person dies there is still a payout. Survivors benefits is the proper term. Apologies.

With his the payment literally stops on the day of his death and I got nothing. There was still like 40 grand in there that they just kept.

Just check into yours and make sure is all I am saying. I am sure he thought the same, but once you are gone there isn't much you can do about it.


Another small bit of advice is to keep up with everything and stay on top of it.

20 years ago my mother was awarded half of the value of that same 401k in a divorce.

She kept the claims paperwork in a folder until she was ready to retire(this year). Turns out the company who administered that 401k has been bought and sold 7 times in the last 20 years and finally shuttered due to bankruptcy. We spent MONTHS trying to get that money. I contacted a few attorneys and even used LinkedIn to find a bunch of employees that used to work for said company. The same message from all of them "sorry it's too late. The money is gone."


I learned a lot about this stuff in the last 2 years, unfortunately. It seems like every move is designed to help you lose your money.

Lawyers said that? Unless it got legislated out at some point, there are laws preventing this. Even if a company goes bankrupt the 401k plan money isn't affected.

Edit: I'm pretty sure you've tried this but jic https://unclaimedretirementbenefits.com/search

 

[zatsnzapps]

Ok don't quote me on that. I am pretty sure it was a 401k but it is possible it was some other kind of account.

The one with my mother was definitely a 401k.

Regarding 401(k) accounts, the whole purpose of designating beneficiaries is to pass along the money when the account owner passes. In addition to the primary beneficiaries, there are also secondary beneficiaries that are usually noted by the account holder in the event that the primary beneficiary either passes at the same time or prior to the account holder.

If beneficiaries are not noted, then the account funds go into the estate and through probate. The fund company does not keep the money.

It sounds like what you could be dealing with is a pension. With a pension, there is generally a clause to continue the pension payments to the spouse if the former employee passes first, but it doesn't go any further than that. In the event that the former employee outlives the spouse, the pension also ends at death.

 

[zatsnzapps]

Sorry for the double-post, but I had another thought to help explain the difference between a 401(k) and a pension (from a high level).

All of the money in the 401(k) is the account holder's. It consists of funds deducted pre-tax (let's assume we're not dealing with a Roth 401(k) for now) from the employee's pay and may or may not include employer contributions. The personal money that one puts in ALWAYS belongs to the individual, and the employer contributions vest over a period of time from immediately to a few years. Usually, there is a percentage of vesting earned every year, so it's generally not an all or nothing thing. Say, for example, the employer contributions vest over 5 years. They will usually vest at 20% per year over the 5 years, so if the account holder worked at the company for 4 years, he/she would get 100% of the money they contributed and 80% of the employer contributions. At that point, all of their contributions AND the vested employer contributions are the employee's money. Therefore, this money can be transferred to other family members or anyone the account holder would like to pass them to. In the event that there are employer contributions that are not vested, that money is "deducted" (actually, it was never available) from the account.

A pension is totally different. It's a set amount of money over the remainder of one's life beginning at a certain age. There are probably different methods to calculate the monthly amount, but the way I'm familiar with is for the employee to earn a certain percentage of a salary (let's call it the highest yearly salary they earned for discussion purposes) per year up to a max percentage. So, in this example, if the employee earns 3% each year up to a max of 66%, and worked there 15 years, then the monthly amount would be 45% of their max salary divided by 12 to get the per month amount. This money is NOT the employee's. It is in the fund that is paying all the pensions and the payments will continue for the rest of the employees life, so there is no maximum payout (just a max salary percentage for the monthly amount), so that's why it doesn't transfer to family members outside of the spouse.

 

[BarBar]

Regarding 401(k) accounts, the whole purpose of designating beneficiaries is to pass along the money when the account owner passes. In addition to the primary beneficiaries, there are also secondary beneficiaries that are usually noted by the account holder in the event that the primary beneficiary either passes at the same time or prior to the account holder.

If beneficiaries are not noted, then the account funds go into the estate and through probate. The fund company does not keep the money.

It sounds like what you could be dealing with is a pension. With a pension, there is generally a clause to continue the pension payments to the spouse if the former employee passes first, but it doesn't go any further than that. In the event that the former employee outlives the spouse, the pension also ends at death.

I don't think it was a pension but I am gonna pull the paperwork out and look today. This thread got me curious again.

I was shocked by it. He had 2 accounts at 2 different companies. The other one paid me out in just a few weeks. This second one said I wasn't entitled to anything. In my memory they were both 401k but that may not be reality.

 

[BarBar]

Sorry for the double-post, but I had another thought to help explain the difference between a 401(k) and a pension (from a high level).

All of the money in the 401(k) is the account holder's. It consists of funds deducted pre-tax (let's assume we're not dealing with a Roth 401(k) for now) from the employee's pay and may or may not include employer contributions. The personal money that one puts in ALWAYS belongs to the individual, and the employer contributions vest over a period of time from immediately to a few years. Usually, there is a percentage of vesting earned every year, so it's generally not an all or nothing thing. Say, for example, the employer contributions vest over 5 years. They will usually vest at 20% per year over the 5 years, so if the account holder worked at the company for 4 years, he/she would get 100% of the money they contributed and 80% of the employer contributions. At that point, all of their contributions AND the vested employer contributions are the employee's money. Therefore, this money can be transferred to other family members or anyone the account holder would like to pass them to. In the event that there are employer contributions that are not vested, that money is "deducted" (actually, it was never available) from the account.

A pension is totally different. It's a set amount of money over the remainder of one's life beginning at a certain age. There are probably different methods to calculate the monthly amount, but the way I'm familiar with is for the employee to earn a certain percentage of a salary (let's call it the highest yearly salary they earned for discussion purposes) per year up to a max percentage. So, in this example, if the employee earns 3% each year up to a max of 66%, and worked there 15 years, then the monthly amount would be 45% of their max salary divided by 12 to get the per month amount. This money is NOT the employee's. It is in the fund that is paying all the pensions and the payments will continue for the rest of the employees life, so there is no maximum payout (just a max salary percentage for the monthly amount), so that's why it doesn't transfer to family members outside of the spouse.

Just looked. It was a pension. You guys are totally right. The 2nd account was indeed a 401k which is why they paid it out so quickly.

 

[bigdaddysaints]

The wife and I made some terrible financial choices in the first 15 years we were married, and we'll probably never catch up to have a decent retirement.
Thats said, her parents made excellent financial choices in their 45 years in the work force. Both always put max into 401ks, etc. My Father in law worked for Shell and when they did pensions, one of the things they did was also give him shares of stock and he also bought a lot of extra over the years. So they are both retired at 62. My Father in law could have retired at 55, but worked until he someboby finally ticked him off.
So, long story short, my in laws are my retirement plan. His financial guy told him that if they lived to be 90, they would have $27M, i told them i wasn't greety, and I'd be ok if they passed away before that (jokingly of course)....

 

[BooBirdSaint]

The wife and I made some terrible financial choices in the first 15 years we were married, and we'll probably never catch up to have a decent retirement.
Thats said, her parents made excellent financial choices in their 45 years in the work force. Both always put max into 401ks, etc. My Father in law worked for Shell and when they did pensions, one of the things they did was also give him shares of stock and he also bought a lot of extra over the years. So they are both retired at 62. My Father in law could have retired at 55, but worked until he someboby finally ticked him off.
So, long story short, my in laws are my retirement plan. His financial guy told him that if they lived to be 90, they would have $27M, i told them i wasn't greety, and I'd be ok if they passed away before that (jokingly of course)....

Most major O&G companies have both a company managed pension and employee 401k. Its sauce for the goose. The O&G is highly competitive so they use these tools to attract and retain the talent. The idea of a pension is the more time you invest by staying at the company the more you earn. However, I tend to think that concept is lost on a lot of younger people. If a smaller independent is offering say 10% more in base salary but no pension, then most are bird in the hand and will chase the short-term gains. I get there are a lot of reasons to chase the base salary. But, looking back at almost 35 years in the industry and working for only two companies, I'm well-fortified by my time in grade. The 401k ebbs and flows with the market (if you've been faithful to it) but the pension is worriless and builds with nothing more than the time you've spent in service to that company.
It's a shame that the pension programs were often used as a cash cow for short sighted municipalities or wasteful (or even criminal) company managers. They are good programs typically. Just harder and harder to find.

 

[HoustonSaint68]

Most major O&G companies have both a company managed pension and employee 401k. Its sauce for the goose. The O&G is highly competitive so they use these tools to attract and retain the talent. The idea of a pension is the more time you invest in the company the more you earn. However, I tend to think that concept is lost on a lot of younger people. If a smaller independent is offering say 10% more in base salary but no pension, then most are bird in the hand and will chase the short-term gains. I get there are a lot of reasons to chase the base salary. But, looking back at almost 35 years in the industry and working for only two companies, I'm well-fortified by my time in grade. The 401k ebbs and flows with the market (if you've been faithful to it) but the pension is worriless and builds with nothing more than the time you've spent in service to that company.
It's a shame that the pension programs were often used as a cash cow for short sighted municipalities or wasteful (or even criminal) company managers. They are good programs typically. Just harder and harder to find.

Yup. 14+ with one, then 14+ with another. The first with a really nice takeover poison pill severance, and the second with a voluntary severance package. Cashed out and reinvested the pension with the second.

I had quite a number of batted eyes at me over those 29 years but I liked my work and (for the most part) the people I worked with, so it never made sense to me to chase a bit more in base salary with someone else. Definitely the right decision for me, but I'm sad that that kind of stability is just not available for most of today's young workers.

I was never embarrassed to work for Big Oil and am not now. For all its faults, the positive impact of the fossil fuel industry on peoples' standard of living is sadly ignored and misappropriated.

 

[bigdaddysaints]

the company my mother in law worked for had a pension. they decided to get rid of it, so employees had to take the lump sum that they had acured. she had worked for them for 30+ years. she didn't know what the right thing to do with the money. that's when they decided to get a financial advisor. he gave them his advice (don't ask, because I don't remember). he asked if they didn't mind, he would look at my father in laws money also. he agreed. a couple weeks later he called my father in law and asked him why he was still working?
they both continued to work for another 5 years.
I don't know how much money they have right now because they do spend liberally. they usually pay for our family vacations each year, etc. me and the wife have the only grandkids, her 2 sisters never got married or had children.
when they do pass away, I am hoping they saved enough for the grandkids at least (and enough for me and the wife to pay off our house lol)..