Ooooh, it's dumb question time!
- Thread starter TheWife
- Start date
FalconCapt
New Member
Re: Ooooh, it\'s dumb question time!
If you change companies you start over at day 1... the benefits do not transfer...
If you change companies you start over at day 1... the benefits do not transfer...
Re: Ooooh, it\'s dumb question time!
Each company has it's own rules for full retirement bennies. At AA, my company senority accrual clock started ticking the day I started with Eagle, and continued through my transfer to AA, since they're sister companies. At AMR you are fully vested in your 401k after 5 years, and you get to keep your retiree travel card once you have 5 years too (I think, I'd have to check on the travel issue). I think it is 20 years at AMR for full bennies, because I remember being very amused that I'd be 'eligable' for retirement at 40! Exactly what you get when you retire is spelled out either in the company policies, union contract, or both.
Each company has it's own rules for full retirement bennies. At AA, my company senority accrual clock started ticking the day I started with Eagle, and continued through my transfer to AA, since they're sister companies. At AMR you are fully vested in your 401k after 5 years, and you get to keep your retiree travel card once you have 5 years too (I think, I'd have to check on the travel issue). I think it is 20 years at AMR for full bennies, because I remember being very amused that I'd be 'eligable' for retirement at 40! Exactly what you get when you retire is spelled out either in the company policies, union contract, or both.
Re: Ooooh, it\'s dumb question time!
There are many different types of retirement plans, and you have to look at each one specifically.
There are a couple of things to keep in mind, though. Plans like a 401k plan are typically *owned* by the employee after they have become fully vested (the amount of time to become vested will vary with the plan. Might be relatively short like a couple of years, or much longer). The 401k is a retirement account, run separately from the company that you work for, that your employer has agreed to help set up and manage in some way. Often you are putting part of your salary (pre-taxes!) into the 401k to fund it. Typically the money in that account becomes yours, and you can take it with you if you change jobs. The really good plans will have the company matching some of your contributions. If you have a company-matching funds plan you'd better be putting in at least as much as they'll match - that's free money folks, step right up!
Other retirement packages (like pension plans) can be completely owned and operated by the company you work for. Receiving those benefits is much more dependent upon the contract that you are working under. Some of those plans can go away if the company folds, too.
The Roth IRA is also a great retirement plan that you can (and should) do on your own. In the Roth you buy into a plan (often invested in mutual funds or something similar) with your personal money (i.e. after taxes have been taken out), then the account grows, tax-free! Do the math kids, 'cause investing money that will grow tax free is a great investment. Start now. Now, I said. As soon as you have paid your rent and grocery money, put a little bit into a Roth IRA. You'll call me up and thank me in thirty years. Don't spend it on a new car that will lose all its value in 5 years. Have you ever seen the math on compound interest? That multiplication looks even better when you can take those proceeds out without having to pay 35% or 50% in taxes on it. Want to be a multi-millionaire when you retire?
[disclaimer] I have absolutely no financial background. There are probably errors in the descriptions above. Go and talk to a professional, educate yourselves and plan ahead.[/disclaimer]
There are many different types of retirement plans, and you have to look at each one specifically.
There are a couple of things to keep in mind, though. Plans like a 401k plan are typically *owned* by the employee after they have become fully vested (the amount of time to become vested will vary with the plan. Might be relatively short like a couple of years, or much longer). The 401k is a retirement account, run separately from the company that you work for, that your employer has agreed to help set up and manage in some way. Often you are putting part of your salary (pre-taxes!) into the 401k to fund it. Typically the money in that account becomes yours, and you can take it with you if you change jobs. The really good plans will have the company matching some of your contributions. If you have a company-matching funds plan you'd better be putting in at least as much as they'll match - that's free money folks, step right up!
Other retirement packages (like pension plans) can be completely owned and operated by the company you work for. Receiving those benefits is much more dependent upon the contract that you are working under. Some of those plans can go away if the company folds, too.
The Roth IRA is also a great retirement plan that you can (and should) do on your own. In the Roth you buy into a plan (often invested in mutual funds or something similar) with your personal money (i.e. after taxes have been taken out), then the account grows, tax-free! Do the math kids, 'cause investing money that will grow tax free is a great investment. Start now. Now, I said. As soon as you have paid your rent and grocery money, put a little bit into a Roth IRA. You'll call me up and thank me in thirty years. Don't spend it on a new car that will lose all its value in 5 years. Have you ever seen the math on compound interest? That multiplication looks even better when you can take those proceeds out without having to pay 35% or 50% in taxes on it. Want to be a multi-millionaire when you retire?
[disclaimer] I have absolutely no financial background. There are probably errors in the descriptions above. Go and talk to a professional, educate yourselves and plan ahead.[/disclaimer]
Re: Ooooh, it\'s dumb question time!
Some very good reading is the "Rich Dad/Poor Dad" series, and also Suze Orman's books. We don't trust company pensions or social security to take care of us down the road. We're getting a late start with our retirement 'planning'. We both have 401ks, when I got furloughed I had to take a payout (I probably shoud have rolled it into an IRA, but it was not Roth eligeable), and pay taxes on it.
Prepare now! Start young! I know you need money for rent & bills and such, but if you start with small amounts young, and builld up the habit of putting a little away, it will be something big by the time you need it!
You can not start too early preparing your retirement! Also do not rely on your company pension to take care of you!
Some very good reading is the "Rich Dad/Poor Dad" series, and also Suze Orman's books. We don't trust company pensions or social security to take care of us down the road. We're getting a late start with our retirement 'planning'. We both have 401ks, when I got furloughed I had to take a payout (I probably shoud have rolled it into an IRA, but it was not Roth eligeable), and pay taxes on it.
Prepare now! Start young! I know you need money for rent & bills and such, but if you start with small amounts young, and builld up the habit of putting a little away, it will be something big by the time you need it!
You can not start too early preparing your retirement! Also do not rely on your company pension to take care of you!
stuckingfk
Well-Known Member
Re: Ooooh, it\'s dumb question time!
[ QUOTE ]
Some very good reading is the "Rich Dad/Poor Dad" series, and also Suze Orman's books. We don't trust company pensions or social security to take care of us down the road. We're getting a late start with our retirement 'planning'. We both have 401ks, when I got furloughed I had to take a payout (I probably shoud have rolled it into an IRA, but it was not Roth eligeable), and pay taxes on it.
[/ QUOTE ]
I second the Rich Dad/Poor Dad series of books. I have all but two of them and they are excellent. I also recommend David Bach's Automatic Millionaire and Smart Couple's Finish Rich. Both are easy to read and give you an idea how compound interest is unbelievable over time.
The only thing I have a problem with about 401Ks, Roths, and what not is that you can't touch that till 59 1/2 years old. I don't think I am going to make it that far so having money for when I am dead is pointless. So I'll stick to Real Estate (Rich Dad's favorite) and bonds that don't take 30 years to mature.
[ QUOTE ]
Some very good reading is the "Rich Dad/Poor Dad" series, and also Suze Orman's books. We don't trust company pensions or social security to take care of us down the road. We're getting a late start with our retirement 'planning'. We both have 401ks, when I got furloughed I had to take a payout (I probably shoud have rolled it into an IRA, but it was not Roth eligeable), and pay taxes on it.
[/ QUOTE ]
I second the Rich Dad/Poor Dad series of books. I have all but two of them and they are excellent. I also recommend David Bach's Automatic Millionaire and Smart Couple's Finish Rich. Both are easy to read and give you an idea how compound interest is unbelievable over time.
The only thing I have a problem with about 401Ks, Roths, and what not is that you can't touch that till 59 1/2 years old. I don't think I am going to make it that far so having money for when I am dead is pointless. So I'll stick to Real Estate (Rich Dad's favorite) and bonds that don't take 30 years to mature.