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Retirement - unsecured vs. secured

ruffryder

Well-known member
Lifetime Membership
What do you guys think? Is it right that retirement promises to company employees are unsecured debt, while loans to companies are secured?

With the latest gm stuff going around, I never realized this was the case.

What are your thoughts?
 
I think there is something really scary about companies wiping out your retirement due to bad management, while still keeping the company alive.

On the other hand, having retirement based upon 401k's is scary too. Look at the loss of value that has occurred in the last couple of years.
 
Most retirment accounts are not funded by the companies on anything except paper.
A 401k is a fine deal, but you need to manage it like anything else.

Any company that doesn't offer a seperate 401k system (IMO) doesn't have a retirement system.

Heres the scam and how it works.

You go to work for me.
I am offering matching funds on a company 401k up to the first 3%.
Sounds like a good deal.
Except it a COMPANY 401k. Which usually means the 401K is based on company stock. When the stock goes up, so does your 401k. If the company goes under, you lose everything.
Plus, most companies only fund the 401k on paper. Since it's company stock they just do the book keeping and never really pay into the 401k till you actually retire.
Anything else and the 401k stays in company stock.

ALWAYS make sure any 401k is invested with a private company and not based on a single or set allotment of investments.

Same with a straight retirement account. It's based on the company value. If the company goes under, you lose everything.
Life sucks. Plan for your own future.
There is a law in place that if a company goes bust, the government is on the tap for your retirement. Problem is, you will only get about 10c on the dollar in value.
Unless you are a UAW worker and voted for Obama, then you get 55c on the dollar.
 
On the other hand, having retirement based upon 401k's is scary too. Look at the loss of value that has occurred in the last couple of years.

Wasn't that part of the stink about Obama telling the Chrysler shareholders to give up or be destroyed by the whitehouse media machine? Some of the shareholders are firms that are 401k investors & not just companys that can afford the loss:o
 
Wasn't that part of the stink about Obama telling the Chrysler shareholders to give up or be destroyed by the whitehouse media machine? Some of the shareholders are firms that are 401k investors & not just companys that can afford the loss:o

On a per person basis retirees vs. share holders, who had more to loose? The retirees would loose all there retirement. The share holders would loose their money, but I would highly doubt if it was all there money, and if 401k's are involved, I doubt the 401k's would only have Chrysler stock.

It is a sticky situation no doubt.
 
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