Lexie wrote: I will be very surprised if my children ever see social security. My neighbor is a truck driver and his company just informed all the drivers they are doing away with pension and insurance. Wow! I can't imagine.

Really sad to hear, and I know those are happening to people all over the country.

I will be very surprised if my children ever see social security. My neighbor is a truck driver and his company just informed all the drivers they are doing away with pension and insurance. Wow! I can't imagine.

In my opinion, there should be some for of matching of 401ks at all companies. 50 years ago companies offered defined pensions, and that changes to 401k matching to offer "flexibility" as many people did not stay at one employer. Now many companies aren't offering any kind of retirement plans. Its very scary because the younger generation is not going to be able to retire on SS alone (even if its there when they retire).

FrankN wrote: Which can make saving for retirement next to impossible. My wife's employer recently stopped offering benefits, both health insurance and 401k matching. Luckily we both work so we are okay, but it makes it so much more difficult if your employer is not even contributing anything to your retirement.

I've been in that position and I hated it, because we were both so aware that we were only one medical emergency away from poverty or bankruptcy. We were just over the Medicare limit, but it isn't possible to build up reserves or an emergency fund when every penny is going on basic living costs.

Lexie wrote: So True FrankN. These days a lot of companies are trying to reduce costs by only hiring part time workers. This means they don't have to supply benefits or investment plans. Many folks are on their own when it comes to insurance and retirement.

Which can make saving for retirement next to impossible. My wife's employer recently stopped offering benefits, both health insurance and 401k matching. Luckily we both work so we are okay, but it makes it so much more difficult if your employer is not even contributing anything to your retirement.

GOLDBUG you make a good point. See companies offering their benefits and they have the option of retirement plans. Have to sigh as the workers are making enough to exist and extras for retirement are few and far between. Truth I never could afford it until I was working in a higher income where I actually had extra discretionary money to set aside.

Lexie wrote: So True FrankN. These days a lot of companies are trying to reduce costs by only hiring part time workers. This means they don't have to supply benefits or investment plans. Many folks are on their own when it comes to insurance and retirement.

Too true, and it is normally the lower paid workers who see their benefits and their hours slashed, which means that they are the people in the worst positions to pay for insurance or invest for retirement.

So True FrankN. These days a lot of companies are trying to reduce costs by only hiring part time workers. This means they don't have to supply benefits or investment plans. Many folks are on their own when it comes to insurance and retirement.

This used to be fairly common, but most companies do not offer this anymore.

Goldbug wrote: A Tax Deferred Annuity Plan, called a 403b, is one where you pay the money in, and do not pay the tax on it until you withdraw it, usually after you retire.

Hence the term, tax deferred. My job has something like that as well and, you're right, it is a complex thing to be a part of, but it pays well in the end

It lets the funds grow with the benefit of extra seed capital from the money you'd otherwise have paid in tax. It's a really complex topic, and I am not an accountant, so you might find this useful on the differences: http://www.403bwise.com/

Thank you for the link. Going in my bookmarks right next to the Turbo Tax bookmark.

This sounds like a really great opportunity for you. If their contribution is based on the money you earn, does that mean that at the end of four years they put 100% of what you earned that year into the plan? I've never heard of anything like this, but I have a feeling you're going to be racking up a good retirement egg.

FrugalFran, how I understand it is that these are the amounts that they will put in your plan at the end of the year based on how much money you've made throughout the year. I'm hoping that I get a chance to sit in on the retirement meeting that's coming up in a few weeks. I'm not eligible to sign up yet, but it would be nice to know how it all works.

What's the difference between this and a regular IRA?

Breakinger, how does the company contribution work? Are those percentages indicating how they will match your contribution?

A Tax Deferred Annuity Plan, called a 403b, is one where you pay the money in, and do not pay the tax on it until you withdraw it, usually after you retire. It lets the funds grow with the benefit of extra seed capital from the money you'd otherwise have paid in tax. It's a really complex topic, and I am not an accountant, so you might find this useful on the differences: http://www.403bwise.com/

I am starting a new job in a week and while I was looking through their personnel policy I found that they offer a retirement program through a Tax Deferred Annuity Plan. Has anyone ever heard of this and can explain it to me? Every other job I've ever worked at has always been a 401k. It also states that each year the agency will make contributions to the plan like this:
1 year 25%
2 years 50%
3 years 75%
4 years 100%
It says that I can make contributions too, which I want to do, but how much should I invest myself?