Lion:
That may be the case at the federal level, but the State of NY has a fully funded, well managed, retirement system system for it's employees that made 14% on it's investments last year, and has done so well over the years that for several years the state didn't have to put any money into it at all. Every year the Comptroller evaluates the fund's needs for the next 20 years and makes adjustments to the required contributions. Local governments are screaming right now because they have to contribute 16% of their payroll (some of which is paid by the employee) because the politicians and wall street drove the economy onto the rocks. As the economy recovers, that number will go back down. That contribution is for the employees who are working NOW. The retirees are being paid from the fund's earnings. There are more than 1,000 retirees collecting a NY pension who are more than 100 years old. How many of them would still be able to draw from a 401-k if they had existed back then?
Dave
Lackawanna Route of the Phoebe Snow
The investment whiz kids often aren't all they're cracked up to be either. some years ago I put $5000.00 of my own money into the care of a large well known investment group who promised reasonable returns. Five years later i took out $150.00...that's all I had left of it. Ever since then i've been a do it yourselfer when it comes to savings and retirement. So far so good...
Probably nearly 90% of the population is not able to effectively manage a privatized retirment program, i.e., privatize Social Security. The whole scam of the concept is that only money managers, investors, investment bankers, bankers, brokers, in other words, private industry, would gain and the public be damned. RRR or SS privatized in anyway would not benefit anyone except the money handlers. Overall, the more people who lose more or have less, the more likely there is a need for expensive government programs to maintain the economy. Private enterprise has proven short sighted in that area...they take all the money but leave too many people without then balk at supporting people to bolster the economy. They are ok, however, with government price supports and tax breaks. They don't realize that if the population has no money, nobody is aviailable to buy private enterprise products and services. Except government.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
The wage & retirement package which goes in being employed with a common carrier is the main reason people elect to do this work in any craft. I would say if there were no rr retirement that 99% of employees working would have gone on to other career fields--me included. If the retirenent were to be abolished in its current form then there would likely be a change in the pay scale. This would not become a good event. With all the gobbly goup which rr workers have to put up with, atleast the pay & retirement make it worth staying on for. If the class 1's pay scale were lower & on SS, no one out here would want to do the work. Its all about the money. People who work at jobs who have attractive wages & benefits most likely will be motivated to do their job well and best to their ability. This is my motivation as a 13 yr rr worker who has 13 more to go. The most happy day of any rr workers life is retirement day. That means so much to so many hopefully including me in summer, 2025.
Is Railroad Retirement connected to Social Security? If so, how is that configured? Has the federal govenment ever bailed out Railroad Retirement with general taxpayer funds?
BaltACD All you have to do is look at the financial mechanisms that have caused the banking and investment armageddon of the the current recession to understand just how little chance a individual investor has in safe guarding a retirement plan on their own. I view that the call for individual responsibility for retirement savings/investment as just another ploy by the financial whiz kids, that have designed financial instruments that virtually no one understands, to separate the non-whiz kids from their money to the sole benefit of the whiz kids.
All you have to do is look at the financial mechanisms that have caused the banking and investment armageddon of the the current recession to understand just how little chance a individual investor has in safe guarding a retirement plan on their own. I view that the call for individual responsibility for retirement savings/investment as just another ploy by the financial whiz kids, that have designed financial instruments that virtually no one understands, to separate the non-whiz kids from their money to the sole benefit of the whiz kids.
Gee Whiz...
Well you could but your money in a hole in the wall, but in 20 years, inflation will have turned that to dust anyway. A properly manged Mutual Fund is the way to go. It can be provided by an individual, an insurance company, an employer or a union. The OVERSIGHT of such funds needs to be tight, but I surely would NOT trust the government to do it well.
The Non-Whiz Kids, who THINK they can do better WILL eventually loose their money, but it is clear that Social Security is NOT a retirement fund.
ROAR
The Route of the Broadway Lion The Largest Subway Layout in North Dakota.
Here there be cats. LIONS with CAMERAS
The armageddon was caused by con artists who took advantage of people who didn't have the sense to follow their own investments. Many who keep it simple and invest intelligently were unaffected.
Ulrich Phoebe Vet: A very large portion of our society cannot manage their credit cards and checking accounts. Asking them to manage their retirement fund is begging for disaster. Expecting a 30 year old single mother with 3 children who works at a retail outlet in the mall to contribute any meaningful amount to a 401-k is living in a dream world. Perhaps the change that is required is to take the retirement system out of the hands of employers and just require employers to contribute a percentage of an employee's salary to an independent fund. (Sound familiar?) If you don't trust the government to handle it, it could be run by insurance companies. It is already done in the construction industry where retirement funds are managed by the unions. Still...if you can do it, it is better to manage it yourself as much as possible. Railroad people make enough..most could probably sock 5% or even 10% away per year if they really wanted to. Over 20 or 30 years with compounding interest factored in, that really adds up.. But I agree, its not for everyone.
Phoebe Vet: A very large portion of our society cannot manage their credit cards and checking accounts. Asking them to manage their retirement fund is begging for disaster. Expecting a 30 year old single mother with 3 children who works at a retail outlet in the mall to contribute any meaningful amount to a 401-k is living in a dream world. Perhaps the change that is required is to take the retirement system out of the hands of employers and just require employers to contribute a percentage of an employee's salary to an independent fund. (Sound familiar?) If you don't trust the government to handle it, it could be run by insurance companies. It is already done in the construction industry where retirement funds are managed by the unions.
A very large portion of our society cannot manage their credit cards and checking accounts. Asking them to manage their retirement fund is begging for disaster. Expecting a 30 year old single mother with 3 children who works at a retail outlet in the mall to contribute any meaningful amount to a 401-k is living in a dream world.
Perhaps the change that is required is to take the retirement system out of the hands of employers and just require employers to contribute a percentage of an employee's salary to an independent fund. (Sound familiar?) If you don't trust the government to handle it, it could be run by insurance companies. It is already done in the construction industry where retirement funds are managed by the unions.
Still...if you can do it, it is better to manage it yourself as much as possible. Railroad people make enough..most could probably sock 5% or even 10% away per year if they really wanted to. Over 20 or 30 years with compounding interest factored in, that really adds up..
But I agree, its not for everyone.
Never too old to have a happy childhood!
Bucyrus BaltACD: The 'behind the scenes' talk in the budget process gives the feeling that the politicos would like to take the resources of Railroad Retirement and fold it into Social Security and disburse to the retirees at the Social Security rate. Why would anyone let them take the resources of Railroad Retirement and fold it into SS? Wouldn't it be bad for the railroads and the employees?
BaltACD: The 'behind the scenes' talk in the budget process gives the feeling that the politicos would like to take the resources of Railroad Retirement and fold it into Social Security and disburse to the retirees at the Social Security rate.
The 'behind the scenes' talk in the budget process gives the feeling that the politicos would like to take the resources of Railroad Retirement and fold it into Social Security and disburse to the retirees at the Social Security rate.
Why would anyone let them take the resources of Railroad Retirement and fold it into SS? Wouldn't it be bad for the railroads and the employees?
Well that is politics, isn't it? The government gives and the government takes away, Blessed be the name of the Government.
Someone said that individuals would not protect their retirement funds, but would dive into them for short term needs. LION did the same thing when he was a kid. Guess what? The Government does it all of the time too.
AND, there is no social security "lockbox", it is ALL in the general fund. IF RR retirement was collected in a different way, and that it IS held in trust for the employees, this might be different. LION does not know, but him does know that the GOVERNMENT does not treat retirement funds properly (not just Social Security--but also public employee retirement funds: teachers etc.) and that money is NOT there, and really NEVER was there.
Local governments offered retirement packages in lieu of more money, but never set that money aside. If I were in a union I would demand better retirement that what the government was offering.
But all of this is a political quagmire that our discussion wants to avoid.
Bottom Line, you take care of your self, or you keep working until the Lord collects your ticket.
BTW: The LION *does* collect Social Security: $700/month. Health Insurance is $650/month. Enough Said. But then the LION does not have all that many years in the work place, what with him being in the Monastery the past 30 years. The monastery does have its own HWR fund, but that also is underfunded according to the Church's actuarial tables.
It is not so much that they cannot manage as it is that the system is not a guarantee to success in such small sums. Yes, the average person knows nothing about stocks, bonds, and fund management and we'd be in much deeper economic trouble if SS was not in effect. My fear is that private sector retirement investment would be good only for those to take the money and make money rather than for the investor. The behavior of our financial community...from local banker and stock broker to the billion dollar a minute monstors on Wall St...has not been conducive to keeping the populaton liquid enough to spend money on goods and services which are needed to maintain an economy but instead has been a guarantee of those managing money to take it. Railroad Retirement has been its own fiefdom from before the time of Social Security and as such has been a huge amount of cash the money mongers, er, managers, have always coveted. They got SS and want more. I hope in the long run that RRR survives on its own and does not get rolled into the General Fund of bankers and investors and their political allies.
Phoebe Vet A very large portion of our society cannot manage their credit cards and checking accounts. Asking them to manage their retirement fund is begging for disaster. Expecting a 30 year old single mother with 3 children who works at a retail outlet in the mall to contribute any meaningful amount to a 401-k is living in a dream world. Perhaps the change that is required is to take the retirement system out of the hands of employers and just require employers to contribute a percentage of an employee's salary to an independent fund. (Sound familiar?) If you don't trust the government to handle it, it could be run by insurance companies. It is already done in the construction industry where retirement funds are managed by the unions.
The Rand Paul budget proposal in the House has Railroad Retirement Tier I benefits being set to the same as Social Security. That is, the retire at 60 with 30 years would be gone. It would be the same as Social Security (65-67 years).
Paul says this would save "taxpayers" $2B per year. What it really would do is transfer money from Railroad Retirement to Social Security.
It's pretty obvious where labor would wind up on this, but I suspect RR mgt would be against it, too. It would leave their defined benefit pension plans underfunded. When you retire early, they typically will make up the "missing" railroad retirement until such time as it kicks in. Guys going at 60 with 30 years are not "early", but if they go at that age and the RR has to pay out the equivalent of RR for seven years....
What hasn't been mentioned is if they plan to mess with TIer II. If they would raise the age for that, the RRs would get to cut their portion of the payroll tax quite a bit. Currently, they pay something like 13%, but it's adjustable based on what's needed to keep the fund afloat.
The current railroad retirement rules are not all that old. It's been about 15 years since the current rules were put in place.
Another thought. Given the RRs have been hiring like mad in their management ranks lately, a change in retirement age could demoralize the whole lot of them. The current bubble of 50+ers would not like the prospect of 7 more years work and the the young ones would not like having to wait 7 more years for promotion slots to open up.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
To clarify one point, Railroad Retirement is NOT managed by the Social Security Administration, it is still a separate agency. There is a certain amount of overlap that has been addressed in various statutes, primarily aimed at workers who did not work long enough under Railroad Retirement to be vested in that system.
tree68 Bucyrus: Why would anyone let them take the resources of Railroad Retirement and fold it into SS? Wouldn't it be bad for the railroads and the employees? That's of little concern to someone trying to make a name for themselves. Railroaders, while numerous, are a fairly small group on the whole. Many people don't even think railroads are a viable form of transportation any more (witness the comment mentioned in another thread about how railroads don't haul anything any more - they just block crossings to make people late for whatever). There are those who feel that a group such as the railroaders, who have an established retirement system which provides decent benefits, must somehow be evil, and that we should all benefit from their foresight and planning by redistributing their savings. Hopefully there are advocates who are keeping an eye on things and who will intervene if such an action is attempted, but we should all know never to say never.
Bucyrus: Why would anyone let them take the resources of Railroad Retirement and fold it into SS? Wouldn't it be bad for the railroads and the employees?
That's of little concern to someone trying to make a name for themselves.
Railroaders, while numerous, are a fairly small group on the whole. Many people don't even think railroads are a viable form of transportation any more (witness the comment mentioned in another thread about how railroads don't haul anything any more - they just block crossings to make people late for whatever).
There are those who feel that a group such as the railroaders, who have an established retirement system which provides decent benefits, must somehow be evil, and that we should all benefit from their foresight and planning by redistributing their savings.
Hopefully there are advocates who are keeping an eye on things and who will intervene if such an action is attempted, but we should all know never to say never.
Not evil, just out of step with the times. Keep in mind that most people don't have employer retirement plans and therefore are obligated to manage their retirement for themselves. That's actually a good thing because then you're in control, you're looking after it, and you're not depending on someone else/an employer for your retirement.
"I hate this job but I can't quit because if I do I'll lose my pension".. where have we heard that before? Even if your employer does offer some kind of plan, pretend that it doesn't exist and save on your own. That way, when you retire and the employer plan is still in place for you then you're pleasantly surprised instead of bitterly disappointed.
Georgia Railroader Ulrich: They used to build locomotives in London. The plant was owned by a company that couldn't fail called GM. And then, once upon a time, GM sold their plant to another company, that in turn sold it to another company..that in turn valued their people so much they gave them a deal they couldn't refuse... $35/hr reduced to $16.50 an hour take it or leave it. If they can do THAT, I wouldn't count on any company retirement options either. Take matters into your own hands... the world is changing. This isn't even the same thing.
Ulrich: They used to build locomotives in London. The plant was owned by a company that couldn't fail called GM. And then, once upon a time, GM sold their plant to another company, that in turn sold it to another company..that in turn valued their people so much they gave them a deal they couldn't refuse... $35/hr reduced to $16.50 an hour take it or leave it. If they can do THAT, I wouldn't count on any company retirement options either. Take matters into your own hands... the world is changing.
They used to build locomotives in London. The plant was owned by a company that couldn't fail called GM. And then, once upon a time, GM sold their plant to another company, that in turn sold it to another company..that in turn valued their people so much they gave them a deal they couldn't refuse... $35/hr reduced to $16.50 an hour take it or leave it. If they can do THAT, I wouldn't count on any company retirement options either. Take matters into your own hands... the world is changing.
This isn't even the same thing.
I know that. I brought that up to show how much can change over time. If pay can be halved then what else can be halved or eliminated. That was my point.
BucyrusWhy would anyone let them take the resources of Railroad Retirement and fold it into SS? Wouldn't it be bad for the railroads and the employees?
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
That would be where this thread turns political and I'm not going there. That's not why Zug started this thread, and besides the mods would shut it down with the quickness.
Would it be bad? Yes, at least for those of us who pay our hard earned money into it. Those who are already retired before this proposed robbery takes place should be grandfathered in. Those who retire after could be in for a rude awakening.
Ulrich They used to build locomotives in London. The plant was owned by a company that couldn't fail called GM. And then, once upon a time, GM sold their plant to another company, that in turn sold it to another company..that in turn valued their people so much they gave them a deal they couldn't refuse... $35/hr reduced to $16.50 an hour take it or leave it. If they can do THAT, I wouldn't count on any company retirement options either. Take matters into your own hands... the world is changing.
BaltACD The 'behind the scenes' talk in the budget process gives the feeling that the politicos would like to take the resources of Railroad Retirement and fold it into Social Security and disburse to the retirees at the Social Security rate.
zugmann BaltACD: The 'behind the scenes' talk in the budget process gives the feeling that the politicos would like to take the resources of Railroad Retirement and fold it into Social Security and disburse to the retirees at the Social Security rate. And if that was done, would we get a refund from all we paid above and beyond social security, or would we get a "sorry - sucks to be you" letter? And even the brand new guys that hire on are thinking about retirement. Whether they'll ever see it or not, but to totally trash the system in the foreseeable future? It's a well-known fact that many are retiring in the next 5-10 years (in all RR service, not just T&E), Even with the RR retirement, they are having trouble finding the next generation, so to speak. But without? More questions than answers.
And if that was done, would we get a refund from all we paid above and beyond social security, or would we get a "sorry - sucks to be you" letter?
And even the brand new guys that hire on are thinking about retirement. Whether they'll ever see it or not, but to totally trash the system in the foreseeable future? It's a well-known fact that many are retiring in the next 5-10 years (in all RR service, not just T&E), Even with the RR retirement, they are having trouble finding the next generation, so to speak. But without?
More questions than answers.
Get a refund, I doubt it. From what I am reading and hearing this is a real issue though. Our retirement could very well be in danger. Without talking about it any further and getting *** off about those that want to do this to us I will say that I'm not sure what I would do. It boils my blood. I have nearly 10 years paid into RRR, I enjoy my job, I'm not qualified to do much else, so I just dont know.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
henry6 First, look at history. RRR was a benefit of railroaders before Social Security. Sometime in the 90's I think it was, it became administered by SS. I don't think there is too much to worry about having people leave or not sign into the industry if there are any changes. It would probably become part of SS albeit modified RRR or modified SS.
First, look at history. RRR was a benefit of railroaders before Social Security. Sometime in the 90's I think it was, it became administered by SS. I don't think there is too much to worry about having people leave or not sign into the industry if there are any changes. It would probably become part of SS albeit modified RRR or modified SS.
Money paid into a retirement fund for the benefit of you is part of your compensation during your period of employment. The retirement fund belongs to the employees.
If your 50 year old neighbor has a 401-k as his sole source of retirement income but has lost his job and the bank is threatening to repossess his house, what do you suppose the chances are that he will look at that money and say "No, that is for my retirement, I can't touch it yet"? If he has a $150K hospital bill will it be lost in the collection process or bankruptcy? How many people will use it as collateral on a loan?
If he does clean it out to solve his short tern crisis, what will he do for income when he retires?
Providing your own retirement plan looks good on paper, but the simple fact is a large percentage of the population will be unable or unwilling to manage it until it is needed. If the fund is your sole source of retirement income, many people will outlive the fund.
Defined benefit retirement systems are essential to the country's fiscal strength.
Then you're ahead of the game. Take matters into your own hands and save for your own retirement.
Well, I don't figure on there being a retirement. I'm not that naive.
But railroad retirement is used as a major recruitment tool.
zugmann Would people stick around in this industry? Note: this is not political, just a what-if. If someone makes this political and gets it deleted, may a thousand scorpions crawl up that someone's pants.
Would people stick around in this industry?
Note: this is not political, just a what-if. If someone makes this political and gets it deleted, may a thousand scorpions crawl up that someone's pants.
I'd say the answer would depend on what other options you have available and how old you are. But if you're fairly young..say under 40 then I wouldn't count on anyone taking care of your retirement for you. Start saving for that yourself, that way, if it turns out that the world changes by the time your 65 then at least you have your own little nest egg to rely on. I know a few people who thought they had it made in the shade thanks to a generous employer retirement plan when pooof... the world changed and they wake up at age 55 with nothing.
But I sure hope the answer to your question is YES for most people. I would hate to think that anyone would just work at a job they hated because the retirement bennies are good. Personally I'd rather work at something I enjoy until I drop dead...but that's just me.
I guess I don't understand what you would lose if RR retirement ended and you were paid back for what you had put into it.
Is there some discussion about ending RR retirement?
I have thought about all of these questions regarding social security, but I don't know how RR retirement works. I know that if you quit, you abandon your previous witholding with no benefit coming back to you.
Our community is FREE to join. To participate you must either login or register for an account.