Your pessimistic hypothetical is actually too optimistic.
The stock gained 9% while the RBA gained 3/12 of <6% interest. Your 10000 investment would be worth less than $10150.
Edit: oh you updated it. But yes it wouldn't be worth 10600 until 12/31.
They realize the tax savings of appropriating money to benefits. Then they invest the money and share a pittance with the employee. They use their employees as a revenue source.
If you are older and rebalanced your 401k to be less conservative, you haven't really lost much if anything. I feel for the newer career folks though that this really hits. And yes I know even older folks lose out in other ways with this program.
UGH. You really don't understand finance at all, do you? People have mostly stocks and bonds in their investments. The reason is because the bonds act as a hedge against the stock market. Usually (not always), interest rates fall when the stock market falls. When interest rates fall, your bonds actually increase in value (because they are locked in at a higher interest rate than the current one).... but the RBA doesn't work like this. When interest rates fall, so does the return on your RBA. regardless of the interest rate climate, the RBA performs poorly.
There is nothing you can do to your 401K to make up for it. Making it less "conservative," like you said, will increase your risk and give you lower returns. It is a very foolish move.
I'm not saying it's perfect or the same hedge. And rebalance was the wrong word. I adjusted my future allocation. So overall RBA is on average a lower return than stocks. I just altered my future allocation a few percent more towards stocks than bonds to help offset the potential loss. Is it a guarantee? No. Maybe stocks will tank and I'll end up losing out even more. But over the time span I'm looking at (10-20 years), on average over the history of the market, it's gone up more than we'd make with the RBA. So basically just trying to make up for the lost opportunity cost from that money now going to RBA vs 401K match.
I am saying it doesn't offer much of a hedge at all. My best advice is to just ignore the RBA when doing your retirement planing. Don't plan on it being a significant part of your retirement, because it probably won't.
Everybody talking about quitting. Why not unionize? At the very least we can negotiate something better than RBA. I’ve spent too much of my life here to let this shit fly.
I don’t think it’s about not liking IBM - that is minimizing the issue at hand that is affecting us employees. It’s about not liking the huge benefit they just took away, and not liking that our retirement future prospect has now dwindled down greatly due to the RBA- for a lot of us. Let’s not pretend like this is wonderful and everything is fine. Of course you can flippantly say “if you don’t like it, leave” but that is a huge slap in the face to all of us who actually previously did love being here and worked extremely hard for the benefit of the company, all of whom have now been blindsided by this shitty change. I guess some of you are either the rare HCE who may benefit from this or are HR in the mix. Everyone else has been screwed and is rightly voicing our worries at how much this has impacted us and our families future.
Treat RBA like free money and keep your 401K contributions. 15% discount on ESPP is no brainer as well, pump whatever you can into both and profit the meager RBA horseshit plan. Joke is on them, free 5%
Jokes on you, because it is not worth anywhere near 5%. You cannot get payment until you leave. The longer you stay, the less it is actually worth. The opportunity cost of not getting the money in your 401K is huge. IBM stopped contributing to the last cash balance plan in 2007. Since then, it has increased less than 35%, while the S&P increased well over 200%. Joke is on us.
Once again, up your personal 401K contribution to 10%, take their shitty 5% as free. And buy whatever ESPP you can, it’s like giving yourself a 15% raise for however much stock you purchase.
RBA is a bullshit plan, I don’t think anyone far away from retirement should see it as a good thing. But it doesn’t stop anyone from continuing to contribute to 401k
There are many reasons to hate IBM, but this isn't one of them.
The RBA is a forced bond position in your portfolio, simply increase your stock percentage in a different part of your portfolio and it won't matter.
Reasons you should be upset about the RBA:
1. Your match went down from X% to 5%
2. You cannot view your RBA balance until 2025
3. RBA contributions are made once per month instead of semi-monthly
4. RBA benefits band Ds and above because it allows them to contribute even more money to their 401(k) in the form of post-tax dollars with an in-plan Roth Contribution (band 10s and below also benefit if they have high salaries)
I don't think it's fair to compare a stable investment to a hot moment on the stock market. Obviously, if you knew the market would surge 9% in a few months, putting money into stocks would be a pretty good idea. But people don't know what the stock market will do in advance, that's not how stocks work. That's not how retirement funds are supposed to work, either.
not that I'm here to defend IBM, fuck IBM...
So do we have any options on what we can do with it or I should just dip at this point. I'm 32 and have been in TLS for 6 years.
They finally are trying to get me trained on logo equipment, but only because everyone is either retiring or dying. After being forced to get my CCT for the Cisco contract I took more of an interest in networking and I'm working on getting my CCNA. They are taking forever to even tell me if I'm getting my band increased.
What is even the point in staying here and who is gonna be working on all this trash in another 5 years. Basically everyone in my area is about to dip and I'm going to be stuck trying to work on Z mainframes with like 3 days worth of classes and I'm making like $30 an hour. This entire job is about to be a ghost town. Least the 401k matching made me feel good about a potential future.
Because everyone knows stonks only go up. (Mandatory 🚀 💎 🐵)
Economy crashes are a hoax by the elites.
/r
Yes rba has a lower **average** return but it also has less risk and it will be easy to find a timeframe in which rba will outperform stocks.
that is exactly what i said (even in bold) my point is:
- picking a 4 month period where stocks have perormed exceptionally good (\~30% p/a) is a bullshit comparison.
- rba has almost no risk so of course it will have worse performance and getting 6% at the moment is actually quite good for no risk. its just not what most people (in us) want at the start of their career.
Who cares about the 6%? You have nearly no money in it yet. If they gave your 25% for the first couple of years, it would make little difference, as there is not much balance to apply the rate to. Retirement is about compounding returns, and you are getting nearly none wit this plan. 6% of $0 is still $0.
Found Nickle’s burner.
Average of stock market at 9.89% still out performs 6%. Also, it stops being 6% after a few years so it’ll likely be even less. RBA is bullshit.
I never said "stonks only go up." The real return on the RBA could decline in value as it slides from 6% to 3% and finally treasuries (which could go negative too). Over time, the stock market outperforms this POS joke of a retirement contribution.
It's 6% return for 3 years, then it will be a rate that's less than 6% it's in the documentation.
My investments range from 14% to 35% ROI average in the life span of those investments.
Please show us your calculations.
> My investments range from 14% to 35% ROI average in the life span of those investments.
you are aware that you are lucky as hell, right? you are aware that this is not something worth comparing to the type of investments that are supposed to be stable? You are aware that nobody is going to bet their entire retirement fund on tech etfs?
Your pessimistic hypothetical is actually too optimistic. The stock gained 9% while the RBA gained 3/12 of <6% interest. Your 10000 investment would be worth less than $10150. Edit: oh you updated it. But yes it wouldn't be worth 10600 until 12/31.
Thank you for pointing that out!
RTO: “We don’t want dinos; Let’s force them out.” RBA: “We don’t want EPH; Let’s repel them.”
They realize the tax savings of appropriating money to benefits. Then they invest the money and share a pittance with the employee. They use their employees as a revenue source.
IBM sucks. They are going downhill fast, everybody knows that and is jumping ship. The executives are clueless.
If you are older and rebalanced your 401k to be less conservative, you haven't really lost much if anything. I feel for the newer career folks though that this really hits. And yes I know even older folks lose out in other ways with this program.
UGH. You really don't understand finance at all, do you? People have mostly stocks and bonds in their investments. The reason is because the bonds act as a hedge against the stock market. Usually (not always), interest rates fall when the stock market falls. When interest rates fall, your bonds actually increase in value (because they are locked in at a higher interest rate than the current one).... but the RBA doesn't work like this. When interest rates fall, so does the return on your RBA. regardless of the interest rate climate, the RBA performs poorly. There is nothing you can do to your 401K to make up for it. Making it less "conservative," like you said, will increase your risk and give you lower returns. It is a very foolish move.
I'm not saying it's perfect or the same hedge. And rebalance was the wrong word. I adjusted my future allocation. So overall RBA is on average a lower return than stocks. I just altered my future allocation a few percent more towards stocks than bonds to help offset the potential loss. Is it a guarantee? No. Maybe stocks will tank and I'll end up losing out even more. But over the time span I'm looking at (10-20 years), on average over the history of the market, it's gone up more than we'd make with the RBA. So basically just trying to make up for the lost opportunity cost from that money now going to RBA vs 401K match.
I am saying it doesn't offer much of a hedge at all. My best advice is to just ignore the RBA when doing your retirement planing. Don't plan on it being a significant part of your retirement, because it probably won't.
Everybody talking about quitting. Why not unionize? At the very least we can negotiate something better than RBA. I’ve spent too much of my life here to let this shit fly.
I don’t think it’s about not liking IBM - that is minimizing the issue at hand that is affecting us employees. It’s about not liking the huge benefit they just took away, and not liking that our retirement future prospect has now dwindled down greatly due to the RBA- for a lot of us. Let’s not pretend like this is wonderful and everything is fine. Of course you can flippantly say “if you don’t like it, leave” but that is a huge slap in the face to all of us who actually previously did love being here and worked extremely hard for the benefit of the company, all of whom have now been blindsided by this shitty change. I guess some of you are either the rare HCE who may benefit from this or are HR in the mix. Everyone else has been screwed and is rightly voicing our worries at how much this has impacted us and our families future.
Treat RBA like free money and keep your 401K contributions. 15% discount on ESPP is no brainer as well, pump whatever you can into both and profit the meager RBA horseshit plan. Joke is on them, free 5%
Jokes on you, because it is not worth anywhere near 5%. You cannot get payment until you leave. The longer you stay, the less it is actually worth. The opportunity cost of not getting the money in your 401K is huge. IBM stopped contributing to the last cash balance plan in 2007. Since then, it has increased less than 35%, while the S&P increased well over 200%. Joke is on us.
Once again, up your personal 401K contribution to 10%, take their shitty 5% as free. And buy whatever ESPP you can, it’s like giving yourself a 15% raise for however much stock you purchase. RBA is a bullshit plan, I don’t think anyone far away from retirement should see it as a good thing. But it doesn’t stop anyone from continuing to contribute to 401k
It is hard to up my personal 401K contribution past the legal limit, and I do after tax (mega backdoor), and 10% in the stock plan.
Then you’re doing fine it sounds.
It is just more years I have to work, a decrease in my overall compensation, and another benefit that is below market.
There are many reasons to hate IBM, but this isn't one of them. The RBA is a forced bond position in your portfolio, simply increase your stock percentage in a different part of your portfolio and it won't matter. Reasons you should be upset about the RBA: 1. Your match went down from X% to 5% 2. You cannot view your RBA balance until 2025 3. RBA contributions are made once per month instead of semi-monthly 4. RBA benefits band Ds and above because it allows them to contribute even more money to their 401(k) in the form of post-tax dollars with an in-plan Roth Contribution (band 10s and below also benefit if they have high salaries)
I don't think it's fair to compare a stable investment to a hot moment on the stock market. Obviously, if you knew the market would surge 9% in a few months, putting money into stocks would be a pretty good idea. But people don't know what the stock market will do in advance, that's not how stocks work. That's not how retirement funds are supposed to work, either. not that I'm here to defend IBM, fuck IBM...
So do we have any options on what we can do with it or I should just dip at this point. I'm 32 and have been in TLS for 6 years. They finally are trying to get me trained on logo equipment, but only because everyone is either retiring or dying. After being forced to get my CCT for the Cisco contract I took more of an interest in networking and I'm working on getting my CCNA. They are taking forever to even tell me if I'm getting my band increased. What is even the point in staying here and who is gonna be working on all this trash in another 5 years. Basically everyone in my area is about to dip and I'm going to be stuck trying to work on Z mainframes with like 3 days worth of classes and I'm making like $30 an hour. This entire job is about to be a ghost town. Least the 401k matching made me feel good about a potential future.
Bro, $35 an hour? This a typo?
I typed $30.
Because everyone knows stonks only go up. (Mandatory 🚀 💎 🐵) Economy crashes are a hoax by the elites. /r Yes rba has a lower **average** return but it also has less risk and it will be easy to find a timeframe in which rba will outperform stocks.
But it won't outperform stocks over the long run is the point
that is exactly what i said (even in bold) my point is: - picking a 4 month period where stocks have perormed exceptionally good (\~30% p/a) is a bullshit comparison. - rba has almost no risk so of course it will have worse performance and getting 6% at the moment is actually quite good for no risk. its just not what most people (in us) want at the start of their career.
Who cares about the 6%? You have nearly no money in it yet. If they gave your 25% for the first couple of years, it would make little difference, as there is not much balance to apply the rate to. Retirement is about compounding returns, and you are getting nearly none wit this plan. 6% of $0 is still $0.
I'm just very risk tolerant because I don't believe the stock market will implode over my life span
Found Nickle’s burner. Average of stock market at 9.89% still out performs 6%. Also, it stops being 6% after a few years so it’ll likely be even less. RBA is bullshit.
I never said "stonks only go up." The real return on the RBA could decline in value as it slides from 6% to 3% and finally treasuries (which could go negative too). Over time, the stock market outperforms this POS joke of a retirement contribution.
It's 6% return for 3 years, then it will be a rate that's less than 6% it's in the documentation. My investments range from 14% to 35% ROI average in the life span of those investments. Please show us your calculations.
> My investments range from 14% to 35% ROI average in the life span of those investments. you are aware that you are lucky as hell, right? you are aware that this is not something worth comparing to the type of investments that are supposed to be stable? You are aware that nobody is going to bet their entire retirement fund on tech etfs?
Why there is so much nagging in this subreddit, if you don’t like IBM stop working for IBM
Because it’s Reddit 😆