55 y.o gets cut 20% in pay if company moves from Tradional Pension to 401k

[papau]

COMPENSATING FOR PENSION SHORTFALLS
Here's a general estimate of how much more you need to sock away as a percent of before-tax pay if you are moved out of a traditional pension.
Your age Men Women
.. 35...... 5.7%.. 6.0%
.. 45...... 9.5%.. 10.1%
.. 50..... 12.1%.. 12.9%
.. 55..... 15.3%.. 16.2%
.. 60..... 18.5%.. 19.6%
*Assumes a worker joins a company at age 30, gets 3% annual salary increases and retires at 65. The percent-of-pay estimates include both worker and employer contributions combined.
Source: EBRI estimates http://www.ebri.org/

http://money.cnn.com/2006/01/11/retirement/pension_change_savings/index.htm

Pension Peril: Securing income for life
How to make up for income shortfalls if your company freezes your pension.
By Jeanne Sahadi, CNNMoney.com senior writer
January 11, 2006: 1:10 PM EST


NEW YORK (CNNMoney.com) – Reliable income for life. Most people want it, but fewer and fewer workers can count on it. A number of big-name companies – IBM (Research) being the latest example -- have frozen their defined-benefit pension plans and are moving all workers into a 401(k).

Workers in the plan will still receive a pension when they retire, but only the benefits they accrued up to the date of the pension freeze. Since the most significant accruals of pension benefits typically occur when workers hit their late 40s and 50s after a long tenure at a company, a freeze can mean a significant reduction in expected retirement income for someone at the peak of their career.<snip>

How much more? Generally speaking, for workers in their mid-40s through early 60s, they should figure an additional 10 percent to 20 percent of their before-tax pay every year until retirement, according to estimates from Watson Wyatt and the Employee Benefit Research Institute.

In a typical pension plan, a man making $70,000 at 55 might have accrued a $16,990 annual pension assuming 25 years of service, said EBRI fellow Jack VanDerhei. By age 65 he would have an accrued pension of $31,044 a year, or another $14,054.

To make up for that $14,054 if his plan freezes when he's 55, he would need to invest another 15.3 percent of his income for the next 10 years to have enough to buy an annuity that could provide him with the same amount in retirement.<snip>

[fasttense]

1. But the economy is great. n/t

[raccoon]

2. Yeah, that's what * is saying..we know that that means.

Believe the opposite!