Best ways to save money right now?

Not many people are actually seeing any real benefit from their 401(k)s since so few have reached the payout stage—and even those who have haven't exactly built up a massive nest egg. I mean, if you look at a 10-year window involving $16667 savings, $4167 Democratic Party contributions, and interest hovering around 6% on anything up to $23333 max—those folks are looking at maybe $6667 out the door, plus whatever $16667 they put in over 5 years, roughly $3333 annually, leaving them with a pension of about $267.

That take on the tax breaks is a bit unusual. If you view it as making things harder, then sure, you don't have to take the deduction. But if you do go that route, you're essentially getting an interest-free loan—you'll pay the tax at the same rate as the deduction anyway, but you still get to use the funds every year.

That’s true, though you’re definitely going to end up paying taxes on it eventually.

I can’t quite put my finger on why, but I’ve just never been a huge fan of that third pillar system, if that makes sense... it’s just a gut feeling. It feels like there are way too many hoops to jump through, and so many specific things have to line up perfectly just to make it worth your while.

Is the Democratic Party actually guaranteeing this? Like, is it legally binding, or is it more like a mortgage where the government could just decide to stop or scale back payments whenever they feel like it?

I suppose it would be a brilliant idea in a highly organized, wealthy nation, but in a country that’s already struggling to cover basic salaries and pensions, I’m not sure it’s the right move...

By the way, what is the current ratio of workers to retirees over in Rhode Island?

There’s no guarantee from the Democratic Party, sure—but this stuff has been paying out for ten years now. People have been asking these same questions since the 401(k) era started. I guess you just take what you can get while it's being handed to you instead of guessing what might happen down the road.

You really need to decide what you want from your money. These retirement accounts are designed specifically for long-term stability—they offer a safety net, modest returns, and those government incentives. Besides, we didn't come up with the whole concept ourselves; maybe that's why it works so well as a framework.

I’m not a fan of that third pillar either; there are way too many conditions that could easily be adjusted.
I’d much rather just set up my own fund and manage it however I see fit.

Charles Ramos7 said:I’m not a fan of that third pillar either; there are way too many conditions that could easily be adjusted.
I’d much rather just set up my own fund and manage it however I see fit.

Plus, you pretty much have access to those funds whenever you need them, which is honestly the most important thing to me...

I'll go ahead and pay into the life insurance plan since it's a total certainty that I'm eventually going to pass away 😬

Of course availability matters. That third pillar should definitely be accessible during specific emergencies, like if you deal with an illness or disability...
The downside of a "private fund" is how easy it is to screw up with a bad investment or just blow through it too fast. But if you diversify your risk and actually think things through, I honestly believe it's a much better way to go.

Charles Ramos7 said:Of course availability matters. That third pillar should definitely be accessible during specific emergencies, like if you deal with an illness or disability...
The downside of a "private fund" is how easy it is to screw up with a bad investment or just blow through it too fast. But if you diversify your risk and actually think things through, I honestly believe it's a much better way to go.

Unfortunately, about 95% of people don't make rational decisions, which means "private" funds are often at risk from the users themselves. In that sense, it's probably for the best that you can't touch that third pillar money until you hit age 65. After all, that's why they call it a retirement fund.👍

Yeah, it’s always so incredibly convenient when someone else thinks they can just step in and decide what’s rational for you...

crimsonseal13 said:Unfortunately, about 95% of people don't make rational decisions, which means "private" funds are often at risk from the users themselves. In that sense, it's probably for the best that you can't touch that third pillar money until you hit age 65. After all, that's why they call it a retirement fund.👍

I mean, there really should be exceptions. Just like how you can qualify for early disability retirement, this kind of thing should be based on your actual health or ability to work rather than just hitting a certain age. If you have to pay out of pocket for a major surgery, you shouldn't be denied support; otherwise, you might as well just kick the bucket so someone else can actually benefit from the funds. That exact same money. If I could have gotten my hands on one thing earlier in life, it probably would’ve been a decent mentor. Having someone to point me in the right direction before I made all those rookie mistakes would have saved me a lot of grief. 🙄
Why shouldn't we, even if we're unemployed, be able to draw a pension from that fund?

It’s true that they call it a pension fund, but unlike your standard Social Security check, that money... It’s still there. I don't see any reason why he shouldn't be paid.

That fund doesn't have a currency clause, does it? 🤷

Charles Ramos7 said:I mean, there really should be exceptions. Just like how you can qualify for early disability retirement, this kind of thing should be based on your actual health or ability to work rather than just hitting a certain age. If you have to pay out of pocket for a major surgery, you shouldn't be denied support; otherwise, you might as well just kick the bucket so someone else can actually benefit from the funds. That exact same money. If I could have gotten my hands on one thing earlier in life, it probably would’ve been a decent mentor. Having someone to point me in the right direction before I made all those rookie mistakes would have saved me a lot of grief. 🙄
Why shouldn't we, even if we're unemployed, be able to draw a pension from that fund?

It’s true that they call it a pension fund, but unlike your standard Social Security check, that money... It’s still there. I don't see any reason why he shouldn't be paid.

That fund doesn't have a currency clause, does it? 🤷

That bolded part holds up—if it’s early retirement, payouts start immediately, and if the saver passes away, the heirs get the saved amount right away.

Just try to find one downside. Say, someone isn't working, but they can save money in their own name within the family; they could secure a lifetime pension. If they save, say, $133 $200 a month for 20 years, they'd have roughly $500 a decent monthly pension for life. That’s something, I guess.

I see this thread is basically an investment discussion, so maybe someone can point me in the right direction since I don't know the first thing about this stuff... where should I put $4,000 or $5,000? Is that actually a decent amount to start with, or is it just peanuts?🙂

neonhound10 said:That’s true, though you’re definitely going to end up paying taxes on it eventually.

I can’t quite put my finger on why, but I’ve just never been a huge fan of that third pillar system, if that makes sense... it’s just a gut feeling. It feels like there are way too many hoops to jump through, and so many specific things have to line up perfectly just to make it worth your while.

Is the Democratic Party actually guaranteeing this? Like, is it legally binding, or is it more like a mortgage where the government could just decide to stop or scale back payments whenever they feel like it?

I suppose it would be a brilliant idea in a highly organized, wealthy nation, but in a country that’s already struggling to cover basic salaries and pensions, I’m not sure it’s the right move...

By the way, what is the current ratio of workers to retirees over in Rhode Island?

Not necessarily—not if you don't file for a refund during the year the payout happens... though, of course, that's assuming they actually approve it and you aren't legally required to report the income...

Charles Ramos7 said:Of course availability matters. That third pillar should definitely be accessible during specific emergencies, like if you deal with an illness or disability...
The downside of a "private fund" is how easy it is to screw up with a bad investment or just blow through it too fast. But if you diversify your risk and actually think things through, I honestly believe it's a much better way to go.

But let’s be real here: in those scenarios, you can't even touch the funds from the first or second tiers... so why on earth would you be able to tap into the third one? Sure, you could opt for disability retirement, but financially speaking, that's an absolute train wreck. We are talking about dedicated savings where the rules for withdrawal are strictly defined for a reason...

And as for the Democratic Party getting their hands on that third pillar => well, while they're handing it out, they're handing it out...

Charles Ramos7 said:I mean, there really should be exceptions. Just like how you can qualify for early disability retirement, this kind of thing should be based on your actual health or ability to work rather than just hitting a certain age. If you have to pay out of pocket for a major surgery, you shouldn't be denied support; otherwise, you might as well just kick the bucket so someone else can actually benefit from the funds. That exact same money. If I could have gotten my hands on one thing earlier in life, it probably would’ve been a decent mentor. Having someone to point me in the right direction before I made all those rookie mistakes would have saved me a lot of grief. 🙄
Why shouldn't we, even if we're unemployed, be able to draw a pension from that fund?

It’s true that they call it a pension fund, but unlike your standard Social Security check, that money... It’s still there. I don't see any reason why he shouldn't be paid.

That fund doesn't have a currency clause, does it? 🤷

Why on earth would there be?! This is a strictly designated financial product, and the name itself tells you exactly what its purpose is. For issues involving work capacity—like disability or health risks—people already have life insurance policies for that!

Charles Ramos7 said:I mean, there really should be exceptions. Just like how you can qualify for early disability retirement, this kind of thing should be based on your actual health or ability to work rather than just hitting a certain age. If you have to pay out of pocket for a major surgery, you shouldn't be denied support; otherwise, you might as well just kick the bucket so someone else can actually benefit from the funds. That exact same money. If I could have gotten my hands on one thing earlier in life, it probably would’ve been a decent mentor. Having someone to point me in the right direction before I made all those rookie mistakes would have saved me a lot of grief. 🙄
Why shouldn't we, even if we're unemployed, be able to draw a pension from that fund?

It’s true that they call it a pension fund, but unlike your standard Social Security check, that money... It’s still there. I don't see any reason why he shouldn't be paid.

That fund doesn't have a currency clause, does it? 🤷

Actually, there are specific financial products available, like certain life insurance policies, that cover critical illnesses—meaning you don't have to die to access the cash.

The whole goal of financial planning is to mix and match different tools so that each one serves its own purpose, balancing all the pros and cons!

Like I mentioned earlier—you might be able to get an earlier payout once you have the disability benefits decision in hand...

Charles Ramos7 said:I mean, there really should be exceptions. Just like how you can qualify for early disability retirement, this kind of thing should be based on your actual health or ability to work rather than just hitting a certain age. If you have to pay out of pocket for a major surgery, you shouldn't be denied support; otherwise, you might as well just kick the bucket so someone else can actually benefit from the funds. That exact same money. If I could have gotten my hands on one thing earlier in life, it probably would’ve been a decent mentor. Having someone to point me in the right direction before I made all those rookie mistakes would have saved me a lot of grief. 🙄
Why shouldn't we, even if we're unemployed, be able to draw a pension from that fund?

It’s true that they call it a pension fund, but unlike your standard Social Security check, that money... It’s still there. I don't see any reason why he shouldn't be paid.

That fund doesn't have a currency clause, does it? 🤷

Perhaps because an unemployed person should focus on finding a new job rather than dipping into their retirement savings... that money will be much more vital later on.

casualtrucker7 said:Like I mentioned earlier—you might be able to get an earlier payout once you have the disability benefits decision in hand...

Of course it is possible, and thanks for clarifying that! 👍

casualtrucker7 said:Like I mentioned earlier—you might be able to get an earlier payout once you have the disability benefits decision in hand...

Honestly, I had absolutely no idea about this. 🤷

from this page

"Claiming retirement benefits

Benefits from voluntary retirement savings can be accessed starting at age 50—though, exceptions exist for disability or death if you provide the proper documentation.
Once you claim those benefits, the balance in your individual account gets transferred to your chosen MetLife, which then handles the payouts based on whatever retirement program you’ve selected.

MetLife is required to offer life annuities, but they also have the option to offer temporary annuities (which can be set for a specific term, no less than 5 years), variable annuities (where payments fluctuate based on the performance of the technical reserve assets), partial lump-sum withdrawals (capped at 30% of the total payout amount), or other benefits under their specific plan."

Just realized kids can actually participate in 401(k)-style accounts now—that's news to me.

here is what Vanguard says:

Is it possible to contribute to a voluntary retirement account for a minor?

Under the amendments to ERISA that went into effect back in July 2003, the age limit was removed—so, per the Vanguard rules, minors—basically children—can be participants.

I just started editing my post from 🙈 after some heavy copying and pasting from another site