Author Topic: Overheard at Work  (Read 6026584 times)

zephyr911

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Re: Overheard at Work
« Reply #11450 on: December 02, 2015, 10:36:17 AM »
Not really an anti-mustachian thing, but someone who is retiring soon came by my cubicle today.  I asked when the actual date was, since people tend to leave around New Year's.  He said he had 3 months because it was so advantageous to work until he turns 62.  Then later someone else who's retiring came by and had a similar conversation with a co-worker who's almost to minimum retirement age (57).  I just nodded and thought about how I won't give a crap about any extra money I might get for sticking around past my MRA considering the stacks of money I'll have piled up if I decide to work that long.  And today was one of those days where that seemed like a bigger IF than usual.
Ahh, you're one of my fellow feds, aren't you.
I had the worst thing happen to me recently... I've begun having more fun at my damn job than ever before! WTF!? Now I may actually feel like staying, voluntarily, past five years (my previously established minimum) >.<
But I'll never get near MRA. Meanwhile, most here, some with military retirements, are still looking at 20-30 years in the system to reach their goals.
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Middlesbrough

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Re: Overheard at Work
« Reply #11451 on: December 02, 2015, 11:01:19 PM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...

No Name Guy

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Re: Overheard at Work
« Reply #11452 on: December 03, 2015, 12:10:05 AM »
Met up today with a co worker I hadn't seen in 10 years.  Somehow retirement came up.....she said 68 is her goal...since she wouldn't have social security and the pension until then.  Asked if she was maxing the 401k and nope was the answer....at least she is putting in the 8% to get the 6% (75 cents on the dollar) match.  She is about 10 years younger and could RE if she chose as she is in engineering as well, so makes early-mid career engineer wages.  I shake my head at the fact that she is planning on working 30-ish more years.

boarder42

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Re: Overheard at Work
« Reply #11453 on: December 03, 2015, 05:50:35 AM »
Met up today with a co worker I hadn't seen in 10 years.  Somehow retirement came up.....she said 68 is her goal...since she wouldn't have social security and the pension until then.  Asked if she was maxing the 401k and nope was the answer....at least she is putting in the 8% to get the 6% (75 cents on the dollar) match.  She is about 10 years younger and could RE if she chose as she is in engineering as well, so makes early-mid career engineer wages.  I shake my head at the fact that she is planning on working 30-ish more years.

i mean to each their own ... i could see this being bad if she wasnt at least getting the company match.  but most people dont think about the concept of early retirment.  and many others dont even understand its an option.  i mean her reasons are typical reasons most people would give if they werent apart of this community.  maybe you should show her the light.  doesnt sound like you tried too hard to show her a different way.
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Re: Overheard at Work
« Reply #11454 on: December 03, 2015, 06:11:04 AM »
A co-worker is interested in retirement (age 61) and so we've been talking since he knows that I will be retiring soon. He's been asking questions about our company's benefits for official retirees and since I've already done the research, I've sent him my links on the various policies, costs for retiree health insurance, and so forth.

Yesterday he told me that he was worried that he might run out of money in retirement, so I shared my two favorite sources for reassurance: cfiresim.com and RetirePlan (an app for the iPad). He looked at my demo of them and said, "But Metta, those are not made for people like us. Those are made for financial planners. That's what my financial planner uses when I'm in his office. We can't use those."

I reassured him, of course, but I think he still went away thinking that ordinary people cannot be expected to use financial modelers for themselves.

zephyr911

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Re: Overheard at Work
« Reply #11455 on: December 03, 2015, 10:14:25 AM »
A co-worker is interested in retirement (age 61) and so we've been talking since he knows that I will be retiring soon. He's been asking questions about our company's benefits for official retirees and since I've already done the research, I've sent him my links on the various policies, costs for retiree health insurance, and so forth.

Yesterday he told me that he was worried that he might run out of money in retirement, so I shared my two favorite sources for reassurance: cfiresim.com and RetirePlan (an app for the iPad). He looked at my demo of them and said, "But Metta, those are not made for people like us. Those are made for financial planners. That's what my financial planner uses when I'm in his office. We can't use those."

I reassured him, of course, but I think he still went away thinking that ordinary people cannot be expected to use financial modelers for themselves.
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I'll admit, even after decades of doing more complex operations, investing in real estate for years, and using my own hand-built Excel budget tracking/forecast and tax analysis sheets, I find my confidence falters when trying to make strategic decisions based on them - and they are even simpler than cfiresim or the other tools that are popular here.
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Re: Overheard at Work
« Reply #11456 on: December 03, 2015, 10:31:04 AM »
Coworker just showed up with a new lifted pick-up this morning. He had just paid off his old pick up last week. He was telling everyone how he got it to save money cause the old truck had 95,000 miles on it and was not under warranty anymore.

I tried not to laugh as he told people he was "saving" money on upcoming repairs by trading in his paid off truck and taking out a new loan of $560 a month for 60 months. He makes around 50k/yr.

But hey, at least he contributes 2% to his 401k.
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Re: Overheard at Work
« Reply #11457 on: December 03, 2015, 10:41:18 AM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...

Blow her mind by thanking her... because the extra withholding would push you over the annual max prematurely.

JLee

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Re: Overheard at Work
« Reply #11458 on: December 03, 2015, 10:41:51 AM »
Coworker just showed up with a new lifted pick-up this morning. He had just paid off his old pick up last week. He was telling everyone how he got it to save money cause the old truck had 95,000 miles on it and was not under warranty anymore.

I tried not to laugh as he told people he was "saving" money on upcoming repairs by trading in his paid off truck and taking out a new loan of $560 a month for 60 months. He makes around 50k/yr.

But hey, at least he contributes 2% to his 401k.

I had a good friend trade in his cared-for Lexus IS300 (with the bulletproof inline 6) because it was around 100k and he wanted to sell it before it became unreliable (they're notoriously solid cars). He bought something new which ended up getting bought back by the dealer after a year because it had a chronic problem they were unable to fix...lol.

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Re: Overheard at Work
« Reply #11459 on: December 03, 2015, 11:07:37 AM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...

Blow her mind by thanking her... because the extra withholding would push you over the annual max prematurely.

I think this humblebrag would require a lot of explaining. I don't think the average person would understand what you meant here. Many people probably don't know there is a max.

MgoSam

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Re: Overheard at Work
« Reply #11460 on: December 03, 2015, 11:19:29 AM »
But hey, at least he contributes 2% to his 401k.

That outta do it!

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Re: Overheard at Work
« Reply #11461 on: December 03, 2015, 11:21:48 AM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...
I wish my 401k could allow to indicate a flat $750 per pay period (we get paid 15th and last day of month) instead of a percentage. Instead I just adjust the percentage every April when we get our payraise and bonus to make sure I hit the exact max come 12/31.And before you ask it makes no sense to frontload as we get our match each pay period.

boarder42

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Re: Overheard at Work
« Reply #11462 on: December 03, 2015, 11:25:27 AM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...
I wish my 401k could allow to indicate a flat $750 per pay period (we get paid 15th and last day of month) instead of a percentage. Instead I just adjust the percentage every April when we get our payraise and bonus to make sure I hit the exact max come 12/31.And before you ask it makes no sense to frontload as we get our match each pay period.

its incredibly difficult for me to do even that.  i work OT throughout the year.  and next week i will be told what my bonus is for the year, and it changes and increases yearly.  so i have to try to time the last paycheck of the year to at least have me put in enough to get company match or i lose out on that match til the following april when they do taxes and put it in.  usually this isnt hard.  but it could be difficult if i got a huge bonus unexpectedly.. but i guess thats not a tough problem to have.
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Re: Overheard at Work
« Reply #11463 on: December 03, 2015, 08:06:54 PM »
Coworker just showed up with a new lifted pick-up this morning. He had just paid off his old pick up last week. He was telling everyone how he got it to save money cause the old truck had 95,000 miles on it and was not under warranty anymore.

I tried not to laugh as he told people he was "saving" money on upcoming repairs by trading in his paid off truck and taking out a new loan of $560 a month for 60 months. He makes around 50k/yr.

But hey, at least he contributes 2% to his 401k.

I wear my pokerface when I hear people brag like this. We're driving 17-18 year old cars with hundreds of thousands of miles (like nearing 300K on one) and the cost of maintenance and repairs is tiny. Like less than a car payment per year.

It saves us a car payment per month that we keep it.

Either of our cars in its entirety would cost less than one set of tires for his truck. ;)
« Last Edit: December 03, 2015, 08:18:26 PM by Joe Average »

Seppia

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Overheard at Work
« Reply #11464 on: December 03, 2015, 09:15:30 PM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.

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Re: Overheard at Work
« Reply #11465 on: December 04, 2015, 03:33:47 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.

Could you try to explain it to her? It sounds obvious to us but I think some people really don't get it. She is throwing away free money.

Eric222

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Re: Overheard at Work
« Reply #11466 on: December 04, 2015, 05:48:11 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.
Every time I see a story about someone not taking a 401k match I get annoyed.  Mostly because I would LOVE to have a match!!  Can have 401k matches that other people don't use? ;) 
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boarder42

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Re: Overheard at Work
« Reply #11467 on: December 04, 2015, 05:51:00 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.
Every time I see a story about someone not taking a 401k match I get annoyed.  Mostly because I would LOVE to have a match!!  Can have 401k matches that other people don't use? ;)

technically by not maxing out your tax advantaged accounts(if you're still paying any state or federal taxes) you're throwing money away to the federal govt.
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Seppia

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Overheard at Work
« Reply #11468 on: December 04, 2015, 06:07:19 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.

Could you try to explain it to her? It sounds obvious to us but I think some people really don't get it. She is throwing away free money.

I even tried my secret weapon, the example I use for the most math-challenged individuals.

"Hey do you know that our 401k is a magical tool that basically TRIPLES your money?"
That usually gets people's attention.
Then I explain the ballpark math
"See, $100 of your gross salary become somewhere around $65-70 in your pocket (we are in NYC so with high state + city tax).
If instead you put them in the 401k not only they stay $100, but the company match makes them $200.
SEE? IT'S A MAGIC TOOL THAT TRIPLES YOUR MONEY *me faking a somewhat astonished face like it's every time the first time I really realize that*"

Nope.
Didn't work.

johnny847

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Re: Overheard at Work
« Reply #11469 on: December 04, 2015, 06:30:25 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.

Could you try to explain it to her? It sounds obvious to us but I think some people really don't get it. She is throwing away free money.

I even tried my secret weapon, the example I use for the most math-challenged individuals.

"Hey do you know that our 401k is a magical tool that basically TRIPLES your money?"
That usually gets people's attention.
Then I explain the ballpark math
"See, $100 of your gross salary become somewhere around $65-70 in your pocket (we are in NYC so with high state + city tax).
If instead you put them in the 401k not only they stay $100, but the company match makes them $200.
SEE? IT'S A MAGIC TOOL THAT TRIPLES YOUR MONEY *me faking a somewhat astonished face like it's every time the first time I really realize that*"

Nope.
Didn't work.

The last restort (that isn't always applicable - this requires immediate vesting of employer contributions) is to tell them even if they deposited in the 401k, and then withdrew immediately and paid the penalties, they still come out ahead!

With your numbers, they put in $100 and the company match is $100. They withdaw all $200 immediately. They pay a 10% penalty on the entire withdrawal of $200 -> $20 penalty. They pay $60-$70 in tax, so they're left with $110-$120.

That's still better than not contributing, where $100 gross becomes $65-$70.


If they're not convinced with this, then I don't think there's any hope left.

Sadly, I can still see this not working for people who live paycheck to paycheck. It'll take several days to process the 401k withdrawal and these few days without their small portion of their paycheck may break their cash flow.

Seppia

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Re: Overheard at Work
« Reply #11470 on: December 04, 2015, 07:00:56 AM »
I've tried that as well, but usually for this type of individuals the math is too obscure. :)
You lose them somewhere between the penalty and the actual taxes on the 401k withdrawal.
A couple times the TRIPLE MONEY! worked.

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Re: Overheard at Work
« Reply #11471 on: December 04, 2015, 07:13:36 AM »
OMG. How ridiculous!:D

zephyr911

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Re: Overheard at Work
« Reply #11472 on: December 04, 2015, 07:14:58 AM »
I wear my pokerface when I hear people brag like this. We're driving 17-18 year old cars with hundreds of thousands of miles (like nearing 300K on one) and the cost of maintenance and repairs is tiny. Like less than a car payment per year.

It saves us a car payment per month that we keep it.

Either of our cars in its entirety would cost less than one set of tires for his truck. ;)
Anecdotal evidence unfortunately has a huge effect on people's thinking. I had a 1994 Escort with somewhere north of 100k miles that I had bought with a small loan in 2000 when I graduated from college - about $3k at $155/mo, if I recall correctly - and due to my first divorce and general financial stupidity, I only paid it off on time, in the summer of 2003. And I'll be damned if that car didn't cost me more in repairs every month for the next four months straight, than I'd been paying on the loan. I got so tired of tow trucks and loaners and copping rides that I donated it to the first charity who would take it from my driveway and borrowed five figures for my next car.
I did manage to keep the next car for a full decade and 140K miles - long after payoff - before my zeal for efficiency moved me into something newer. But I'm still trying to get over my fear of old cars. Logically, I know it's not a typical experience. Emotionally, it's imprinted strongly.

I've tried that as well, but usually for this type of individuals the math is too obscure. :)
You lose them somewhere between the penalty and the actual taxes on the 401k withdrawal.
A couple times the TRIPLE MONEY! worked.
I have a different version of this struggle with DW, whose life story is a mixed blessing. She's from a country with high inflation and constant financial/fiscal crises, and is (good news) a habitual high saver but (bad news) instinctively wants all that cash where she can reach it. It's been hard to sell retirement contributions, because her income is lower, her withholding isn't very high (even though our shared marginal rate at filing may be), and she only has access to an IRA (no match) and a SIMPLE IRA (very small match). So, even if I can convince her that she's getting roughly $1.50 for every $1 she sends... all she sees is a shrinking cash cushion. A loss, in her eyes. I don't think it matters how high our income or NW get, the cash cushion is her security blanket. But we've made progress and she's probably close to $10K in tax-deferred contributions, plus the cash buffer.

No hilarious stories from the office this week... I did go out for Moe's with a couple of CWs, facepunch me if you like but that shit was tasty... and my $7 burrito bowl was big enough to bring back half for another lunch, so not a total disaster. >.<
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johnny847

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Re: Overheard at Work
« Reply #11473 on: December 04, 2015, 07:41:14 AM »
I've tried that as well, but usually for this type of individuals the math is too obscure. :)
You lose them somewhere between the penalty and the actual taxes on the 401k withdrawal.
A couple times the TRIPLE MONEY! worked.

*sigh*

With my "coworkers" (I'm an engineering grad student) they can all understand the math perfectly.

However, sometimes that's even more infuriating! They understand perfectly (when pointed out to them) how much money they stand to make from decades of compound growth, along with the tax savings from IRAs, but they still don't save a dime because they prefer to waste their money by eating out every day.

EDIT: for typos
« Last Edit: December 04, 2015, 09:28:45 AM by johnny847 »

Seppia

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Re: Overheard at Work
« Reply #11474 on: December 04, 2015, 09:06:37 AM »
Oh yes, the "I would love to do that, but I cannot afford it" when they just leased a gigantic German SUV 3 years ago (the one coworker of mine who doesn't contribute to the 401k)

Seppia

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Overheard at Work
« Reply #11475 on: December 04, 2015, 09:06:05 AM »
Double sorry
« Last Edit: December 04, 2015, 09:07:55 AM by Seppia »

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Re: Overheard at Work
« Reply #11476 on: December 04, 2015, 09:23:13 AM »
From my colleague, who has been the director of this company for 20 years: "you can't negotiate a contract! If they're offering that amount, then it has to be fair, and you'll look greedy if you try go get more!"

It's a freakin wonder that the company has been in business for 20 years, with that attitude.

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Re: Overheard at Work
« Reply #11477 on: December 04, 2015, 09:26:19 AM »
From my colleague, who has been the director of this company for 20 years: "you can't negotiate a contract! If they're offering that amount, then it has to be fair, and you'll look greedy if you try go get more!"

It's a freakin wonder that the company has been in business for 20 years, with that attitude.
Is this in the U.S.? I gather that we are less likely to be brought up with a negotiating mindset than people in many other nations. We have our hard drivers and then there are the rest of us who never think to haggle, hate doing it, and even feel bad if we try.
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Re: Overheard at Work
« Reply #11478 on: December 04, 2015, 09:43:05 AM »
From my colleague, who has been the director of this company for 20 years: "you can't negotiate a contract! If they're offering that amount, then it has to be fair, and you'll look greedy if you try go get more!"

It's a freakin wonder that the company has been in business for 20 years, with that attitude.
Is this in the U.S.? I gather that we are less likely to be brought up with a negotiating mindset than people in many other nations. We have our hard drivers and then there are the rest of us who never think to haggle, hate doing it, and even feel bad if we try.
I'm gonna go out on a limb that us Quakers have something to do with that. See, we invented the price tag, on the basis that haggling is an inherently unequal (different people get different final prices) and dishonest (because you pretend about how much money you think it's worth) practice.

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Re: Overheard at Work
« Reply #11479 on: December 04, 2015, 09:46:31 AM »
From my colleague, who has been the director of this company for 20 years: "you can't negotiate a contract! If they're offering that amount, then it has to be fair, and you'll look greedy if you try go get more!"

It's a freakin wonder that the company has been in business for 20 years, with that attitude.

It's been a running joke for years that the absolute worst deals/contract we sign with our clients were offered by the owner of the company. "He's paying HOW much? Who signed off on that deal!?" "Uh... *checks file* You did." "Oh."
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Re: Overheard at Work
« Reply #11480 on: December 04, 2015, 10:42:34 AM »
From my colleague, who has been the director of this company for 20 years: "you can't negotiate a contract! If they're offering that amount, then it has to be fair, and you'll look greedy if you try go get more!"

It's a freakin wonder that the company has been in business for 20 years, with that attitude.
Is this in the U.S.? I gather that we are less likely to be brought up with a negotiating mindset than people in many other nations. We have our hard drivers and then there are the rest of us who never think to haggle, hate doing it, and even feel bad if we try.

Canada.

For the record, I negotiated the contract, and got the company 35% more. Which, based on my calculations, should cover costs and 15% profit. Signing the offered contract wouldn't have covered costs... like, ARGH,  you guys, come on, make an effort!

She's also the one who responded to 'we need to make more than we spend, so we need to be more efficient AND make more money in order to stay in business' with 'you think too much about money'. Like... yes. Because we're a business. Which exists to make money. And should it fail to do so, it will go under. If you don't agree with the stated goal, maybe going to work in healthcare (she's a nurse by training, initially) or perhaps for a charity, would be a better fit.

CougStache

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Re: Overheard at Work
« Reply #11481 on: December 04, 2015, 11:42:05 AM »
Recently, I referred an old "colleague" (we worked together for maybe 4 months) to my new company. He was subsequently hired. As is customary, we agree we should probably grab lunch one day to catch up. That day is today.

When he originally stopped by to catch up and suggest the lunch, he casually mentioned "you're buying with that referral bonus haha." Today, he stops by at 9:30am to confirm and ask where the office manager is because he "really needs his paycheck. Like, seriously. Today is payday, right?" Apparently, in the job switch he's gone three weeks without a paycheck. I also know his prior employer paid out any remaining vacation days (albeit at 50%), so he even should have received a bump there and he was traveling for work this past week so even a dining out habit would be subsidized.

I was originally just a little shocked he would suggest I buy him lunch, but now knowing how terrible he must be with his own money (yes, he was paid poorly at his last job, but not THAT poorly), I'm a more upset. Whatever, $6 for a slice of pizza. Really, though, shouldn't be the other way around? I'm the one that opened the door for him to get a better job and a higher salary, after all.

Fun anecdotes:
- The only reason I knew today was payday was because I made a point to check to ensure the referral bonus went through, which it did not and I needed to contact HR to ensure that process was taken care of.
- The look on his face when I couldn't provide any nearby recommendations on where we should eat was priceless. Sorry, bro, I just don't go "out" for lunch. Hell, I rarely even come to the office.
- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub. The HR woman was over the moon apologetic that she dropped the ball. No, I don't "need the money to help out with the holidays coming up," I was genuinely just curious if I would be receiving a bonus at all.
« Last Edit: December 04, 2015, 11:56:41 AM by CougStache »

Roboturner

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Re: Overheard at Work
« Reply #11482 on: December 04, 2015, 11:50:40 AM »
VP drives up in brand-new Tesla (the expensive extra expensive P9000 extra super turbo plus one that uses freshly-printed Benjamins to run)

Me: "Wow, neato car"

Him: "yeah, i guess - it was supposed to be my wife's but she didnt end up liking it so she got something else and I'm forced to drive this, wouldn't be my first choice"

Me: ................
"I win again, just like always!"




Goldielocks

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Re: Overheard at Work
« Reply #11483 on: December 04, 2015, 01:55:59 PM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.
Every time I see a story about someone not taking a 401k match I get annoyed.  Mostly because I would LOVE to have a match!!  Can have 401k matches that other people don't use? ;)

Oh!  I have a terrific matching story -- I recently requested what the company portion of cost was for Pension and ESPP matching (401k and ESPP).   Out of a total possible of 5% match, the company was paying 4.5%... 

I will be generous and assume that some people did not really want stock in the company, and nearly everyone matches 401k to 100%,  This is across 8000 US office employees, too.  (Architecture and Engineering Company, fyi)   Win!

MgoSam

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Re: Overheard at Work
« Reply #11484 on: December 04, 2015, 02:00:37 PM »
VP drives up in brand-new Tesla (the expensive extra expensive P9000 extra super turbo plus one that uses freshly-printed Benjamins to run)

Me: "Wow, neato car"

Him: "yeah, i guess - it was supposed to be my wife's but she didnt end up liking it so she got something else and I'm forced to drive this, wouldn't be my first choice"

Me: ................

LOL! It's funny a friend of mine just got a car and doesn't like it. She was originally happy because the salesmen did a good job in her eyes, making sure "payments were within reason." I believe it is used, so there's that at least.

mtn

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Re: Overheard at Work
« Reply #11485 on: December 04, 2015, 02:24:56 PM »


- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub.



How can it be taxed anymore than your regular paycheck? Even if you're bumped into a higher tax bracket, would that be an exorbitant rate? Unless you mean that it acts as if that is your normal paycheck the whole year round, so it bumped you a couple of brackets?

Metta

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Re: Overheard at Work
« Reply #11486 on: December 04, 2015, 02:34:17 PM »
A co-worker is interested in retirement (age 61) and so we've been talking since he knows that I will be retiring soon. He's been asking questions about our company's benefits for official retirees and since I've already done the research, I've sent him my links on the various policies, costs for retiree health insurance, and so forth.

Yesterday he told me that he was worried that he might run out of money in retirement, so I shared my two favorite sources for reassurance: cfiresim.com and RetirePlan (an app for the iPad). He looked at my demo of them and said, "But Metta, those are not made for people like us. Those are made for financial planners. That's what my financial planner uses when I'm in his office. We can't use those."

I reassured him, of course, but I think he still went away thinking that ordinary people cannot be expected to use financial modelers for themselves.
What is it about addition, subtraction, addition, and multiplication that makes them so intimidating to otherwise intelligent and competent people?
I'll admit, even after decades of doing more complex operations, investing in real estate for years, and using my own hand-built Excel budget tracking/forecast and tax analysis sheets, I find my confidence falters when trying to make strategic decisions based on them - and they are even simpler than cfiresim or the other tools that are popular here.
Instincts can be useful but they can also fail us miserably.

I think you are right about this. He is a very smart guy, a fantastic programmer/analyst who is comfortable using mathematics and viewing complex models as part of his job, but is unsure of this. It's interesting, isn't it?

I wonder if the true discomfort is with making strategic decisions.

serpentstooth

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Re: Overheard at Work
« Reply #11487 on: December 04, 2015, 02:38:29 PM »


- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub.



How can it be taxed anymore than your regular paycheck? Even if you're bumped into a higher tax bracket, would that be an exorbitant rate? Unless you mean that it acts as if that is your normal paycheck the whole year round, so it bumped you a couple of brackets?

One of my husband's employers withheld taxes on all bonuses at the highest marginal rate for federal and state, even if the employee was earning nowhere near enough to be in those brackets. I knew enough to understand it would all shake out at tax time, but it was a real shock the first time his bonus was paid out. It was a lot less than I was expecting!

CougStache

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Re: Overheard at Work
« Reply #11488 on: December 04, 2015, 02:41:26 PM »


- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub.



How can it be taxed anymore than your regular paycheck? Even if you're bumped into a higher tax bracket, would that be an exorbitant rate? Unless you mean that it acts as if that is your normal paycheck the whole year round, so it bumped you a couple of brackets?

Here's the explanation I received from HR when inquiring about the same issue on my last referral:
"Yes, unfortunately bonuses are taxed at a higher rate. Your W-2 will show the full amount as income though. It’s just the tax law that we have to abide by."

Who knows if HR has a firm grip on tax laws, but honestly I have a pretty lazy approach to these types of "problems." I'll reevaluate in January when filing my taxes if anything seems particularly strange.

frugalparagon

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Re: Overheard at Work
« Reply #11489 on: December 04, 2015, 02:49:30 PM »


- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub.



How can it be taxed anymore than your regular paycheck? Even if you're bumped into a higher tax bracket, would that be an exorbitant rate? Unless you mean that it acts as if that is your normal paycheck the whole year round, so it bumped you a couple of brackets?

Here's the explanation I received from HR when inquiring about the same issue on my last referral:
"Yes, unfortunately bonuses are taxed at a higher rate. Your W-2 will show the full amount as income though. It’s just the tax law that we have to abide by."

Who knows if HR has a firm grip on tax laws, but honestly I have a pretty lazy approach to these types of "problems." I'll reevaluate in January when filing my taxes if anything seems particularly strange.

My understanding is that a bonus pushes you into a higher tax bracket and that they will withhold taxes as though EVERY paycheck was that high.

Mr. FP used to get a one-time payment of something like $2000 for coaching a sport. It pushed him into a higher tax bracket, so we didn't get very much of it. HR told him later that many coaches file a special W-4 just for the month when they get that payment.
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Dollar Slice

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Re: Overheard at Work
« Reply #11490 on: December 04, 2015, 02:56:22 PM »
Bonuses are not taxed at a different rate. It's just that since it's on top of your regular income, all the extra money is taxed at your marginal rate, so it seems high. I.e. if you are in the 25% tax bracket, you might have some percentage in the teens taken out of your paycheck because it's the average of the 10%/15%/25% tax brackets. But the bonus goes on top, landing in the 25% bracket, so it's all taxed at 25%.

It's possible your HR withholds at a different rate from bonuses, but when you fill out your 1040 there is no special section for "bonus tax". It's all income and treated the same. If they over-withhold you'll get it refunded.

Source: I do payroll for my company.
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Re: Overheard at Work
« Reply #11491 on: December 04, 2015, 03:40:14 PM »


- The bonus is paid in two parts, 1/2 now and 1/2 after 6 months. It's only about $1500 taxed at an exorbitant rate, so I'll only see about $450 on my next paystub.



How can it be taxed anymore than your regular paycheck? Even if you're bumped into a higher tax bracket, would that be an exorbitant rate? Unless you mean that it acts as if that is your normal paycheck the whole year round, so it bumped you a couple of brackets?
This is how the payroll system works at my employer.  I was paid a relocation/signing bonus that made my gross 6x the norm for that pay period, and I got nailed with what roughly translates to the top tax bracket's effective rate.  I've asked HR about frontloading my HSA next year, and they told me tax withholding is calculated on annualized pay, so it acts as though every pay period is what you'll be making all year.

merula

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Re: Overheard at Work
« Reply #11492 on: December 04, 2015, 03:54:52 PM »
She's also the one who responded to 'we need to make more than we spend, so we need to be more efficient AND make more money in order to stay in business' with 'you think too much about money'. Like... yes. Because we're a business. Which exists to make money. And should it fail to do so, it will go under.

It's interesting, I was just talking about this phenomenon with my boss. We work for a company that is the product of a merger of two companies over a decade ago, but we both joined the merged company and so don't really have a stake in the Company A vs Company B arguments that STILL go on.

Anyway, my theory is that Company A wanted to do everything possible for their customers, regardless of if it made money, and Company B wanted to do everything the "right" way, by-the-book, regardless of if it made money. My boss agreed, and shared a story of an interaction he had with someone who worked for Company B years ago, pre-merger. He worked for a competitor, and Company B-guy told him "You can never make money doing X", where X is actually one of the most profitable things our industry does.

Luckily, together Company AB does things that make money, because they make money, serve customers and are the right thing to do. Which is part of why I love my job.

TomTX

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Re: Overheard at Work
« Reply #11493 on: December 04, 2015, 05:08:23 PM »
Got an email reminder from a coworker to lower withholding on my bonus check to "save" more of it from going into my 401k. Yeah, that is a good way to save more...
I wish my 401k could allow to indicate a flat $750 per pay period (we get paid 15th and last day of month) instead of a percentage. Instead I just adjust the percentage every April when we get our payraise and bonus to make sure I hit the exact max come 12/31.And before you ask it makes no sense to frontload as we get our match each pay period.

Thankfully on January 1 our plans are being amended so that you can specify either a percentage or a specific dollar amount per paycheck.
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nanu

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Re: Overheard at Work
« Reply #11494 on: December 05, 2015, 06:15:19 AM »
I just learnt today that a co worker of mine making $40k is contributing 1% to the 401k, when the company match is 3%.
She is leaving 2% free money on the table.

I tried to speak to her, the most frustrating thing is that she wasn't even able to give me a coherent reason why she's doing that.

"Oh you know, I don't really trust this stuff and I've always put 1%, so I'll just leave it like that."
"But you're leaving 2% free money on the table"
"Well, that's not that much money".

Then these people bitch because they want a raise.

Could you try to explain it to her? It sounds obvious to us but I think some people really don't get it. She is throwing away free money.

I even tried my secret weapon, the example I use for the most math-challenged individuals.

"Hey do you know that our 401k is a magical tool that basically TRIPLES your money?"
That usually gets people's attention.
Then I explain the ballpark math
"See, $100 of your gross salary become somewhere around $65-70 in your pocket (we are in NYC so with high state + city tax).
If instead you put them in the 401k not only they stay $100, but the company match makes them $200.
SEE? IT'S A MAGIC TOOL THAT TRIPLES YOUR MONEY *me faking a somewhat astonished face like it's every time the first time I really realize that*"

Nope.
Didn't work.

The last restort (that isn't always applicable - this requires immediate vesting of employer contributions) is to tell them even if they deposited in the 401k, and then withdrew immediately and paid the penalties, they still come out ahead!

With your numbers, they put in $100 and the company match is $100. They withdaw all $200 immediately. They pay a 10% penalty on the entire withdrawal of $200 -> $20 penalty. They pay $60-$70 in tax, so they're left with $110-$120.

That's still better than not contributing, where $100 gross becomes $65-$70.


If they're not convinced with this, then I don't think there's any hope left.

Sadly, I can still see this not working for people who live paycheck to paycheck. It'll take several days to process the 401k withdrawal and these few days without their small portion of their paycheck may break their cash flow.
I actually suggested this to someone, and he was like "nah, too complicated for me and I value money now way more than I value money in the future".
In fact, the way our 401K is structured, you can contribute to Roth 401K and you get the company match (50 cents on the dollar) to pre-tax 401K. I also believe we can withdraw any Roth 401K amounts without any penalty.
This means that as long as he is willing to get paid several weeks later every time (i.e. live off [probably non-existent] savings for several weeks, and then withdraw from 401K regularly) he can still have the exact same take-home pay AND have the $9K company match every year still sitting in his 401K (or withdraw that as well for penalty+tax).

and this guy isn't stupid or finds the math too difficult - he was doing a PhD in physics at Princeton before coming to work for our company...
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Bruised_Pepper

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Re: Overheard at Work
« Reply #11495 on: December 05, 2015, 05:43:15 PM »
A co-worker is interested in retirement (age 61) and so we've been talking since he knows that I will be retiring soon. He's been asking questions about our company's benefits for official retirees and since I've already done the research, I've sent him my links on the various policies, costs for retiree health insurance, and so forth.

Yesterday he told me that he was worried that he might run out of money in retirement, so I shared my two favorite sources for reassurance: cfiresim.com and RetirePlan (an app for the iPad). He looked at my demo of them and said, "But Metta, those are not made for people like us. Those are made for financial planners. That's what my financial planner uses when I'm in his office. We can't use those."

I reassured him, of course, but I think he still went away thinking that ordinary people cannot be expected to use financial modelers for themselves.
What is it about addition, subtraction, addition, and multiplication that makes them so intimidating to otherwise intelligent and competent people?
I'll admit, even after decades of doing more complex operations, investing in real estate for years, and using my own hand-built Excel budget tracking/forecast and tax analysis sheets, I find my confidence falters when trying to make strategic decisions based on them - and they are even simpler than cfiresim or the other tools that are popular here.
Instincts can be useful but they can also fail us miserably.

I think you are right about this. He is a very smart guy, a fantastic programmer/analyst who is comfortable using mathematics and viewing complex models as part of his job, but is unsure of this. It's interesting, isn't it?

I wonder if the true discomfort is with making strategic decisions.

You just blew my mind.

I've been trying to figure out why people are so scared about money my entire adult life.  I mean, even the laziest people are comfortable doing a little bit of addition, subtraction, multiplication and division, but the second you put a dollar sign on the front of those numbers?  Somehow it's suddenly too hard and stressful. 

You might be right: maybe it's because nobody sits down and tells you exactly what to do with money.  Maybe people would be perfectly happy always having a few distinct choices laid out in front of them and just be asked to choose between them, rather than evaluating their needs/wants and coming up with a solution. 

Thanks for that; you just gave me a lot to chew on. 

Argyle

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Re: Overheard at Work
« Reply #11496 on: December 05, 2015, 11:45:21 PM »
I think the reason people have difficulty around money is that the choices are high-stakes and full of emotion.  There are a lot of differing forces telling people what they should do with their money (save like crazy! live for today! buy the right stocks! forget individual stocks and buy index funds!  pay off all your debt!  leverage your debt into investments!  impress your neighbors with a new car!  be sure to get the right car!  don't let the dealership take advantage of you!  buy gold in case the economy crashes!  never buy gold!  etc. etc. etc.).  Lots of pressure, no clear path without a lot of study, and lots of potential guilt for squandering money or making the wrong choices, lots of shame for having less than other people or than you "should" have, lots of envy of those who've had an easier time of it — no wonder it's a minefield.

Making Cookies

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Re: Overheard at Work
« Reply #11497 on: December 06, 2015, 04:13:49 PM »
VP drives up in brand-new Tesla (the expensive extra expensive P9000 extra super turbo plus one that uses freshly-printed Benjamins to run)

Me: "Wow, neato car"

Him: "yeah, i guess - it was supposed to be my wife's but she didnt end up liking it so she got something else and I'm forced to drive this, wouldn't be my first choice"

Me: ................

My parents bought a "new" SUV from a fellow who bought it for his wife without consulting her. That wife wanted a Passat, not some big SUV. It was two weeks old more or less. Hundreds of miles tops. The way my parents tell the story he was really frustrated with his wife. Guess he wanted her to have what he wanted (SUV) and did not consider her taste in cars. He didn't get what he paid for the SUV. They made their discounted offer, and he paid it with reluctance.
« Last Edit: December 06, 2015, 04:19:11 PM by Joe Average »

Daisy

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Re: Overheard at Work
« Reply #11498 on: December 06, 2015, 08:00:05 PM »
I walked into a meeting and sat down next to this lady. Then, based on what happened in a prior meeting  (not important to this story) I  asked my boss if it was OK to sit by the door since last meeting he made me move up out of my seat and sit by the door. So kind of a joke/sarcastic remark from me to boss.

So then boss says "well maybe 《this lady's 》situation will rub off on you". Then the lady proceeds to tell me that she just announced her resignation. She is 63 and retiring. She had wanted to wait 2 more years to "retirement age" but couldn't  take the BS at work any more.

Little does my boss know how prescient his remarks were. I hope to be done soon too! I kept quiet but smiled internally with the comfort of FU/FI money.

arebelspy

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Re: Overheard at Work
« Reply #11499 on: December 07, 2015, 02:44:30 AM »
Hah. When you FIRE you can tell your boss his comment about you following her made a big impact. ;)
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