While we bicker and bitch over petty partisan issues, Wall Street in collusion with our political ass-wipes in Washington have robbed our 401k accounts by stealthily adding all kinds of hidden fees.
If you’ve been watching any commercial television lately, you are well aware that the financial services industry is very busy running expensive ads imploring us to worry about our retirement futures. Open a new account today, they say. They are not wrong that we should be doing something: America is facing a retirement crisis. One in three Americans has no retirement savings at all. One in two reports that they can’t save enough. On top of that, we are living longer, and health care costs, as we all know, are increasing. But, as Frontline found when investigating the retirement planning and mutual funds industries in The Retirement Gamble, those advertisements are imploring us to start saving for one simple reason. Retirement is big business — and very profitable. It doesn’t take a genius to figure out that the more we save into the industry’s financial products, the more money they make in fees and commissions trading our hard-earned cash. And as long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back. Last year, the Obama administration proposed a rule to mandate that all financial advisers, financial planners and other assorted financial wizards would have to adopt a fiduciary standard when it came to employee retirement accounts such as your 401(k) or IRA account. The financial services industry, which today manages something upwards of $10 trillion of our retirement nest eggs, thought this was a bad idea and pushed back hard. Scores of their protest letters poured into the U.S. Labor Department, the branch of our government responsible for regulating employee retirement accounts. “As long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back.” Congress, too, was hit with a furious lobbying campaign. This would be way too expensive, the industry said; if we have to provide such a standard of service, we will either have to pack up and find another business line, or have to pass the increased costs on to our customers. The Obama administration pulled their proposal last fall.
but I don't feel that sorry for people to stupid to read the fine print where it comes to something as important as their retirement.
Yes, government should do it's best to protect it's citizens from fraud, but we are all captains of our own ships, or at least we should be. People can't steal from you if you pay attention. I would like for government to ensure that no one will try to steal my money, but that doesn't mean I am going to become a sheep waiting to be shorn. Just like gun ownership, I am very capable of protecting myself, as long as the anti gun nuts don't outlaw my means of self protection.
If you are too lazy or too stupid to educate yourself, I don't feel too sorry for you, especially in this internet age where any twelve year old has the skills to educate himself on these matters.
And please don't tell me that you have drank so much of the Obama koolaid that you believe that they aren't complicit where it comes to proposed legislation like this never becoming the law of the land.
was Enron. I can't remember the percentage, but there was a high number of Enron employees that had 100% of their 401K in Enron stock. Sometimes you just can't fix stupid.
These articles get back to, "it's not your fault". And the Left with their paternalistic attitude foster the it's not your fault mantra. That's why you see them rail against defined contribution plans vs defined benefit plans, or partial social security privatization. You are too stupid to manage your money is what they are saying, and we need to manage it for you.
-- Modified on 11/6/2013 7:47:08 PM
Yes, government should do it's best to protect it's citizens from fraud, but we are all captains of our own ships, or at least we should be. People can't steal from you if you pay attention. I would like for government to ensure that no one will try to steal my money, but that doesn't mean I am going to become a sheep waiting to be shorn. Just like gun ownership, I am very capable of protecting myself, as long as the anti gun nuts don't outlaw my means of self protection.
If you are too lazy or too stupid to educate yourself, I don't feel too sorry for you, especially in this internet age where any twelve year old has the skills to educate himself on these matters.
And please don't tell me that you have drank so much of the Obama koolaid that you believe that they aren't complicit where it comes to proposed legislation like this never becoming the law of the land.
Thought private sector took care of everything including self regulation. What about getting government out of your life? What about the Repub 'government is bad' in any shape or form mantra?
Suppose you like the government when you need it protect you! What a hypocrite. You railed against everyone when they brought lack of oversight causing global financial meltdown.
I have stated repeatedly that Government needs to regulate, not meddle, or take over things best left to the private sector. Health care is a prime example.
Big Business can not be trusted to regulate itself, only a moron would think other wise, just like only a moron would think that only the GOP is in the pocket of big business.
That said, just because government is doing a bad job of protecting it's citizens, doesn't mean that one can just crawl in a hole and hope government does a better job. Anyone with a bit of common sense can do a lot to protect themselves, the internet is a great for leveling the playing field, anyone can get all the information they need to educate themselves where it comes to matters of managing their money. That's why I don't feel too sorry for people too lazy or too stupid to look out for themselves.
you have megalomania which has frozen your brain. I am quite certain your interpretation of regulation and meddling is the right one.
Just in case you don’t the meaning:
megalomania = a delusional mental disorder that is marked by feelings of personal omnipotence and grandeur
Only a moron would expect a moronic government to assist with any "fund".
I have assets just waiting to be liquified and sheltered.
I'm sure our "agreeance" is for different reasons
But the very first day I was offered a 401k by my employer back in the mid-80's I knew it was a con job, and I swore to myself too NEVER put a single penny into one.
You really can't be that stupid. If you had started a 401K back in mid-80s, you'd be a fucking millionaire today. Of course that's assuming you didn't do something stupid along the way.
It's tax deferred money, plus most companies contribute to your 401K. THAT PART IS FREE FUCKING MONEY! And most plans use Vanguard, or IShares. Oooh and what do they charge...0.15% on an annual basis. That's a con job?
Unbelievable!
Yes, over the years I invested say $100, the company matched that with another $100, and with tax free growth and dividends it is now worth $600 despite me getting overly conservative post 2008.
Of the population , one staying at the same career for 30 years ? Umm not to likely , and then theres kids college , increased taxes in most areas where betting paying jobs are ? Those who stay married , are homeowners are somewhat dept free and retire to a cheaper cost of living while maintaining the same quality of life will benefit . Most do not fall into this category and will have to work till they're dead ! Nice idea though , free money . Pal nothings free !
Diversification is the name of the game and knowing when to hold'em and fold'em !
and can be invested in a plethora of different vehicles, hell you can even drill an oil well with "qualified money" if you want to.
Especially for smaller companies, the arrangements they have with their investment house cause them to frown on older employees jumping out of their 401K to roll over into IRAs. Many larger companies generally don't care.
Still, nothing at 59-1/2 to prevent any withdrawal if taxes are paid. It's just that this is nowhere as desirable as an IRA rollover would be so nobody does it.
Once you quit, get fired or for any other reason leave your place of employment you can convert your 401K into an IRA, and of course when doing so, you can convert it into a self directed IRA which allows you huge latitude in what times of investments you hold in your plan
under some conditions you do not need to wait until you leave your employment.
This can be useful for the same reasons you stated.
The point is most people lost their 401k or significant portion of it with Wall Street shenanigans which ended up in financial crisis
I guess I am the exception: 30+ years with one company, never married, no dependents, house fully paid for......the 401k has worked out very well for me thanks
Then the Social Security Administration can look after all my savings.
They've done a wonderful job of looking after all my FICA "contributions" so far. They've never been even tempted to use it or take any of it, in any way (hidden or otherwise) for any purpose other than my old age security.
I'll never have to worry about it again.
absolutely, it will be put in a "lockbox"
And it will all be insured by Freddie and Fannie no doubt.
The market needs steady cash infusion not unlike a casino , those who benefit (small percentage ) retire when times are good . Those who retire when the bear is roaring reap little compared to other investments ( real estate ) . Or a small business ( yes easier said than done ) . But the fees and early withdrawal penalties keep the cash in play . Time will tell if 401 k were truly a good investment as for most its just #s on paper !
And cash is king as is gold and silver ! By low sell high .
If you’ve been watching any commercial television lately, you are well aware that the financial services industry is very busy running expensive ads imploring us to worry about our retirement futures. Open a new account today, they say.
They are not wrong that we should be doing something: America is facing a retirement crisis. One in three Americans has no retirement savings at all. One in two reports that they can’t save enough. On top of that, we are living longer, and health care costs, as we all know, are increasing.
But, as Frontline found when investigating the retirement planning and mutual funds industries in The Retirement Gamble, those advertisements are imploring us to start saving for one simple reason.
Retirement is big business — and very profitable. It doesn’t take a genius to figure out that the more we save into the industry’s financial products, the more money they make in fees and commissions trading our hard-earned cash. And as long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back.
Last year, the Obama administration proposed a rule to mandate that all financial advisers, financial planners and other assorted financial wizards would have to adopt a fiduciary standard when it came to employee retirement accounts such as your 401(k) or IRA account. The financial services industry, which today manages something upwards of $10 trillion of our retirement nest eggs, thought this was a bad idea and pushed back hard. Scores of their protest letters poured into the U.S. Labor Department, the branch of our government responsible for regulating employee retirement accounts.
“As long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back.”
Congress, too, was hit with a furious lobbying campaign. This would be way too expensive, the industry said; if we have to provide such a standard of service, we will either have to pack up and find another business line, or have to pass the increased costs on to our customers. The Obama administration pulled their proposal last fall.
http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/
Many, if not most, 401K accounts actually allow investment in gold, silver or effectively cash (in the form of direct purchase of short term government bonds or money market accounts), as well as any number of vehicles not associated with "the market".
401K account simply describes (defines) the tax liability associated with the contributions and earnings. Also, most employers offer matching funds in many cases.
Is an exception , 30 year career etc.. I've just seen a lot of men have to cash out or stop contributing due to career changes , divorce , etc...
I also agree with the gentleman below "primary houses " are money pits , non income producing and many hold little value as times have changed and today 30 something are unmarried and condo or apt dwellers .
The one thing I do see with many friends (most older than I am ) is no exit strategy , moving when retirement comes , those who do move and have second homes selling their primary do well. Those who stay and don't pull in the dollars they once did aren't doing so good .. high taxes in the suburbs and cost of living leaves them with little disposable income .
Diversification , is key 401 , low key home , and finding a good place to live " condo" or home when retired , or close to it .
401K account simply describes (defines) the tax liability associated with the contributions and earnings. Also, most employers offer matching funds in many cases.
you can convert your 401K into an IRA and be as aggressive or as conservative as you like.
In my opinion the key to retiring and having a decent quality of life is to have a bigger nest egg, nothing too complicated about that, and investing your money tax free (deferred) until you take it out is one of the best ways to get there.
Here are 5 things never to do with your money...that is unless you have so much you dont need some or mos of it ...(source Motley Fool)
1. Buy CDs(after inflation and taxes your guaranteed to loose)
2. Buy bond mutual funds(you will get crushed when interest rates rise)
3. Buy penny stocks(no explanation necessary)
4. Buy a house to live in as an investment(see 2008-20211)
5. Do nothing
In 2007 if a person had converted their equities into bonds they would not have lost a nickel. Only recently (this year moving forward) does inflation begin to outpace bonds.
Of course if you had any bond funds invested in GM or Chrysler in 2008 you lost some earnings as well due to Obama booting your secured position to the very end of the line, but I digress.
I would not agree with any of his NEVERs.
About the only NEVER I can think of is to NEVER put an annuity into an IRA, you would be surprised how many investment "Professionals" still do this to their clients, just to make the higher commissions. The only thing I can think of that is equal on the 'dumb meter' is to put tax free muni's into a qualified plan
Any one who needs an explanation of why this is a horrible idea is TSTTT. I bet you some self proclaimed experts have no idea what I am talking about. Anyone want to bet?
...I don't own any stocks, bonds, life insurance or annuities. No IRA because all my income is unearned. The only thing I'm gambling on is that the big one won't hit before I die.
A simple, FDIC insured SAVINGS ACCOUNT earning 4 - 6%. One didn't need a fucking Harvard business degree to understand it, and you needn't be tethered to a ticker-tape read-out or a laptop/PC to avoid loosing it every time the "market" made another 'lets make the rich guy even richer' "adjustment".
The whole goddamn thing is now an abstruse, obfuscatory snake pit of soulless vipers touting amazing S&P numbers while the marrow of America has been devoured by the psychotically greedy.
I am hardly the sharpest tool in the shed, and I manage to do quite well in today market. The tools are all there, I can't help it if you don't avail yourself of them.
I hate to say this, but the rules were even more stacked against the "little guy" back in the Nixon era than they are today. Todays world might be a bit more complicated, but all the tools to learn the game are available with a couple of clicks on a keyboard.
It's very interesting how a "Christian nation" has made the very machinations of the "Money Changers" its moral ethos.
Any rabid "Pro-life" constituents interested in going to the next death-row "Execution"??
and we both know just what hypocrites Christians can be.
Of course none of that has anything to do with the topic at hand, that the 1% has fixed the game to the extent that no one else should even bother playing. In my business I deal with self made "rich people" all the time, it is nowhere near as rare as those of you who want to "check out" like to claim.
There is a sizable group of pro-life people that are also anti-death penalty. They seem to be always headed by Catholic nuns.
The huge difference is the innocence of the dead. An unborn life is totally innocent. A convicted murderer, not so much. The original wording of the Commandment was "You shall not murder". The state sanctioned taking of the life of those convicted of a capital offense is not murder.
Given the law is derived from the commandment, how can the state hold a person to a law derived from a religious belief that they do not subscribe to?
I don't think I really need to explain the answer to your question. Or do I?
-- Modified on 11/9/2013 11:51:12 AM
God loves you though.
Are you relieved now?
Post WWII interest rates on regular savings accounts were not anywhere close to 4 to 6%, try less than half of that until the mid 60's. It was Nixon that panicked over the modest inflation of the mid to late 60's who then imposed wage and price controls which, to a point, setup up the mega-inflation that soon arrived.
Pre-Nixon, the finance degree was needed for the tax preparers/attorneys. These simpler times saw top marginal income tax rates as high as 94% until 1963. Except no one paid that because of all the tax loopholes used by the non "average" guys.
nvestor
Link #1: The Investment Manager
Link #2: The Broker-Dealer
Link #3: The Clearing Firm
Link #4: The Custodial Bank
Our Money.
What could go wrong? Shall we count the ways?
Link #1: The Investment Manager. Example:
"Federal regulators accused a Santa Monica hedge fund manager of defrauding investors by saddling them with losing securities trades while claiming winners for himself......Clients in two Aletheia-run hedge funds, meanwhile, suffered $4.4 million in losses......Eichler also failed to warn clients about mounting financial problems at Aletheia until two days before the firm filed for Chapter 11 bankruptcy protection"
http://articles.latimes.com/2012/dec/14/business/la-fi-aletheia-sec-20121215
Link #2: The Broker-Dealer.
"On a Tuesday morning earlier this month, Farhan Khan sat down for his milk and toast at his home in the Dallas suburbs. The 32-year-old engineer opened an app on his smartphone, expecting to see $380,000 in his brokerage account, nearly all his life savings. Instead his account was frozen; his Iowa-based brokerage, PFGBest, was out of business. He started to cry......PFGBest is the most recent high-profile case but it’s certainly not the only example of customers getting burned by their investments. Wendy Cross of Atlanta, who is out $360,000, is just one of dozens of investors who lost their life savings to a fraudster investment banker, Aubrey Lee Price, in July....."Not just my money, it was my dreams, my future, my freedom, gone,"
www.huffingtonpost.com/2012/07/17/pfgbest-peregrine-customer-losses_n_1679825.html
Link #3: The Clearing Firm.
"A recent research note from Sandler O'Neill analyst Richard Repetto set traders' and investors' nerves on edge when he detailed clearing-outfit Penson Worldwide's revelation that it held $42.6 million of possibly illiquid bonds issued by a horse-racing-track operator linked to a Penson director.........We witnessed a failure in mid-2008, when North American Clearing went under, tangling trades for its brokerage clients and their customers for a month."
http://online.barrons.com/article/SB50001424052970203869804576327382200170672.html---------------
Link #4: The Custodial Bank.
"Connecticut Community Bank, is the type of Main Street bank found in Anytown U.S.A.........But to more than 200 individual investors, it was the bank that should have stood sentry over their money. A lawsuit brought by investors who lost a combined $60 million in the Madoff Ponzi scheme seeks to show that the bank failed at its job as the custodial bank in charge of their money.......The bank, however, said it had no obligation to catch the Madoff fraud and that its custodian contract limited its obligations to “ministerial” duties."
Risk and Reward. Let's Put our Money to Work!
All of these frauds, as outrageous as they might seem in hindsight, came to light when the liquidity tides were still relatively high. Does anyone dare to guess how many sea-gull pecked bones will be revealed when the liquidity tide recedes with gusto?