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Message
re: CNBC: For millions of Americans, the 401k is a failure
Posted on 3/24/15 at 10:10 am to SmackoverHawg
Posted on 3/24/15 at 10:10 am to SmackoverHawg
quote:
I think you also need to consider that the idea of an extended retirement is a pretty new thing... and for most of society, people worked just about until they died.
This is the real problem w/contemporary US retirement plans. Our long lifespan just keeps getting longer, and we spend an inordinate amount of $$ on health interventions in the final years of life. We simply won't allow people to die; every single little possible intervention is a potential source of profit for doctors & hospitals, so no one has to confront the stark reality of life ending. If you have any very elderly loved ones, you know what I'm talking about: 90+ year olds subjected to multiple drug therapies, surgical intervention, etc. Unless the family/caregivers are adamant about quality of life being paramount, docs & hospitals will torture you for years before you finally shuffle off this mortal coil.
Seriously, people used to work until 55 and die at 68 (13 yrs or so). Today, they're working until 65 and living to 85, and the last 5 years of the retired 20 are stupidly expensive (both to the individual and to society paying for absurd treatment). It's only going to get worse as the boomers age into these categories....
1
Posted on 3/24/15 at 10:55 pm to slackster
I'll go against the grain-this is something that I have looked at for a while-being a financial advisor and former business owner --there are definite fallacies about retirement system or qualified plans in general.
A question to consider is how much money in a qualified plan will actually be yours? (Fees and taxes)
Will your returns be grossly diluted by taxes and fees? I know they will.
I think if you started funding a qualified plan in the early 1980's you have done very well because of the stock market growth from 1980-1999.
However, if you look at average and real true rates of return since 2000 until now-your returns are not even close.
You are also locking your capital up for "x" amount of years and risking it through volatility.
Lastly, tax rates are at some of their lowest in history and I could only imagine that tax rAtes will be grossly higher in the not too distant future.
I encourage you to google "truth concepts videos on qualified plans.
I think it may provide a better explanation of this...
A question to consider is how much money in a qualified plan will actually be yours? (Fees and taxes)
Will your returns be grossly diluted by taxes and fees? I know they will.
I think if you started funding a qualified plan in the early 1980's you have done very well because of the stock market growth from 1980-1999.
However, if you look at average and real true rates of return since 2000 until now-your returns are not even close.
You are also locking your capital up for "x" amount of years and risking it through volatility.
Lastly, tax rates are at some of their lowest in history and I could only imagine that tax rAtes will be grossly higher in the not too distant future.
I encourage you to google "truth concepts videos on qualified plans.
I think it may provide a better explanation of this...
Posted on 3/24/15 at 11:30 pm to slackster
Social Security will be even a bigger failure.
Posted on 3/25/15 at 2:38 am to stuntman
Wow. She's a moron. He's pretty good.
He lays trap after trap for her and she steps right in every time.
But as usual, logic has nothing to do with what socialists/liberals want. They basically just want to take what others have.
"I think professors should leave the rest of us alone" is the best line of the interview.
ETA: after listening to a few more of his rants, I'm not as impressed
He lays trap after trap for her and she steps right in every time.
But as usual, logic has nothing to do with what socialists/liberals want. They basically just want to take what others have.
"I think professors should leave the rest of us alone" is the best line of the interview.
ETA: after listening to a few more of his rants, I'm not as impressed
This post was edited on 3/25/15 at 4:05 am
Posted on 3/25/15 at 6:34 am to slackster
quote:
"In America, when we had disability and defined benefit plans, you actually had an equality of retirement period. Now the rich can retire and workers have to work until they die," said Teresa Ghilarducci, a labor economist at the New School for Social Research who has proposed eliminating the tax breaks for 401(k)s and using the money saved to create government-run retirement plans.
What a fricking twat... So because some people are too stupid to voluntarily do something to set themselves up for the future, it is a failure?
Posted on 3/25/15 at 8:22 am to Lsut81
There are some legit arguments for going back to some version of the pension plan and scrapping the 401k.
A reason that has "it is unfair otherwise" is not a good argument though
A reason that has "it is unfair otherwise" is not a good argument though
Posted on 3/25/15 at 2:03 pm to slackster
Such bullshite. They didn't interview me that's for sure. I'm 45 and have enough in mine to retire right now. It would not be a super comfortable retirement right now and that's why I'm still working. It's dumb people that are the problem. Can't tell you how many times I've seen people job hop and cash it out. They always have some excuse as to why it had to be done.
Posted on 3/25/15 at 6:51 pm to player711
quote:
I'll go against the grain-this is something that I have looked at for a while-being a financial advisor and former business owner --there are definite fallacies about retirement system or qualified plans in general.
A question to consider is how much money in a qualified plan will actually be yours? (Fees and taxes)
Will your returns be grossly diluted by taxes and fees? I know they will.
I think if you started funding a qualified plan in the early 1980's you have done very well because of the stock market growth from 1980-1999.
However, if you look at average and real true rates of return since 2000 until now-your returns are not even close.
You are also locking your capital up for "x" amount of years and risking it through volatility.
Lastly, tax rates are at some of their lowest in history and I could only imagine that tax rAtes will be grossly higher in the not too distant future.
So what would you recommend as a viable alternative?
Posted on 3/26/15 at 11:34 pm to weagle99
Something that I won't state specifically on here, but something to where you have access to it, liquidity, control, tax efficient for growth and tax free when you take it out, a competitive rate of return, with no downwards returns, only an upside button, and to use the money as a warehouse so you could collaterize the cash in their for other spheres of your expertise( business, real estate, private equity, partnerships, etc...) that could make very high returns.
Google the 770 account and that is what I am talking about.
Or read books-the wealthy family by chase chandler or warehouse of wealth by Nelson Nash...
That is the alternative
Google the 770 account and that is what I am talking about.
Or read books-the wealthy family by chase chandler or warehouse of wealth by Nelson Nash...
That is the alternative
Posted on 3/26/15 at 11:53 pm to player711
He has been pumping infinite banking up and down the board.
Wouldn't be shocked if he sold the product
Wouldn't be shocked if he sold the product
Posted on 3/27/15 at 1:27 am to hungryone
quote:
90+ year olds subjected to multiple drug therapies, surgical intervention, etc. Unless the family/caregivers are adamant about quality of life being paramount, docs & hospitals will torture you for years before you finally shuffle off this mortal coil.
while I do agree that older individuals require much more testing and therapeutic intervention, what are we supposed to do when the 90 year old granny shows up in the ER with dyspnea and dehydration with the a few family members saying for us to do everything we can?
Posted on 3/27/15 at 1:50 am to GenesChin
He may try to pump Chandler advisors again lol
Posted on 3/27/15 at 8:20 am to slackster
It's no failure at all, but there are issues, such as when the stock market, to which all of the 401K money is tied to, crashes >50%, as it did a few years ago.
It's also a problem putting all investment risk on workers, who are not experts at it...and when you have expert short sellers on the other side, it's not a fair game. And it's even not fair to knowledgeable investors because you can't short and play their game out of your 401K. It's also a problem because moving money in and out of 401Ks is like walking in mud, compared to what the other side can do.
There are advantages to it. 401Ks are more portable....the vesting rules in old defined benefit plans were far more onerous.
But there's still work to be done. For one thing, why not let you just drop 401K money into a bank for interest if you choose.
It's also a problem putting all investment risk on workers, who are not experts at it...and when you have expert short sellers on the other side, it's not a fair game. And it's even not fair to knowledgeable investors because you can't short and play their game out of your 401K. It's also a problem because moving money in and out of 401Ks is like walking in mud, compared to what the other side can do.
There are advantages to it. 401Ks are more portable....the vesting rules in old defined benefit plans were far more onerous.
But there's still work to be done. For one thing, why not let you just drop 401K money into a bank for interest if you choose.
This post was edited on 3/27/15 at 8:32 am
Posted on 3/27/15 at 9:44 am to LSUFanHouston
Wut? The system is not broken. The system is neither right or wrong. Is it anyone else's problem your mom dropped out of school, and took 25 years off from work? Sounds like she needed a better lawyer. The system works great for me. Granted, I haven't bought new clothes in two years, and I drive a 10 year old mazda that I paid off years ago. I also only eat a small snack for lunch, and one full meal at night. Frugal? Probably. But I understand the more cash in my mutual fund, the more it makes. The only problem with the current setup was assuming people are smart enough to understand basic math, and how interest works. When you understand it, you want to exploit it.
Posted on 3/27/15 at 11:17 am to AUCE05
The real problem is that machines are going to be doing work that some of you perform right now. Fewer humans working means there are fewer people contributing. Corporations don't have to pay healthcare and pensions to machines.
Think. About. It. I may not live to see it, but changes are coming.
For most of you young people, I would not have all of my eggs in the .gov regulated baskets.
Think. About. It. I may not live to see it, but changes are coming.
For most of you young people, I would not have all of my eggs in the .gov regulated baskets.
Posted on 3/27/15 at 11:50 am to Blakely Bimbo
quote:
Fewer humans working means there are fewer people contributing.
We're going to have to find something for them to do, then. Because the layabouts aren't doing very well left to their own devices as it is.
Posted on 3/28/15 at 4:56 pm to GenesChin
Research it for yourself-read a book and then poke holes in it. I do "infinite banking " and other things financially. It works...not sure what else to say...
Posted on 3/28/15 at 8:08 pm to player711
quote:
Research it for yourself-read a book and then poke holes in it. I do "infinite banking " and other things financially. It works...not sure what else to say...
Then stop talking. You hype the shite out of it, super vague and posted it in every thread in a week. We got it about 3 threads ago
Posted on 3/28/15 at 8:47 pm to Teddy Ruxpin
quote:
I'm not really planning on retiring no matter what I have socked away. Push me out while my death is imminent.
Retirement just seems dreadful and the route to an early grave if you don't keep busy.
My grandfather has been retired longer than he worked, travels often with my grandmother. Plays cards and cooks with his friends weekly. Sounds like retirement is working out well for him
Posted on 3/28/15 at 9:09 pm to Epic Cajun
The only argument I have against 401k account would be the lack of flexibility. Only being able to invest it in certain "funds". I'd like to see them increase IRA contribution limits though..
This post was edited on 3/28/15 at 9:10 pm
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