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the 401k scam.

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Anonymous said:
I agree with the last post-You are beeter off putting your money in a bank account. Even if a 401k plan has a company match.
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If that is your true mindset, tell us why? Do you think the world is going to end and everyone's 401k will be bust, but not your bank? If you really believe that you should buy gold and guns, move to a farm and prepare for the end times.

The match doubles our money, if you go with the most conservative, money market, you get the same interest as a bank account but tax deferred so it grows faster. But the match on 6 % doubles that amount, so you " make " 100% on your first 6%.

Bank account? I would go for American Gold Eagles and a Ruger semi-auto .223 caliber, for back up any one of many nice pistols.

You're a nut job!
 




dcda410 said:
What I recently learned and think most people are missing is that when your account value goes down say 25% and then it goes back up 25% over say a 3 year period, that you have lost 3 years of opportunity. It is the cost of opportunity for growth that you lost over the 3 years you needed just for your account to get back to the value is was before your account lost the 25%. 401K's are actually less expensive than pensions and was a great way for companies to boost profits. That is a clear indication that companies are more worried about profits that its work force.

The question you have to ask yourself is how long do you want to play this game, a game you can not win. Any money you have in a retirement account is there because you put the money there. Honestly, you'd be just as well off if you took your money and saved into an account at the bank.

But the real eye opener should be this: you have no idea how long you will live in retirement so how do you know how much to save. Plus you will be taxed at the 50% level. Even if you are able to have 2 or 3 million saved in 30 years, 2 or 3 million in 30 years will be like trying to live for 20 years off of $100,000. 2 to 3 million dollars in 30 won't have the purchasing power it has today. And you best hope you can find a way to stay healthy and out of a nursing home.

Good luck.................
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What if you have 2 or 3 million now?
 








dcda410 said:
What I recently learned and think most people are missing is that when your account value goes down say 25% and then it goes back up 25% over say a 3 year period, that you have lost 3 years of opportunity. It is the cost of opportunity for growth that you lost over the 3 years you needed just for your account to get back to the value is was before your account lost the 25%. 401K's are actually less expensive than pensions and was a great way for companies to boost profits. That is a clear indication that companies are more worried about profits that its work force.

The question you have to ask yourself is how long do you want to play this game, a game you can not win. Any money you have in a retirement account is there because you put the money there. Honestly, you'd be just as well off if you took your money and saved into an account at the bank.

But the real eye opener should be this: you have no idea how long you will live in retirement so how do you know how much to save. Plus you will be taxed at the 50% level. Even if you are able to have 2 or 3 million saved in 30 years, 2 or 3 million in 30 years will be like trying to live for 20 years off of $100,000. 2 to 3 million dollars in 30 won't have the purchasing power it has today. And you best hope you can find a way to stay healthy and out of a nursing home.

Good luck.................
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This is what you think, you have not learned anything. Current 401k contributions come out pretax, which saves you paying tax now. You can only put after tax dollars into a bank. Your inflation numbers are also off. Even so, your bank account dollars will suffer the same impact from inflation. If your account drops 25% in a year, your ability to recoup those losses depends on your investment choices, your statements are thoughtless, there are so many variables- simple opinionated posts like yours are essentially worthless.
 




everyone is chasing "returns". That is the problem. expecting a certain return-5-8% a year. I would rather have all my savings at retirement in money I already paid tax on and is controlled by me, not wall street. You are the fool.
 




Anonymous said:
everyone is chasing "returns". That is the problem. expecting a certain return-5-8% a year. I would rather have all my savings at retirement in money I already paid tax on and is controlled by me, not wall street. You are the fool.
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A third party here. Shooting for a 5-8% return is not an expectation it is a goal based on an average. Good years and bad years. Built over a lifetime. The real beauty of the 401k is that you can use all your investment assets and build them tax free for your lifetime, and then cash in those profits after retirement when they would not be subject to a higher rate of taxation like while you were working. The trouble with using only your approach is the investor is paying income taxes, interest taxes, capital gains taxes and investment fees at every stage of the game. With your 401k that would all be deferred and the money typically spent in taxes and fees is now earning interest over the lifetime of the investor.
Everybody needs after tax investments which can be easily liquidated for emergency use. That is why I don't totally disagree with you, but please don't approach you longterm goals with this approach. You are losing money faster than you're making it. If not for that, then consider this; as a company wage earner you have access to a 401k plan that will match you dollar for dollar up to 6% of your yearly earnings. Your participation at 6% gives you a 6% raise from the very beginning. Secondly, the difference in take home pay is negligible whether you are participating in the plan or not. So on a weekly or biweekly basis you won't feel a negative impact on your income by participating. 12% of your income earning income year after year and you won't feel it! Lastly, anything you buy, sell or barter for in this world is impacted by Wall Street by some degree. The standard for currency trading in this world is the U.S. dollar, and it is traded on Wall Street. Therefore, if you use dollars you're impacted. Even if the commodity you trade for is not in dollars, it's value is traded by someone, somewhere, in dollars. Therefore, you are dealing with Wall Street.
You can attempt to manipulate the outcome, but nobody controls anything entirely. Diversify and earn!
 








Anonymous said:
everyone is chasing "returns". That is the problem. expecting a certain return-5-8% a year. I would rather have all my savings at retirement in money I already paid tax on and is controlled by me, not wall street. You are the fool.
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You are still an idiot. If you understood even basic arithmetic your arguments fall apart. Keep on paying tax now, getting less than 1% on your bank account and then pay higher tax when you retire. Your forgetting that the national debt is so big and growing, higher taxes will be have to be paid by EVERYONE in the future.
 




No I won't pay higher taxes in the future. I'm paying all my taxes up front-now!! The folks with 500k and up in the 401k are the ones that will be paying more taxes-not me. I have learned to live with no capital gains. I don't gamble in the stock market. Also, the folks with a large 401k will also get less of a SS benefit because of means testing that will happen.
 




Anonymous said:
No I won't pay higher taxes in the future. I'm paying all my taxes up front-now!! The folks with 500k and up in the 401k are the ones that will be paying more taxes-not me. I have learned to live with no capital gains. I don't gamble in the stock market. Also, the folks with a large 401k will also get less of a SS benefit because of means testing that will happen.
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Nice thoughts but not accurate. The national debt will require ALL taxpayers to pay higher taxes. So unless you are in poverty, which you may be with your crazy thoughts, you too will pay higher taxes. Unless you are currently buying municipal bonds, you will also pay tax every year on whatever interest your bank account earns. If you are doing one of those life insurance, be your own bank deals, good luck.
 




Anonymous said:
No I won't pay higher taxes in the future. I'm paying all my taxes up front-now!! The folks with 500k and up in the 401k are the ones that will be paying more taxes-not me. I have learned to live with no capital gains. I don't gamble in the stock market. Also, the folks with a large 401k will also get less of a SS benefit because of means testing that will happen.
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I'll take my 401k with over a million and pay my higher taxes. I won't be required to start withdrawals until 70 1/2. My annual withdrawal will dwarf SS, you can have it. I have planned for 30 years that SS would never be there for me. I also have other types of investments that generate substantial monthly income now, inflation indexed, so they will maintain buying power in the future. Bank account? What is your current interest rate?
 




30 year person-your lucky. 30 years ago you could put money in 401k and do well. Not so anymore. Just look what has happened over the past 10 years in thye markets. Please don't say you made money in your 401k over the past 10 years, not many would believe you. Next 10 years probably more of the same. To many forces at play now compared to 20-30 years ago that control the markets and manipulate them beyond comprehension.
If a person started investing in an index 401k fund 10 years ago they lost money-This seems to be the new reality.
 




Anonymous said:
This is what you think, you have not learned anything. Current 401k contributions come out pretax, which saves you paying tax now. You can only put after tax dollars into a bank. Your inflation numbers are also off. Even so, your bank account dollars will suffer the same impact from inflation. If your account drops 25% in a year, your ability to recoup those losses depends on your investment choices, your statements are thoughtless, there are so many variables- simple opinionated posts like yours are essentially worthless.
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Not entirely true that "You can only put after tax dollars into a bank." as the Roth IRA is an after tax vehicle where investment choices are not limited to banks
 




Anonymous said:
Not entirely true that "You can only put after tax dollars into a bank." as the Roth IRA is an after tax vehicle where investment choices are not limited to banks
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Only a fool would think that earnings on a Roth IRA will remain untaxed in the future with the US debt load. You keep harping on 401k earnings being taxed. The Roth IRA tax advantages are only safe from congress to congress, just like mortgage interest deductions, 401k tax deferral, etc. the 100% match in the 401k on 1st 6% doubles your money. But you still did not answer the question, what rate of return are you getting in your IRA? You say you don't like the market, so what return are you getting? 20 yr CDs are about 3.4%, treasuries worse. People can do a Roth in addition to the 401k, and the 401k allows larger dollar amount. Youre an idiot.
 




Anonymous said:
30 year person-your lucky. 30 years ago you could put money in 401k and do well. Not so anymore. Just look what has happened over the past 10 years in thye markets. Please don't say you made money in your 401k over the past 10 years, not many would believe you. Next 10 years probably more of the same. To many forces at play now compared to 20-30 years ago that control the markets and manipulate them beyond comprehension.
If a person started investing in an index 401k fund 10 years ago they lost money-This seems to be the new reality.
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The bond fund has made money and so has the Galliard stable value since it came in. I have minimal amount in stock, but go on the site and look at bond fund and Galliard returns the last number of years. Your posts show an incredible ignorance of finances and investment options. I hope no one is following your advice.
 




I didn't say no one made any money in the market over the past 10 years. Yes, some did. The vast majority who took advice of investing in an index fund like Standard-Poors or others lost money-Also, most so called investment pro's have agreed over the years that an index fund is a good choice.
Again, most people, not all, lost money over 10 years.
 








Anonymous said:
I'd rather have all my money in CD'S then gamble in the market. I don't need a 7-8% return.
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While historically your CDs may be safe, they still are not insured by the F.D.I.C. and there is no guarantee you will get your money back or the rate of return promised. Therefore, you are gambling. Settling for a 2-3% interest rate today seems like the smart move with low inflation and volatile markets, but what happens when inflation spikes and interest rates go sky high and the bank has your money tied up in long term CDs at 2-3% interest? They make money and you lose the value of your principal. I'm not saying you are wrong, but don't take just one approach or you will surely lose. Use multiple approaches to minimize exposure to any one downturn. Diversify and earn!!
 




Anonymous said:
I'd rather have all my money in CD'S then gamble in the market. I don't need a 7-8% return.
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Outside of a retirement account of some type, 100% of CD interest is taxable. CDs are insured up to a specific amount per bank. To get $30,000 per year after tax, you would need way over 1 million dollars in CDs at todays rates. To get that 3 %, you would have to lock up your money in 15-20 year CDs. Plus no inflation protection.

You would be better off in TIPs within and IRA etc.

If you want the most risk free investing advice, read anything by Zvi Bodie, prof in Boston.
 




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