10 things 401k plans won't tell you

Hidden fees, paltry choices and lousy investment returns could delay your retirement -- or prevent it entirely.

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Dec 14, 2012 7:41PM
The great Washington money grab is making long term investing nearly impossible. As things are today a large portion of the money made on 401k and IRA investments are eaten up by fees and now higher taxes and the elimination of deductions will erase most if not all of the gains. Simple fact is Washington has been spending out of control for decades, and they look at the average persons retirement accounts and investments like a fox sneaking around the hen house. Rest assured Obama and his left wing supporters will milk everyone with a penny saved completely dry and redistribute it to the have nots under the cloak of fairness.
Dec 14, 2012 8:03PM
There is 6 TRILLION dollars in 401K's, IRA's and Roth IRA's. The government wants your money, soooo MSn is helping by demonizing them and making them sound bad, fact is, its OUR money and they want it.
Dec 15, 2012 12:37AM
I have invested in a 401k since 1981. Since my defined pension is now history, I will now count on my 401k, which now is in an IRA for my retirement.  It works but I know it seems like that account will never grow. I had a great financial advisor that helped me invest. He told me two things back in 1981, that I still follow today. Don't panic and don't follow the crowd. I may have paid too much in fees early on but I look at the account now and could care less. 

Just do it!!
Dec 14, 2012 6:24PM
What they fail to tell you is that 401k is a gamble.  Just like putting your money in those machines at the casino.  If something happens with the stock market, boom, it's ALL gone.  ALL of it.  All that money you put in there is gone in an instant.  Just like the machines at the casino.
Dec 14, 2012 5:59PM
401k is for suckers....I put my limit away every year but I am not counting on just that....I personally have invested in these REO properties and I have real cash flow now.....I know there are risks to renting but I like seeing my $ now rather than hoping some fund manger and the economy works out over the next 30 years. Not saying 401k are worthless but i think people who just throw $$ in there as their only hope are making a mistake. We better get back to making America the best place in the world to do business (And invest) or else these 401k's could see some real hurt coming.
Dec 15, 2012 12:39PM

This article brings out a number of very valid points.   The Defined Benefit system didn't go away because it wasn't a sound system.  It went away solely because of governmental intervention with legislation such as ERISA and AFFIRMATIVE ACTION.  Legislation not only increased the costs of administration, but it also added a great deal of volatility to the stability of employment.    


For employers, DB plans administration and funding became unaffordable as investment returns became far less predictable.  For employees, employment volatility generally meant that they didn't have enough single employer seniority to gain any benefit from DB plans.


The result is that more employees work for small firm employers than ever before.  Most of these small employers were forced to start their business as the larger firms they worked for terminated their positions during the economic downturns over the past 30 years.


The present system is confusing for employees and a real challenge for their advisors.  The more money that is printed by the U.S. Treasury, the more the money we have in our pockets is devalued.  Some investments will retain their value better than others, but the uncertainty of our situation (which Congress apparently is determined to ignore) adds additional market volatility. 


Given our present economic environment, even professional advisors cannot say with ANY degree of certainty how much we will need for retirement tomorrow.  At best, we can only say what is needed for the present. 


However, one thing is certain.  We must save and invest or we will have nothing!  The question now is...  'What should we invest in?'  and  'How much liquidity do we require.'  Some investments, unlike currencies, are always worth 'something'.   Governmental forces though, are legislatively seeking every venue they can to 'seize' whatever 'property' the citizenry has that is of any value.    

Dec 17, 2012 8:04AM

Put your money in mason jars and bury it in the back yard.You will be better off in the long run.

Never trust other people to handle your money.People see a chance to take it and they will. As a matter of fact ,they already have.And will continue.It ls greed ,you know.Take a look at the guy above this article.He looks like he is a member of the 401 k. WHY DOES HE LOOK LIKE HE IS GOING TO CRY??????????Greedy system has took him for a ride.

A Republican, in a wheelchair, entered a restaurant and asked for a cup of coffee. The Republican looked across the restaurant and asked, "Is that Jesus sitting over there?"
The waitress nodded "yes," so the Republican requested that she give Jesus a cup of coffee, on him.
The next patron to come in was a Libertarian, with a hunched back. He shuffled over to a booth, painfully sat down, and asked the waitress for a cup of hot tea. He also glanced across the restaurant and asked, "Is that Jesus, over there?"
The waitress nodded, so the Libertarian asked her to give Jesus a cup of hot tea, "My treat."
The third patron to come into the restaurant was a Democrat on crutches. He hobbled over to a booth, sat down and hollered, "Hey there honey! How's about getting me a cold glass of wine?" He too looked across the restaurant and asked, "Isn't that ‘God's boy’ over there?
The waitress nodded, so the Democrat directed her to give Jesus a cold glass of wine. "On my bill," he said loudly.
As Jesus got up to leave, he passed by the Republican, touched him and said, "For your kindness, you are healed." The Republican felt the strength come back into his legs, got up, and danced a jig out the door.
Jesus passed by the Libertarian, touched him and said, "For your kindness, you are healed." The Libertarian felt his back straightening up and he raised his hands, praised the Lord, and did a series of back flips out the door.
Then, Jesus walked towards the Democrat, smiling.
The Democrat jumped up and yelled, "Don't touch me ... I'm collecting disability."
Dec 17, 2012 2:22PM
Funny how most people think that a 401(k) is a free money account. Contribute a little, be patient, and then by the time you retire, you have millions. Yeah right. There is no such thing as free money. You want to have enough money for retirement? Then quit buying useless crap in order to feel good about yourself or pass the Joneses, save your money, earn, that's right, EARN, more money if you have to, and rely on yourself. If you don't, and if you rely on others, you may very well be in the streets by the time you retire.
Dec 17, 2012 12:05PM
A 401-K may not be great, but at least it is something. For me, that money can go to my children and grandchildren if my wife and I don't spend it.  A regular pension just ends.

I do believe companies should increase their matching contributions.  Since many do not want the liability of a pension, a 401-K makes book keeping easier and cleaner.

Maybe if the government would pass a law to remove any liability to companies that talk about the investments available in their 401-K's  the companies would feel more obligated to help people invest better.

My wife and I have a nice 401-K amount and have been taking money out monthly to be added to our social security and we  have a comfortable life style.

It can be done, but you will not be able to have all the vacations and toys you want all your life.

Dec 17, 2012 12:53PM
What does affirmative action have to do with defined pension plans?
Dec 19, 2012 1:15PM
My employer contributes 75 cents for every dollar I save up to the first 5 %. It's done on a pre-tax basis and even if you contribute only 2% every week the change in take home pay is zero.  You have to have some plan as you won't be able to retire on Social security ... If your employer offers a plan and you are eligible then get on board.... It's a No Brainer.
Dec 17, 2012 2:27PM
Prior to 2008 I was able to put away 16%.  Fast forward to 2012, no raises for 2 years, expenses going up, I had to cut back to 6%!  I'm 39 and would love to at least get back to the minimum.  Doesn't look like it's going to happen anytime soon. though. :-(
Dec 14, 2012 7:00PM
Saving money is a loosing game. You will be very lucky if you can buy the same things then, as you can now. A loft of bread which was $1.00 5 years ago is almost $4.00 now. A pack of cigarettes that was $2.60 a pack 5 years ago is $11.00 now.  Milk, eggs, gasoline, rent, ect. ect. everything goes up. Not to mention you will have to pay tax on the gains. What Gains?  Best thing to do is pay for everything now at today's prices and take it later when you need it.  This way  you wont worry about having enough money or pay taxes on so called Gains.
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