10 things 401k plans won't tell you

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.

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.

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.    

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.

What does affirmative action have to do with defined pension plans?

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.

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.