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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49Comments
Oct 5, 2013 10:00PM
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401k's are scams!! Think about it, the DOW is stagnated for decades, the 401k comes along and BAMMMM......the DOW shoots up exponentially. Who really has benefited from this? -->Companies, brokers, the 2%, .hmmmm......did you? Not likely. You will lose money regardless of how they portray it and would be better off just sticking it in an account yielding .1% than to participate. Do what you want, but your just GIVING those b*stards your money.
Jul 11, 2013 2:08PM
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The 401k movement is a scam - it artifically props up the stock market making fund managers billionaires - and the value of the typical 401k is next to nothing compared to traditional retirement plans.  $100,000 in a 401k at 5% is $5,000 a year (before taxes) that is laughable.  Also you have no control when your money enters the market and guess what? - stock prices tend to trend up right around the time your money is set to enter the market - people are making billions of dollars just on the small margins at the times when the money enters the market.  The fund managers, investment bankers and so on - know the exact time your money will hit the market and move prices accordingly.
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Wall Street Banksters in Charge of our Economy!
Wall Street Gamblers deregulated government!
Wall Street & Banks= "financial weapons of mass destruction"
Get Wall Street out of Washington!
Dec 12, 2012 1:57PM
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if you are a middle income earner and contibute to 401k,the only advantage you get is the discpline to set aside something you would have spent if it were not taking before you get your paycheck but if you really want to retire, you have to brace up to save up to 20% of your income.Look for a strategy that grows to out pace taxes and inflation,your capital is safe and you have tax free withdrawal strategy.Otherwise,if you leave your future in the hands 401k contibution,by the time you retire it will be too late to do anything but to go back to work.We are in the era of self funding tighten up your belt
Dec 8, 2012 12:37AM
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I've had both a 401k and an investment acct. I found the 401k with a 50% company match had made me more money in the long run than I see the investment acct. doing. Too many hands in the pot. Taking out too many fees. Especially hidden ones.
I ran my own 401k acct., but opted to pay them at the investment acct. to do it because I'm too tired to learn this stuff all over again. They claim they ONLY take 1.25% out. But watching my acct. lose thousands for this 1.25% is a bust. I don't have that much in it to need to lose so much each year. I'm sure whoever is running this thing is filling their pockets plenty, since I am but one investor. No wonder these places are rich as Hell.
Plus...if I want to take out my money, I have to shell out 20% taxes right off the bat. Since my acct. is filled with before tax money, that was chosen by my Ex. When he took his portion out, he took out all the after tax contributions for himself. Screw me !! By all of them !!
But...I'd much rather keep my money under the mattress these days. When ya don't...every Tom, Dick & Harry has his hands in it.

Dec 7, 2012 9:44PM
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People need to quit depending on others to take care of them-their employer, government, etc.  Are some 401k plans better than others, heck yes.  But, I cannot count how many young people would rather drive a new car, live beyond their means and neglect their retirement.  That is not my fault, the employers fault.  This article is another attempt by the media to make business look bad.  
Dec 7, 2012 9:36PM
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What a BS article.  YES, 401k plans WERE meant to supplant pension plans.  But, the general public is to fricken lazy to save enough.  They would rather spend money on their big screen, new cars and other junk before saving for themselves, then they whine that big business has screwed them.  I am sick of people not making good decisions, not taking care of themselves then trying to make it someone else's fault.  Let em starve.  
Dec 7, 2012 8:48PM
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you are in a ponzi scheme when you give somebody your money to save for you you are a fool!!! and if you do get it back 50% goes to the government!!!  put your money in the mattress

Dec 7, 2012 6:38PM
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Basically 401 k plans were designed to supplement pensions. I can see that, but the investment industry pounced into the foray, as they knew they could get $$$$ in fees from "average middle class Joe's".   For most  Americans that invest into 401 k's don't have a clue about investing. They know they should invest for retirement, but never educate themselves. Remember this people..NOBODY LOOKS AFTER YOUR MONEY BETTER THAN YOU DO.  So, that also means educating yourselves about investing, and the merits of compounding interest.  That is key, especially for the younger generation. The more time your investments have to grow, the better compounded returns are.

  I assist fellow employees on investing in their 401 k's. I am not a advisor, but, I study the markets, and educate myself.  I assist my fellow co-workers. I try to explain the basics, of which many don't have a clue.  Of course 401 k plans want you to invest into mutual funds, as they reap big profits off investors in these funds. For the average Joe, a mutual fund can sometimes do ok, but, the mutual fund makes money off of you whether that fund makes money or not. It's in their expense ratio..another name for a FEE to run the fund. 401 k plans would be better off just paying the company that runs the 401 k for the company to charge a flat fee for investments made in the respected employees plan. Expense ratios vary widely, especially in emerging  funds and specialty funds.  I can see the mutual fund companies charging higher fees to people outside of a 401 k plan, but within 401 k's....a flat fee should be the norm.  Larger companies will have the advantage there, as more employees investing into 401 k's, the fees could be lower, and the employees company could use leverage with different 401 k plan providers. So, a disadvantage to the smaller companies.

  I dumped all my mutual funds in my 401 k plan at work, when our company allowed us to invest through the 401 k plan brokerage account.  it's still before tax 401 k dollars, but, I invest my money into whatever i want. Stocks, bonds, cd's, all kinds of investments. There are a few no no's as investing in MLP's and my own companies stock.  I have far greater control of my investments. I invest in individual stocks, and especially stocks that pay dividends. Dividends are free money paid by companies, just for investing in that companies stock. I can choose whether to reinvest my dividends into more shares of that company, or take it as cash, and use that cash to reinvest it somewhere else in my 401 k plan. That is a far greater choice allowed to employees investments.  My return for the year at present is 17.6%.  My goal is at least a 10% return a year on my investments, and believe me, dividends , are a key driver to better returns. Usually in mutual funds, the dividends you receive are at the end of year, like now.  Most companies pay dividends once a quarter, and reinvesting those dividends every quarter can help your investment right away. By waiting until the end of the year to get paid those dividends, they haven't compounded during the course of year. By the way, I pay a flat fee of $12 a year and a  (little high) $8.75 a trade. A trade is when you buy a stock, and when you sell a stock. Most mutual funds in 401 k plans charge the fee based on how much money you have in your account. The more in the account, the more you pay in "FEES". those fees over time will erode your returns, especially when you amass a big account.

 So, i know a long winded post here, but, your company or investment "professionals" won't look out for your best interests like you will. You work hard for your money, so now work hard for your investments to prosper. There's no free lunch in life, so do yourself a favor, and get educated.

Dec 7, 2012 2:59PM
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god will repay just keep watching all who don't believe the first shall and the last shall be first the rich will not over come my god the last word will you hear me will have the last word so be encouraged keep looking up it is coming in do time says the Lord                                    
Dec 7, 2012 2:25PM
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That huge sucking sound over the past few decades is from the rich, elite, policy makers in global banks, global governments, and their lobbiests. They have squashed policies and practices that were designed to give the middle-class some security so that instead of letting the middle class gain wealth and security, it goes to the wealthiest among the planets inhabitants (those who make the rules). That sucking sounds is hidden fees going to the banks, lowered wages, weakended and busted unions, higher taxes as a percentage of income, policies that keep money out of the pockets of share holders, more governement fees for services and higher fees for the same or less service...and the list could go on.  Trickle down theory? Don't you believe it. It's actually a gusher up.
Nov 26, 2012 5:50PM
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I read today that Obama wants to take control of 401k's now. Charities are already on the radar and where I live, the mortgage credit is now gone. Churches will be next.

 

Thank you to all you idiots that believed that a Eutopic Society could be created by these typical, worthless Democrats.

Nov 26, 2012 3:30PM
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This is what the corrupt Republican corporate MONARCHY with their political puppets GAVE US & STOLE OUR GUARANTEED PENSIONS! Nothing but their INSURANCE POLICY that says if they fail so do we!

And they have the nerve to want back in our federal government that they ALSO HAVE STOLEN & put us INTO SLAVERY & IN OUR VERY OWN COUNTRY!!!!!!!!!!

Nov 26, 2012 12:14PM
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The one thing for sure is most of us will need a heck of a lot more than we will have! Thats for sure. My 401K goes up and down more than the price of gasoline. In fact almost coincides with the price of gas, go figure. Once when they repaid almost %30 percent annual return they were a goldmine, not now however at 3 or 4 % still better than CD's or saving accounts.
Nov 26, 2012 11:46AM
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You ever wonder where these so called Business Analyst and or Stock Analyst are coming from with their comments and articles on the market. Good case in point, the past weekend all the analyst were commenting on the record year for retail sales over the past weekend. Now just this morning because the market goes down and so do retailers like Target go down the analyst claim it's due to "Fiscal Cliff"'.

 

They are all a bunch of liars and truly do not know what the hell they are talking about. 

 

It's due to profit taking and overall market manipulation by the big guns. Just plain screwing of the small 401K investor

Nov 26, 2012 11:38AM
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This is the same old article that has been written time and time again. What would be nice is an article pointing out some books or help sites for the average person who doesn't understand.
Nov 26, 2012 11:32AM
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There aren't any "secrets" to a crap-shoot. Besides, I just read an article at WND that this administration wants to take over all 401's now because there is so much money in them.
Nov 26, 2012 11:13AM
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This article is rubbish. Everyone should be investing 15% of their household income into retirement. If your company offers a match, take it! It is free money. Beyond that, put the rest of the money into an IRA or Roth IRA. My mutal funds have a track record of 14% right now. I put $15,000 each year in retirement, and have never felt better about my financial future. The 401k plan is much better than a pension! (If you know what you are doing). Research mutual funds that have a good track record.
Nov 26, 2012 11:06AM
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When you start a 401k at your company, you need to realize that you've just added another job responsibility to yourself; managing your money ! The company itself isn't going to look out for your best interest and certainly not your manager or supervisor. The money you've invested in that fund is now 2 or 3 degrees of separation form you, meaning that it's been 'handed' off to a manager of another company( or computer program) that manages that particular fund. Not very personal and very risky these day's !
Nov 26, 2012 10:11AM
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You definitely need to understand what you are doing !  I went to a financial advisor ONCE...basically you give them money, they take a commission and than some computer program tells them when things need to be adjusted....Most of them do not know any more than the average person.

That is not personnalized guidance.  I have had better luck on my own.

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