10 ways your 401k can fail you

As to rolling over a 401K into a new employer's 401k beware!  If the new employer

has underfunded his plan, you could lose some of your hard earned retirement nestegg.

And it is legal for the employer to do this.  It is almost always better to roll into an individual

IRA. The money is safer, and you have some choices.

And as far as the death benefits in a 401k, it is a modular plan. You can plug in a new

module.  What module?  If you use a whole life policy you can divert up to 50% of your

older contributions into the life insurance to fund it, and if it is a UL policy, up to 25%.

REMEMBER, ALL OF THE CASH VALUE BECOMES DEATH BENEFIT, AND, UPON

DEATH IS TREATED AS TAX FREE!   PRETTY GOOD TRICK!

Truthhurts,

Are you serious?  You need to clarify if you are discussing Defined BENEFIT or Defined CONTRIBUTION Plane?  Defined benefit plans were/are a long-term problem that did not work -- this is why most companies and governments has beeen trying ot get away from them for decades.  Social Security is THE definition of a giant Ponzi Scheme.  The obvious answer is for people to become PERSONALLY RESPONSIBLE and SELF RELIANT and get educated on their investments available in a defined CONTRIBUTION Plan like as 401k, 403b, etc.  A 401k is a great tool, as long as the costs are low and the fund choices diverse with good performance -- with a good mix of domestic stock, international stock, index funds, domestic bonds, I-bonds, international bonds, money market.  The key is to NOT try to time every market turn but also to NOT always let it ride like a lemming.  Frankly, this most recent market drop was visable to EVERYONE who has followed the markets the last few years and to anyone who has read a column about the "Out in May" strategy.  It does NOT mean that everyone else is a "shark" just because an investor is too stupid to see the forest for the trees! 

One comment about 401K's.  The employer's contributions

to your part of the plan won't vest for 5 years from when you

start.  But they stay in the plan to be spread out to the other

participants in the plan if/when you leave.

So, it benefits those in upper/middle management to keep

you on the payroll and terminate before the 5 year vesting

kicks in.  That way they benefit from the employer contributons

paid into the plan on your behalf.

Sure, you get your contributions back, but not the employer's

match.  Your boss gets to add that to his.  Sound fair?