7 ways to avoid a 401k disaster

Here's how to steer clear of common blunders that could delay or even derail your retirement plans.

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Apr 15, 2014 7:21AM
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While maybe not to the extent of Marrice's comments, I do have a very high concern that the government will find a way to get at more of our 401ks. 
 
 There are several ways to accomplish this....
- taxing 401k distributions at a higher rate
- bump you into a higher rate for retirees that are "wealthy"
- considering total 401k values in establishing special special criteria for taxes due
- change the rules on Roth distributions to modify the unrestricted tax free distributions (which is a nice double whammy on folks that converted)
- last case/if things really are going badly, a "one time" Cyprus tax on retirement accounts, then later any savings or brokerage account assets over "X" amount. If things get that bad, US treasuries may be the only safe haven since the govt. can't let foreign buyers lose faith in those.

 Then, general means testing to also reduce the SS you are eligible for, or more likely to simply tax it at a higher rate since that tax structure is already in place.

 As has always been, the savers and responsible have generally been subjected to funding the ones that were not. My guess is this is the same approach the govt. will use going forward, so the best game plan I can come up with it to actively move assets from 401ks into more liquid assets in the most tax efficient manner as possible so that if things are looking ugly they could quickly be moved to the safest harbor.  Not being all tin-foil hat on this ... just a hedge because as the Scouts taught me, always be prepared. Good luck to all on your journey.
Apr 19, 2014 9:46PM
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How to protect your retirement? Don't entrust it to anybody who can and will decide that your money is their money, because they always do.


Look at Social Security. Your taxes were supposed to go into a blind trust -- until the criminal shyster politicians passed laws allowing them full access to raid your retirement accounts (and then blame for you (the entitled) for ever believing you "deserved" to retire, at least in your lifetime.


Look at the 401Ks. Most lost between 40 and 50-pecent in the great crash of 2008. Why? Because professional speculators and money managers were allowed to expose your retirement to high risk investments like subprime loans, derivatives, and hypothecation.


And now the FED is destroying the value of money by printing trillions and trillions of it, and flooding the world with free money.


Those responsible must pay.

Apr 19, 2014 10:03PM
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I am so glad I held onto my 401K and continued to contribute even during the crash.  My 401K has almost tripled!!  I did move a good chunk into more stable areas however to try to hold onto what I have. 
Apr 20, 2014 12:10AM
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"Calculate how much you'll need"
 
It's amazing how many people have no idea how much they spend each year. They're usually the ones who also wrongly believe they have retirement covered because they have $100k in savings, and are totally unaware that out-of-pocket medical expanses before you die now average $300k. 
 
Reality bites, eventually.
Apr 19, 2014 10:06AM
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Vote all demonrats out and the world will be a better place..
Apr 20, 2014 1:44PM
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Pensions? There will be no pensions.


Presidents starting with Nixon raided Social Security "surpluses" to fund the Vietnam War. President Reagan used the "surpluses" and then the whole of Social Security to fund his "Morning in America". Pensions have been going down hill ever since. That is why most corporations don't offer pensions anymore.


Social Security didn't become a PONZI scheme until the government started raiding the fund to pay for its extravagant life style and things that had nothing to do with retirement, like $4,000.00 gold plated toilet bowl seats for nuclear submarines.


When the FED stops or is stopped from spreading trillions of phony, printed money around (money it doesn't have), this whole economy will crash overnight, just like all PONZI schemes eventually do. This crash will be world wide.


The numbers game you never hear about, about how the pool of people needed to sustain the PONZI scheme is just that. Except you also need to add all the unemployed and under-employed, people dropping out of the workforce because they know it is a just bald-faced lies, propaganda and debt serfdom. The country has gone from pensions, to no pensions, and lies about 401Ks being pensions. And any pensions there are have been "under-funded" -- stolen from. There are no pensions. I don't know why the government or Wall Street brings the subject up anymore.


The numbers game are all those millions of Americans who are only marginally employed thanks to the lie that we are experiencing a "Recovery". They can't even afford the basics -- a roof over their heads, food, clothes. A pension, like affordable health care, is a luxury that only rich people have.


The dollar game, the PONZI scheme pensions have become, is just another lie. The truth is how the value of the dollar is falling faster than income is rising. The value of the dollar has fallen 98-percent since 1913. Wait until fiat currency of the dollar collapses. Wait until the USD as the world's petro dollar goes away. Wait until the dollar as the world's reserve currency goes away. Pensions? In a Banana Republic? 


Right now your money is earning negative interest due to ZIRP (zero interest rate policy). Any money placed in bank savings accounts, CDs, or anywhere is going backwards in value. At least you can get at the money stored "under a mattress" and you have gotten it away from the TBTF banks and government.


The rest of this nonsense isn't even worth replying too. Lie to your children, too do you, Wall Street? What a complete loser this government is.

Apr 20, 2014 10:19AM
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Bail - ins are coming. Cyprus was the test. Think of the money in 401ks - it is huge AND pre tax dollars. QE pumps up the market, we all think we have a lot of money in our 401ks and we do exactly what the government wants - we go out and spend. When the time comes and the government is in real trouble, they create the GRA - Guarantee Retirement Account. What they do is confiscate every bodies 401k (which they inflated by printing money) and make you buy government Treasuries - then short time later when that money runs out, they default - leaving everybody with worthless T bills. 
Apr 15, 2014 9:43AM
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Many are to quick to roll over their 401k into an IRA before they reach 59 1/2. Internal Revenue code §72(t)(2)(A)(v) allows you to freely withdrawal 401k funds, penalty free, if you retire after 55 ( 50 for certain public sector-Police officer etc. ) You must have retired from the employer that retains your 401k. Once rolled over, this benefit is lost forever. This is not the same as the §72(t)(2)(A)(iv) code section that allows for a series of substantially equal periodic payments and is far more complex. If your happy with your current 401k returns, why not preserve the flexibility?
May 2, 2014 11:53AM
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Never a comment about welfare running out of money. The country was doomed when it started to pay people to not work.
Apr 26, 2014 9:49PM
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 Record funny fed money record debt record poverty record welfare.......................Yes Obozo you have really done enormous good for your zombie dim witted moronic democrat dweebs.
Apr 19, 2014 8:38AM
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When it's all said and done, NO ONE really knows where an invested stock or your 401K  will be when you need the money (what if you'd retired in Sept 2008 as a prime example). While your working 8 hrs a day, there are Wall street sharks who see those 401K trillions and spend their 8 hr work day figuring ways to get at that money. Employers took your retirement security off their backs and put it on yours when 401k's became your company retirement plan. Lots of luck with that.
May 2, 2014 6:33AM
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I am so glad I have a pension.  So many people are going to come up short come retirement time. My husband contributes the max to his 401k which is pretty much a joke.  It will end up being my pension that carries us through. 
May 2, 2014 8:07AM
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Get it out of the rigged and fixed stock market would be the first step. I know everybody is back in and barry2xer Wall street buddies and big corporations, and the International bankers are making a ton, so why not you. Well they will be pulling the plug again, as they did in the late 80s, and in 2008, so it is just a matter of time. They will know when you and your barber, not co much, good luck if you stay in your going to need it.
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"How to avoid a 401k disaster"................DON'T EVER VOTE DEMOCRAT, unless you want that raided just like they did SS.
May 2, 2014 7:25AM
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Canada has a 67% tax rate due.mainly  to universal health care...What is going to happen to your retirement income if it is taxed at the same rate to pay for Obamacare?  Why save anything at all?  You can suck off the government's social programs and have the same standard of living...at any age.
May 2, 2014 12:48PM
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Here are the flaws I noticed on this article.

"Contribute to the match and then some" slide. I heavily disagree with the notion you need to save 15% to live like you do now comment. that's simply a misguided statement as it only accounts for one variable and doesn't account for when you start saving, how much the match is, among other things. It also doesn't account for whether or not you'll still have debts in retirement, if the house will be paid off, if you'll even live in a house, if you'll downsize, etc. etc. I agree with saving to get the full company match, but saving more than that becomes a debatable area.

Other than that, the points are pretty basic. By this point in time, most know they need to save and do some soul searching and other research on what they'd like to get out of retirement.



May 2, 2014 12:34PM
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Liberal politicians have their eye on grabbing you 401K and giving you something worth much less in return.  I used to think that couldn't happen in the US, but now I am not so sure.  It has happened in many other countries- fairly recent in Argentina I believe.  The flip side, the stock market is still the best place to make good returns and 401 has tax advantages.  I guess I will continue investing in my 401, but try to save more outside...and hope for the best.
Apr 27, 2014 12:51PM
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Democrats have already, yes have already, proposed pretty much just taking your 401Ks and IRAs.  They have proposed just taking it by "trading it" for a guaranteed Social Security like payment in retirement.


This is YOUR Democrat party!  And really should this really come as a surprise?  They don't like success, they don't like anyone being able to have more than anyone else, and most important THEY LOVE DEBT and DEFICITS and will find that THEY will have to pay for their national distruction some how.  What better way than to just take American Savings.


Apr 19, 2014 10:03AM
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The absolute best way to avoid a disaster with a 401K is not to get involved in the first place. There are better and safer places to put your money where you don't get charged fees even when your account lost money, and that also provide better tax sheltering.


 Stop buying in to the Wall Street lie about helping you with your retirement plan, their real interest is in helping themselves to your hard earned savings through fees and other hidden costs!

Apr 15, 2014 8:56AM
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Stay away from Fidelity. Underperforming funds with ridiculously high loads and annual expenses.
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