Signs you have a good 401k plan

Here's how to tell if the plan offered by your employer is a good one -- and how you should proceed if it's not as great as you'd hoped.

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59Comments
May 8, 2012 8:51AM
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 To most Americans whining about no 401K... Your retirement is piled in your garage where you cant park your car. Quit spending your money on junk and you would be surprised how much you can save!

 

 Retirement is not an entitlement, it only happens when you PLAN!

May 8, 2012 8:16AM
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Those posting that there is no such thing as a good 401k, who has the money to save, etc, have no one but themselves to blame.  I used to work a low pay job but my wife and I always made sure that we paid ourselves first.  We were still able to put two kids thorugh college without loans.  As someone else already said, unless you sold during the downturn, you didn't lose anything except on paper.  We have made that up plus much more.  You just have to be responsible for your own life and start saving at a young age.  Oops, there's that word "responsible", a word that a lot today don't comprehend.  They only understand terms like "corporate greed" and "1%".
May 8, 2012 10:38AM
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I just retired, took my 'deferred compensation' cashed it out and put it in a money market account with my Credit Union.  I do get State retirement and SS.  I'm too young and still healthy.  I've always lived from paycheck to paycheck and know how to live from p to p.  Through the years I didn't worry too much as I have made it this far.  I own my own home, my truck is almost paid off and I plan on "living" the rest of my life as I have been.  Shoot me when I can't get out of bed in the morning.  I plan to travel, and just have the best time of my life.  I'm not monetarily rich but humanly rich.  Friends, relatives etc.  My credit is fair and I don't care.  Got my family and friends to enjoy the rest of my life with and I am 63. 

May 3, 2012 9:27PM
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Ok. Here is the scoop. You all did not lose a thing during the market downturn unless you sold. If you rode it out, you actually should have made money. Quite a bit really. If you did sell and move it you probably did lose. If you are old enough to be in retirement range and need your money for living, you should not have been in volatile investments like stocks. You should have been in secure holdings, bonds, cash etc type of holdings.

 If you are younger and paid attention to your investments you could have made a lot of money. We did.

May 4, 2012 5:41PM
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"Bigdaddy52501"said it perfectly.  I'm so sick of people whining and complaining about how 401ks are a rip-off or the "fat cats" on Wall Street stole their money.  And, of course, when all else fails, blame the President.  Retirement savings are long term and you must set your asset allocation appropriately.

Many 401ks offer target retirement funds, but they are often high in fees.  You can replicate these funds by using a combination of low cost stock and bond index funds based on your age and tolerance for risk.

It's not hard, you just have to be willing to save consistently for a long time.
May 4, 2012 12:50PM
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That's a great beginning paragraph to what could have been an article with useful information. Where is the rest of the story ??
May 8, 2012 6:42AM
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Only good 401k is one in which you actively participate. I can't believe how many forego the opportunity.
May 8, 2012 8:44AM
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You'll need to save more as the Obama Administration is looking to change the rules for deductibility as to give more to those who neither work or save.  He says "It's only fair."
May 8, 2012 9:53AM
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I am our company's 401k administrator.  Some things in this article are correct (if you don't take responsibility for your own retirement, you get what you get).  I don't agree with automatic enrollment or provisioning (employee needs to make the right choice for themselves), and some of the 'plan date' funds (often higher fees).  You can lead a horse to water, but you can't make them drink.  Also, if an employer is matching 100%, then that means they are not likely paying them enought to start with.  A Company has to find a balance between rewarding employees for their contributions, yet still earn a profit for their shareholders - people seem to forget that businesses do not exist solely to provide jobs or pay taxes....

 

Lastly, it is almost guaranteed that our goverment is about to come after people in the form of higher taxes, especially the people actually working for a living, and even more the higher wage earners - and are probably going to means test SS benefits.  IF so, then the best thing the govt can do is lift any restrictions on the amount that people can put into their 401k, especially the extreme limitiations on owners, family members of owners, and the "HCE - highly compensated employee" class. 

May 3, 2012 11:27PM
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Anyone care to tell me any different? Educate yourselves in the basic market. You WILL understand your situation better. Maybe it's just me but I always want to know what affects me, positive or negative. 
May 8, 2012 9:57AM
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...continued:

 

The more this class of people save, the less burden they are on society in the future. We (our goverment) has ruinated any understanding of saving in the name of consumption (short term satisfaction vs. long term) and we need to put saving back into the public mindset. Anybody believing the goverment is the cure all and going to 'take care of you' in your later years is a total fool.

May 4, 2012 12:42PM
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uhhhh.....could someone explain how this article relates at all to the title of the article?
May 8, 2012 11:43AM
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@ Shelly Schwartz:  1. I am getting worn out by all of these articles about how to retire on a 401K. I do not have fund choices in my 401K to provide the 8%-10% return that would be required to get to the "Golden Number" of dollars that I will need to "Retire". None of the funds are getting that kind of return! 2. All of you, supposed, financial advisors (or reporters) keep mouthing the same junk about "long term" holding of assets and "riding out the ups and downs of the markets". Meanwhile, you experts are not tied to the markets the same way that we are. Just like "Fund Managers" you make yours even if we are bankrupted by the market losses. We that work in the normal world of employment should not be "Playing The Stocks & Bonds Markets". We cannot bear the "RISK" associated with "Playing the Market"!

May 4, 2012 12:18PM
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I never saw any mention of getting rid of the insurance platform provider (John Hancock, Nationwide, Principal) that have the biggest conflict of interest.  They will put expensive funds on the platform so that they can make more money for themselves through the revenue share of the mutual funds.  The best part about it all is that they say they do not charge a fee, when in reality they can be receiving upwards of 5% depending on the funds that are provided, and participants and Plan Sponsors do not know anything about it.  Look into a 401(k) Plan Advisor (Cannon Capital) and have them switch to an open architecture platform which will open up the entire mutual fund world to let the experts and the Plan Sponsor pick the best funds which are generally less expensive.  If you mix the actively managed with the passively managed you can make a great portfolio, which is what the Advisor should do for the Plan.
May 4, 2012 12:37PM
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A good plan looks after those without much disposable income and matches not on contributions, but on W-2 income. 

 

Also, a good plan contains a ROTH provision.

 

A good plan has at least 4 index funds (Large Blend, Midcap Blend, Smallcap index and aUS Bond Index, 

 

A good plan has a written investment strategy with a watch list and periodic replacements of poor performers. 

May 8, 2012 9:05AM
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Ok I will quit my job so I can keep a fulltime eye on the stock market. Or I can work for money I need now and forget about retirement. I bet The stock market longs for the old days when people thought they could trust them.

May 4, 2012 4:59PM
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most of these posters wont benefit from this information.  after all, they're too dumb to see the blue arrows that take you to the meat of this story

May 8, 2012 11:53AM
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@ Shelly Schwartz: (cont’d) 3. Throughout my early years in the Military and working to support a family I was told, “The Stock Market was for the wealthy to play with. Gambling with the Stock Market was ‘Inherently Risky’ and was only for those who could afford the risk!” When did that change? When did it become OK to gamble with my ability to provide for my later years! 4. The only thing I find of value in all of these articles is the warning that, “You are on your own and should not rely on your employer or the government to provide for your retirement!” It is possible, but unlikely, to save enough to retire and enjoy the “Golden Years” of our lives if, as you state, you start at a very early age and keep saving until you get there. I still remember the large number of people who followed all this great financial advice and ended up losing most of their life savings just when they were getting to the point where they would be retiring! What did they do wrong?

May 14, 2012 6:58PM
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RexRaptor,

If they lost most of their retirement savings, then it means they were solely invested in the stock market and then sold their stock before the market bounced back.

In that case, there were two things they clearly did wrong:
1) They had 100% of their money in stocks on the cusp of retirement. This is not smart. Every financial advisor on the planet will tell you this is a bad idea. And a minimal amount of research into investing will reveal the same.
2) They sold out of the stock market at the bottom. The stock market has now recovered to about where it was before the recession. So if you weathered the storm, it was no big deal.
May 14, 2012 5:19PM
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100% match of 100% of my contribution, in the 19th year now.  Needless to say, I max out.
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