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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VIDEO ON MSN MONEY

31Comments
Apr 21, 2014 2:20PM
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Sure, every new kid entering the work place, getting married, buying a car, paying off school loans and raising a family can afford to put 15% away.
Apr 21, 2014 2:19PM
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This sure is a long article for something so EASY and simple. Investing, aka getting rich slowly, is EASY and anyone can do it.

This article brings up some good points but if you don't feel like reading it all please check out my youtube video series if you're at all interested. Don't listen to the "get rich overnight with penny stocks using my amazing stock market system!!" guys and don't listen to the "the stock market is rigged and you will lose all your money trust me I know because it happened to me!!" guys. Neither extreme is always the case.

Investing is a long term thing and it can be easy. My videos are free (obviously, it's youtube) and I'm not looking for any clients, email addresses or phone numbers. The link is below. Thanks for reading.



Apr 21, 2014 4:06PM
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The writer seemed to forget a BIG PROBLEM with 401ks, my employer keeps switching providers!! How do you battle them on this switching me out of my selected funds into new funds WITH NO TRACK HISTORY! That's right, the new funds I'm being mandatoried into have the same inception date as the switch??!! Then throw in a projected black-out period that "may" last until the 3rd quarter, and you have my companies 401k plan for this year!! Sign me up for this, you gotta be kidding!
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The 7  great  lies of network marketing,
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Contributing to take full advantage of the match is one of the best things that you can do. Plus, if there is a Roth feature available it can be even better particularly for the younger savers who are in a low tax bracket! We really liked this article, and we featured it on our site! http://thesimplemoneyblog.com/2014/smart-401k-planning-must-knows/
Apr 21, 2014 12:59PM
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MSN just posted this piece over the weekend. Now it is back, with all the comments deleted. Sweet.


Want to know how to avoid a pension disaster? Don't give your money to anybody. Whether it is the government, these fool idiot money speculators on Wall Street, or the professional money grabbers in companies like Fidelity. Eventually, they will come to believe that your money is their money, and that will be that.


Just look at the blind trust your tax dollars were supposed to go into with Social Security. Broke and busted. All those 401Ks that lost 40- to 50-percent of their value during the Crash of 2008. And the falling value of all that money held in those negative interest rate savings accounts thanks to ZIRP.


The worst mistake you can make with a pension is believing all this crap about how you will ever have a retirement.  

Apr 25, 2014 10:38PM
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If you want REAL news without the lies. If you want the truth of what is REALLY going on in our great country. Do not come to MSN! They are deceivers. Want the TRUTH? Go to Fox news and Townhall.

MSN is pure garbage!!


Apr 21, 2014 4:18PM
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401K is not as great as it is made out to be. Invest in real property, You can't go wrong!
Apr 21, 2014 2:20PM
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I would have to agree with "the blamee," I had money in a 401k, I was divorced before taking this new job that I had the 401k in. When I was terminated I was told that my ex-wife was entitled to half of my 401k!
I was fit to be tied, not only did she get the half that really shouldn't have been hers but she stole the other half while I was going to get a lawyer to get the other half back.

NEVER GIVE YOUR MONEY TO ANYONE!
The saying is very true.."A fool and their money are easily parted."
Apr 21, 2014 2:03PM
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Here we go again! This tripe is getting real old. Knowing your choices for investments in a company 401k does absolutely nothing for you. You are still hamstrung and forced to invest in a bunch of funds that are not making any profit. When they do make a profit it is quickly eaten up by the fees. Speaking of fees, there you go. Again, there is no choice in a company 401k. You are going to pay fees regardless. I would really like to hear from any readers of this article. Are any of you making 10 to 15 percent??? The market is killing all of us small investors. It always will because it only exist for the big investors who can actually ride out any bumps and not lose all of their investment! The only ones making money in the market are brokers and large scale investors! What BS this is!

Apr 21, 2014 1:50PM
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I  had a 401K twice in my life.  The first time I had a 401K, back in the 1990s when I was in my early 40s, I was forced to spend it after I had been hospitalized and unable to work for 3 months.   The 2nd time that I had a 401K was during the Great Recession, and it rapidly collapsed by a quarter of its value in just a few days in the fall of 2008 before I was able to pull it into a money market fund as I was out-of-town on a weeklong business trip at that time. 

Then in late 2009 I lost my 30-year career due to declining eyesight, and at the same time, my employer's broker went under, and our funds were taken over by a different broker which did not offer the money market safety fund. 

Then in the summer of 2010 with the Greek economy allegedly dragging our economy down, with my income only 60% of what it was in 2007, and having trouble making ends meet, I decided to liquidate my 401K even though I had to pay a penalty, as I just needed the funds and was really tired of seeing the value that it had taken 10 years to build collapse due to events completely outside of my control.   I suppose that I could have filed bankruptcy but I tried and managed to avoid it.  Perhaps I should have applied for a bailout instead?

I am still not certain that I did the right thing, but prices keep rising and my income hasn't.  Just since 2008 the price of a certain brand of cottage cheese here has risen from $4.79 to $7.29 for a 48-ounce tub, the price of choice ribeye steak has risen from $6.99/lb to $11.99, my utility bills have more than doubled, and the cost of my health insurance was up by about half since 2008 before the ACA dropped my cost by 22%.  At least my wife and I were able to hold onto our house which only has 12 years left to go on the mortgage as rents locally have been skyrocketing too.

At this point our retirement is largely our home equity, some precious metals that I had accumulated over many years, though which I have already been forced to dump half of what I once had, a $20K trust fund that my stepdad left my sisters and I, and in just another 5 years I'll be old-enough to collect my Social Security if I don't go legally blind before that.  I am only 57. 

One more thing that I would like to point-out about a 401K.  If you die, your survivors will be forced to liquidate your account and they will be forced to pay whatever the tax rate is on the entire lump sum.  When my dad died he had over $200K in his 401K, and even though all of his survivors would have paid lower tax rates we were charged the full income tax rate on the lump sum, which was much higher than our own incomes individually. 

What a great idea a 401K is!  You get to "invest" your retirement savings in a rigged game making brokers and robber barons rich, with zero guarantee that the value of your "investment" won't tank overnight, and if you really need your own money badly before retirement, you will have to pay a substantial early withdrawal penalty too.   Worse yet, today with QE Infinity still ongoing your money is worth less every day, and if you die early your survivors get reamed paying the highest possible income tax rate on your entire life's savings too.   I have a better idea!  Don't buy a 401K.  Let the big boys of Wall Street lose their own money instead!!!

Apr 21, 2014 1:51PM
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Save your own money yourself!!....it will be the only moneys you have any control over....keep a respectable sum cash home with you.....in an emergency the first thing to go is the ATM's.....401k's thrift savings....are too risky these days.....over the yrs many things can go wrong....and thern...nobody knows you....save your money yourself....
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