It is ludicrous to say that 401K's have failed Americas. Maybe Americans
have failed Americans, but not 401K'sThe 401K is a great
vehicle for savings however, it must be funded at adequate levels.The real shame between older generations and the newer ones is that less and
less companies have retirement plans.
This article is misleading. The truth is, is that people do not know how to
save. People have always thought that they would have a guaranteed retirement
with SS and did not bother to save enough for retirement. There are articles
all over the place that say the exact same thing you need to save more and then
they throw out some high number and say you need to save 15% of your pay check.
The fact is not many people can save 15% right off the bat. As a 401(k) plan
advisor I advise people to 1. start 2. increase your deferral by 1% every year.
If they do that by the time they are retiring they are saving upwards of 30% or
more from their paycheck and now those high savings numbers are doable. It
requires discipline and consistency. If people do those things they can have a
great retirement and then the 401(k) has not failed them but helped them to
succeed and reach the goals they have set.
Solution - privatize Social Security so people can use wisdom with those funds
as well... that way the minimal safety net many rely on is at risk as well.
This article is stupid. People choose to save, not financial instruments. $60K
total? You work 35 years and that comes to around 1700 a year. Ehhh? That is
around 140 dollars a month. That is not taking into account interest. So these
people are planning on living a similar lifestyle after quiting work by saving
around $50 a paycheck? Yo'own darn fault if you so dumb. You
want to have a nice life after retirement? Plan. Run the numbers. Take some
risks. Make sure they are worth it. Do some gimmes that don't return as
much. Freakin' buy a rental house right now with interest rates at below
4% (I know you will have to buy a point to get that rate on an investment, but
c'mon, have a plan). NO ONE IS YOUR FRIEND. What I mean is there is no
one out there to take care of you if you are not taking care of you. Have a
Oh yeah, and another thing. If you want to buy something that will take money
away from your retirement plans, work extra for it. I am even as we speak
sitting at my desk on a Saturday working cuase I bought a motorcycle yesterday.
I will have to do a few Saturdays to pay for it. Plan, sacrifice, do the hard
things and don't wait for someone else to take care of you.Supposedly SS will drop to 75% 2 years after I retire. So I work my whole
life and then get the shaft. Take care of yourself and make sure you ain't
relying on SS as your fallback.
The Dems have a plan to confiscate all 401k and IRAs. They believe it is all
Gov. money because it was not taxed. They spent so much time in Obamas'
first two years on Health Care they didn't get to it before they lost the
House. Watch out if Obama is re-elected and they re-take the House.
"The Dems have a plan to confiscate all 401k and IRAs. They believe it is
all Gov. money because it was not taxed."Say what? What is the
source of this earth shaking revelation? I am willing to take a guess.....ER in EUR - not sure what you do for a living, but you surely
aren't one of those who is trying to pay your monthly bills at near or
close to minimum wage. Take those people who provide those oh so cheap product
everyone buys at their local Walmart. Lets be really generous and say uncle
Wally is paying them $10 an hour. If they are lucky enough to get 40 hours a
week that comes to a grand total of $400 a week - minus social security,
medicare and state unemployment taxes - which everyone pays. So lets be real
generous, that leave $350 a week to feed, cloth, house, and provide
transportation. Your question, why is an additional $50 a week such a big deal?
You do the math. You tell me what kind of a home you can provide on 30% of
your income - $400 a month - plus utilities.Real World, Real People.
401(k)s have failed Americans' retirements in exactly the same way
vegetables have failed Americans' diets. Give. Me. A. Break.
Ridiculous to say 401's have failed, what kind of spin is that?
Most of us don't know how much we are paying in service fees. When will
401k fees be easily available and understandable? If that were to occur, there
would probably be a big shake-up in the 401k business.
3grandslams - 401k were to be the replacement of retirement packages that many
companies offered their employees as a reward for years of dedicated service.
It was the norm for the generation before us. You worked for company X for
30-40 years, you were rewarded by having a retirement income for your last 10 to
15 years.As the contract between employee and employer began to
crumble at the edges, corporate America pushed this concept of 401k plans where
the company would co-contribute to an employees retirement, taking this
liability off of their balance sheets. It worked great when times were good.
Companies matched, some like mine donated regardless if I contributed a single
cent. But when times got tough, these plans became too expensive, and many cut
back or even eliminated their side of the contribution. If companies not afford
to contribute, surely it became difficult for employees to contribute as well.
Some firms stayed by their commitments, like mine, and continued to
contribute.But the fact is, many have reduced their portion or
matching, and thereby, yes, these plans have failed. They have not matched what
they were to replace in company provided retirement plans.
The United States version of capitalism has its flaws and this is one of them.
How a society cares for its elderly citizens is a defining reflection of the
ethics of that society. Our country chose to borrow from its system of social
security to pay for other interests. In doing so, we have failed as
capitalists. Social Security should be self-funded. People put in,
people take out upon retirement. We simply must find a way to make the system
work without increasing the retirement age. The Romney plan to increase the
retirement age is not based in reality. Bodies break down. Older people cannot
do the physical labor they once did. The 401k is a supplement to
most savers' retirement. Very, very few people make enough money to be
able to save enough to retire on. Social Security money has been taken from our
checks for 30+ years for that very purpose. The money was ours. We earned it.
The money has been taken from us by our government. That governement must now
live up to its promise to fund our retirement. In full. On time. This is not
401K rules and regulations PREVENT me from contributing over 4% of income to my
401K.Yes you read correctly.I work for a fortune 500
company listed on the NYSE. We have alot of employees in our company...about
50000 or so. Many of them make wages in the teens. As a result of limited
participation in our 401K by those lower income employees 401K regulations limit
my ability to contribute.What a stupid regulation!! Our government
is so ridiculously idiotic it blows my mind! Do they want me to be dependent on
govt income during retirement? Do they want me to be poor when I am old so I
have to rely on Medicaid?Here we have a tax free contribution option
and their regulations prevent me from contributing more than 4% because it would
be "unfair" for me to be able to contribute more than lower income
workers.Once again. Dumb politicians and government regulation with
good intentions for "fairness" only create more problems. I
am just over the income threshold to get a tax break on IRA's too. So
anyting I do has to be after tax savings.Our govt works overtime
creating roadblocks for people.
30-some years ago my wife and I bought a business. Inexperienced as I was, I
thought we would pay off the contract and have plenty of money from appreciation
when we sold at retirement. So we put what we should have saved into building
the business.Due to several factors, we sold well before retirement
and didn't recover our investment in growing the business. There went our
retirement.I went to work for a large company that had a retirement
program. After 6 years, our retirment was frozen and vested and a 401(k)
initiated. An accountant friend suggested we save 10% a paycheck. The company
matched a portion of it.Looking at my balance this morning, my wife
and I are WAY ahead of the average 401(k) balance in a relatively short time.
Even starting late pays off. And I started at pretty low salary.People failed the 401(k). You can't take out what you don't put in.
To "Anti Government" you must really be earning a lot. 401K limits are
around $17,000 per year, and a Roth IRA can allow you to save another $5,000 per
year for you, and another $5,000 for you wife (if she works at all). So, if you
can only save 4% of your income, that means that you are earning over $400,000
per year. With that sort of income, why are you not investing your money into
realestate, stocks, or mutual funds. Yes you may have to pay taxes, but why
should you limit your retirement savings based on how much you can deduct from