Trump's last-second swipe at Obama retirement rule.

Market Watch ^ | 03/21/17 | Mitch Tuchman

[FreedomNotSafety]

My point is whether anyone agrees or disagrees with the law is utterly irrelevant. There should not be a law.

[Beernoser]

“3 adivisors flew in each from a separate city to my IT shop in the IL cornfields to pitch 401k plans to us 15 consultants in one consulting firm. Each played a different role they claimed was mandated by law.

I asked the first advisor how much his fee was. He answered 0.9% and you know what they say, if it starts with a zero, it is good.

Then I asked the 2d advisor the same question. He also answered 0.9%. And the 3d advisor 0.9%. This was in addition to the 2.5% charge of the T-Bill Fund they were selling and 4.5% charge of the cheapest mutual stock fund they were selling.

So the stock market would have to do 7.2% for me to break even. I didn’t like that option and took a pass on the 401k.

Previously I had been suckered into precisely that situation, and that was a no-load, low-expense ratio fund. Even though my mutual fund did well, the expenses and stupidity of the 401k middle men resulted in less money in my fund when I turned 65 than had been subtracted from my paycheck.”

My guess is that this was a very long time ago because so much of this information is unrecognizable by me, who sets up 401 k plans for companies.

1. I haven’t seen an A share 401 k in over 10 years. A share funds are the ones which charge up front sales charges. They use breakpoints and for a 401k plan, the whole group is aggregated for breakpoint purposes so once the company has $ 1 million there is no sales charge. To pay 4.5 % the whole plan would have to have less than $ 100,000.

2.Advisers getting .9 % is very generous. More normal is about a third of that number. Also the adviser may get less than half of that depending on what percentage split his company gets.

3. I’ve never seen a T-Bill fund that charges 2.4 % as a management fee. The average A share stock fund charges about 1.1 % and bond funds are significantly less.

4. Even assuming everything you said were accurate, the 7.2 % number you gave would be for one year. You don’t pay an A share sales charge every year. It’s a one time charge.

[spintreebob]

The 401k that suckered me took money out of my paychecks 87-93. I cashed it out at a market mini-peak in 2006. Total I put in was 8 or 9k. When I changed employers, which consultants do all the time, I had to roll over to IRA. The middle men on the 401k side took big bytes out of the roll over, plus they did lousy timing, sitting on my roll over request for 11 weeks before doing it. No complaint about the no load fund out of Kansas City, which did moderately well.

In 2008, different consulting firm, the 401k menu was all load funds. The T-Bill fund was the lowest at 2.5% per their own literature. They verbally admitted their fees were on top of the load, and off the front end, so for every dollar out of my pay check, only part was invested.

My story is typical of about 20% of employees. Those who sell the product, and of course, the regulators who require the middle men “benefit managers” and other fancy titles, do not want to admit the reality.

There are many of us who are senior citizens and have no savings, not because we failed to put money into investments, but because the investments encountered risk and we lost.

There are many of us who do not understand money. Our churches taught that money=the love of money=evil. We practiced “take no thought for the morrow”.

So there is a problem in our society. But the funny thing is that there is zero that the government can do to solve the problem.

Some churches have seen the problem and shift to preaching the prosperity gospel. Those of us not in those churches love to make fun of them. But the reality is that they do improve parishioner’s wealth.

For example, FReepers loved to make fun of Creflo Dollar and his need for a new jet plane. But the reality is that Creflo Dollars have done more to turn poor people into middle class than all the money spent by the Great Society.

[Sequoyah101]

The IRA 401 scam is the biggest divide and conquer theft ever to fleece the employee.

Before we had purchasing power via retirement managers. Now, nothing. People have been thrown to wall street and they have had a feeding frenzy with the retirement earnings of the sheeple.