The problem I see is that we all kinda got used to 401K situations and don’t see ourselves just dumping it. I don’t see any vehicle that they’ve offered that really beats the 401K. I certainly won’t admit that 401K perfect, but I’ve been doing it twelve years now. It makes sense and most of the rules are ok, although I’d like to see a minor change or two.
These guys may sit around and talk this up on Sunday chatter shows...but I think when they sit down in front of real folks...and their explanations for a alternate plan just don’t work...the idea will drop right there. We’ll all laugh about the chat and talk...and how the Obama plan simply fell quickly in the first 100 days.
Buy High!
Sell Low!
What struck me was the ever common 1/3 - 1/3 - 1/3 split in just about everything.
The more important (of the past) and least known nor remembered was the 1/3 of Americans that supported and fought for Independence ... waaaayyyy back there in ancient history .. 1776 and beyond.
The dumbest thing you can do is to stop contributing based on current market conditions. Now is the time to start contributing.
For those who have already built a sizeable nest egg, I would suggest considering playing defense. I recently put half my retirement into TIPS (Treasury Inflation Protected Securities). The return is not sexy, but it as bullet proof as anything you will find out there (including gold in my opinion). I am projecting that my true wealth in these TIPs will approximately double in 22 years (when I retire at 67). Of course the feds could mess with the CPI(U) used to calculate inflation or default, but I am not sure the stock market would survive a default either (then gold in the mattress would be the best option - not pieces of paper). I see inflation taking off like crazy because Obama is going to need to print lots of money to make his constituents happy.
The other half I plan to keep in equity or cash moving back and forth with the market (for example I recently put back about half of what I had pulled out during the fall at about 120 points lower in the S&P 500 than when I had pulled it out). I am still down 15% for the year, but it could have been a lot worse. I have an S&P sell point in mind in which I will pull even more off of the table.
As far as the recent discussions on what to do with the 401(k)s. Moving forward I suspect that they will dramatically limit the tax deductibility for medium and high paid employees and perhaps ensure that a balanced portfolio option is offered/mandated as the default choice (ie increasing bonds and short term as you get older). I think folks should take a test on finance before they are allowed to put their 401(k) money into equities and especially their company’s stock.
The funny think about pretax 401(k)s is that they are a good deal for the government (this is why Roth’s are becoming so popular). With the penalty on Social Security on high earners in retirement, the Fed probably gets back more than what was protected.
Those who were within 10 years of retiring that were heavy in equities before the crash were absolutely insane (or uninformed).
If has gone down before during at least three or four times that I can remember and has always returned.
The people who own and run the left wing Democrat party are all Billionaires so they will not allow the market to continue down.
Bump for later.
I’ve already stopped contributions and I’m now contemplating taking enough cash out of my IRA’s and 401K to become debt free. Even paying the penalty and the tax on the money I withdraw isn’t a big concern to me. Obama potentially nationalizing my 401 is my biggest concern.
401Ks are a great deal - under todays rules. But the Dems are already talking about “confiscating” (not their word) your 401k and turning it over to Social Security. Billionaires don’t need 401Ks, only the middle class. I wouldn’t be suprised to see some form of socialist redistribution of 401ks from those who “can afford it”.
This is propaganda trying to gin up support for the government take over of private 401Ks.
That and the Democrats and Obama have promised to raid 301(k) accounts.
That and the Democrats and Obama have promised to raid 401(k) accounts.
An ancillary benefit to the Left of the contrived financial meltdown is that it will kill any talk of privatizing Social Security.
I also wonder if George Soros biography is truly as presented or if he is being funded by foreign governemnts with a veneer of legitimacy.
“could be rewarded with a fatter nest egg for their retirement, experts say.”
That Big Brother will eagerly confiscate “on behalf of the common good.”