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Ever tried to 'actively manage' a 401(k) account?
Las Vegas Review-Journal ^ | 08 feb 09 | Vin Suprynowicz

Posted on 02/08/2009 8:12:37 AM PST by rellimpank

Last month, Los Angeles Times columnist Tim Rutten penned a column on the recent tumble of the nation's 401(k) tax-deferred retirement accounts.

(Since October 2007 our 401(k)s have lost a third of their value -- a cumulative $1 trillion.)

"There's been little discussion of the way in which this economic implosion has exposed the utter failure of the now-ubiquitous 401(k) retirement accounts," Mr. Rutten offered. "In fact, the entire 401(k) system looks increasingly like the sort of bait-and-switch con relished by the Bernie Madoffs of the world."

The problem, according to Mr. Rutten, is that "in 1978, when Congress amended the Internal Revenue Code to include Section 401(k), it envisioned the provision mainly as a way for workers to supplement their companies' traditional defined-benefit pension plans and Social Security. ...

"Nobody at the time envisioned the 401(k) as something on which people would rely for their retirement. But in the years that followed, more and more employers began to look for ways to get out of funding the pension and health plans that, up to then, had been regarded as part of the responsible capitalist social contract. ...

"Nobody bothered to ask employees whether they wanted to swap their pensions for choice or ownership, nor did anybody stop to notice that very few people are suited by background, ability or temperament to actively manage investments.

(Excerpt) Read more at lvrj.com ...


TOPICS: Constitution/Conservatism; Culture/Society; Government; News/Current Events
KEYWORDS: 401k; guns; retirement; retirementfunds; rkba; seniors; suprynowicz
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To: A message
It's hard to lose money by directly ( buying the land title) investing in suburban, or close in rural, farm land.

It will never drop to zero and you can rent the land for farming for more than enough to cover taxes.

The figures for farm land values in the area are easily found, and if you can buy at mid level or less, you can't lose money. The value will go up to cover inflation, and in the next building boom you may make millions selling to a developer.

41 posted on 02/08/2009 9:28:25 AM PST by Beagle8U (FreeRepublic -- One stop shopping ....... Its the Conservative Super WalMart for news .)
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Bump


42 posted on 02/08/2009 9:30:42 AM PST by rawhide
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To: ak267

You can thank your parents (and my parents also) for the miserable state of private sector pensions. Of course, you can thank the rats for demagouging on this issue until it is too late. The role of the greatest generation in this mess is crucial. Without the greatest generation rewarding rat demagougery, the retirement mess could have been fixed long ago. For the most part, the greatest generation has been content to get their lucrative Social Security benefits (low tax rates when working and increased benefits when retired).

The baby boom generation is to blame in not confronting the greatest generation. The baby boom generation has been complacent with many indicating that they do not think Social Security will be there. This complacency is dangerous. The problems with Social Security (and Medicare even more) are far worse than not being there. No politician can vote to reduce Social Security and Medicare. The baby boom generation has paid enormous sums into both programs. Thus, Social Security will be reduced indirectly through negative impacts on the national (and perhaps world) economy). I believe that we are risking a collapse of the world economy over entitlement promises.


43 posted on 02/08/2009 9:36:47 AM PST by businessprofessor
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To: rellimpank

“Or, hidden away in the bond funds, a whole bunch of mortgage-backed securities — you know, the “safe” stuff — ...”

Does that mean if our bond fund has FNMA listed in the portfolio, it is holding a mortgage-backed security? And should we then be very concerned?


44 posted on 02/08/2009 9:37:00 AM PST by Abigail Adams
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To: listenhillary

Your employer’s plan usually gives you a choice of something like 12 max mutual funds that you can move your savings between.

A company like Fidelity would have several hundred mutual funds you could move your money around in (including a gold fund.) And of course, you can always move your money to another company if you didn’t like Fidelity’s results. Something you can’t do with an employer plan.

Everyone did bad in 2008, so pointing out that certain Fidelity funds did bad as well isn’t really news. (No, this is not a Fidelity ad, I just used them for an example.)


45 posted on 02/08/2009 9:43:31 AM PST by Brookhaven (The Fair Tax is THE economic litmus test for conservatives)
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To: Mr. Jeeves
>>>Much of it never existed. It was a false prosperity based on inflated asset values <<<

But someone had to sell when those values were high, right? For example some people sold Fannie Mae (FNM) at its peak and made profits. Where did that money go?
46 posted on 02/08/2009 9:43:51 AM PST by Kid Shelleen (Barack the Messiah: Never in the field of US politics have so many waited so long for so little.)
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To: silverleaf
“Just look at how well they are managing our national budget. and social security.

Hey, ss must be well managed, the checks keep arriving- right?”

Exactly. At the state level, California is now distributing I.O.U.s to those of us who should be getting a refund check. How long before this happens on the national level? The gobermint is full of fiscally negligent idiots.

47 posted on 02/08/2009 9:46:24 AM PST by 444Flyer (Don't beLIEve Obama..................Repent Herod!................./Tom McClintock 2012!/)
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To: 444Flyer

I hope you bumped up your exemptions to stop witholding and plan to pay next year’s taxes back with that IOU!

Stay safe in California. The whole state makes me very sad.


48 posted on 02/08/2009 9:50:47 AM PST by silverleaf (Fasten your seat belts- it's going to be a BUMPY ride.)
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To: CRBDeuce

We have our 401K and profit sharing funds managed by a small firm. We are only down 0.3% in 2008. Very good. They use these types of vehicles for our trading.


49 posted on 02/08/2009 9:53:23 AM PST by therut
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To: Brookhaven

I think I have close to 100 different Fidelity funds through my work 401k.

The original poster was saying to make it simple by using the “pick a retirement date” fund. I was pointing out that it wouldn’t have helped much.


50 posted on 02/08/2009 10:04:24 AM PST by listenhillary (Rahm Emmanuel slip - A crisis is a terrible thing to waste.)
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To: rellimpank
A company has to pick an adviser to manage its employees' 401K plans. Any responsible company should insist that the adviser periodically (once a year would be about right) send representatives to the job site to meet with the employees, give them basic information about the plan, including the investment options, and answer any questions the employees might have. The adviser should also have a user-friendly web site where an employee can review account balances and change investment options. If an adviser can't or won't provide this level of service the company needs to find a different adviser. This is a very competitive industry, and there is no reason for a company not to take advantage of that.

I am also of a view that high schools should offer courses on money management, banking and investing. These are basic life skills that kids ought to be exposed to and ought to be thinking about.

51 posted on 02/08/2009 10:13:02 AM PST by blau993 (Fight Gerbil Swarming)
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To: SanFranDan; marshmallow; abb
If newspapers wanted to serve their readers rather than lecture to them about liberal sensitivities, they could do some stories on managing 401K's.

Both local papers took out Mutual Fund tables - they said the information could be found on the internet. That's true of sports scores too - but for reason that have to do with "journalists enjoy sports - but most can't do math" - the decision was made...

52 posted on 02/08/2009 10:14:31 AM PST by GOPJ (What's caused 19 deaths, makes travel difficult, and won't melt til April? Global Warming.FR:Dentist)
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To: silverleaf
“I hope you bumped up your exemptions to stop withholding and plan to pay next year's taxes back with that IOU!”

Sure did Silver. I've always had my deductions positioned so that I get a very small amount back every year. I've always paid my taxes on time and now I'm getting punished by having the crooks hold back what is owed to me. Doesn't make a difference if it's $5 or $5000, what is mine is mine and if I didn't pay what was owed (like what appears to be a good percentage of Obama’s nominees) I'd get penalized or go to jail for tax evasion. Yet, I'm asked to accept an IOU. I may need to take them to small claims court to get my refund.

“Stay safe in California.”

Thank you.

“The whole state makes me very sad.”

It does me also. What I fear is that the entire nation is being made in the image of California under Obama and his stooges.

53 posted on 02/08/2009 10:15:08 AM PST by 444Flyer (Don't beLIEve Obama..................Repent Herod!................./Tom McClintock 2012!/)
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To: SanFranDan

...but as the column points out, if all of your contributions get funneled into s****y funds in a market that is especially unfriendly to banks, how is that possible?


54 posted on 02/08/2009 10:16:12 AM PST by dr_who
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To: rellimpank

This idiot seems like one of those who believed that Bill Clinton discovered the secret to eternal prosperity by “spreading the wealth around” through cheap home loans for all.


55 posted on 02/08/2009 10:45:59 AM PST by Rockingham
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To: rellimpank

Amen. The people complaining about the 30 to 50% haircut they took on their retirement account balances were not complaining when their accounts were going up 10, 15, and 20% a year. If they were middle age and had 80 to 100% in stock based funds, they were stupid and have no one to blame but themselves for their losses. They should have used the money market or fixed interest account option in their accounts to manage risk. Did they realistically think that the stock market goes up every year and never has severe declines? Unfortunately, it does and these people were clueless as to how to manage their retirement accounts.


56 posted on 02/08/2009 10:49:47 AM PST by reaganbooster
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To: Kid Shelleen
But someone had to sell when those values were high, right? For example some people sold Fannie Mae (FNM) at its peak and made profits. Where did that money go?

To their checking account if they were smart. To GM stock if they weren't.

57 posted on 02/08/2009 10:49:57 AM PST by AmusedBystander (Democrats' new lament: I voted for "hope & change" and all I got is "shuck & jive".)
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To: ak267

The 401K ‘benefit’ basically eliminated the defined pension plan in the private sector with few exceptions. It saved employers a ton of money and eliminated long term retirement benefits as a liability - except for union workers. Governemnt employees at all levels continue to have defined benefits plans - basically, an annuity for life with no one in government willing to step up and change the system with all of them on the system, big time.

So, it’s bound to happen - 401K funds will disappear or have disappeared even if low risk assets were involved - we are all on our own in the private sector when it comes to retirement. The smart thing to do is work for the government and with that being the smart thing to do - we are all screwed.


58 posted on 02/08/2009 11:45:23 AM PST by unique
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To: rellimpank
"There's been little discussion of the way in which this economic implosion has exposed the utter failure of the now-ubiquitous 401(k) retirement accounts," Mr. Rutten offered. "In fact, the entire 401(k) system looks increasingly like the sort of bait-and-switch con relished by the Bernie Madoffs of the world."

These Marxists are getting quite bold these days.

59 posted on 02/08/2009 12:42:06 PM PST by TheThinker (Shame and guilt mongering is the Left's favorite tool of control.)
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To: TheThinker

Obama’s goal is to unionize 30% of the work force, the bottom 30% under the SEIU, which seems to be an acronym with two meanings, the original, Service Employees International Union, the other is the State Employee International Union. They are one and the same. State employee unions work under government contract, and have a government funded pension, separate from Social Security. My guess is that Obama has plans for the social security system that he hasn’t told us about, yet. Maybe that talk about the government taking over the 401Ks is part of that plan.


60 posted on 02/08/2009 12:50:06 PM PST by Eva (CHANGE- the post modern euphemism for Marxist revolution.)
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