Ever tried to 'actively manage' a 401(k) account?

Las Vegas Review-Journal ^ | 08 feb 09 | Vin Suprynowicz

[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.

[listenhillary]

The smart thing to do is work for the government

That seems to be the solution that is being offered. I'm pretty sure that has been tried before in some country or another. You are aware of the consequences reading your final words.

[Mr. Jeeves]

Where did that money go?

Back into overpriced stocks and real estate, which subsequently lost value. I suppose a few people sold at the top and bought gold or kept all their money in cash, but most just put it right back into some other investment that fell apart on them. It's like gambling - rather than taking their winnings off the table, a lot of people just doubled their bets.

[John Galt's cousin]

Thanks.

I am not impressed with Fidelity. I have had money (small to them, real to me) in accounts with them for years, and am not impressed.

that said, the fund you mentioned might be interesting. I will look into it.

thank you

[TheThinker]

One way or another they will kill the 401k plan. It takes too much control and payoffs away from politicians since retirement savings is an enormous percentage of Americans’ personal wealth.