The last 401K Generation

(Reuters) - Will the baby boomers be the only generation to retire with 401(k) plans? It could happen.

Last week many of the nation's biggest thinkers on retirement got together in a Senate hearing room to discuss the future of pensions and retirement. There were representatives of unions, employers, financial services providers, government agencies and consumer groups. And the only thing they all seemed to agree on was this: The 401(k) plan has been sort of a failure.

Those are strong words, and probably overstate the case. Current and future retirees now have some $4.3 trillion for retirement that wouldn't be there if it weren't for their 401(k) and other defined contribution accounts, so it's hard to declare them a complete failure. . . .

One type of policy proposal would divert 401(k) funding (either prospectively, or, in some cases, using existing assets) to buy into more pension-like plans. Hank Kim of the National Conference on Public Employee Retirement Systems is proposing that states, already used to running efficient pension plans, could run private pensions for small employers.

Plans advanced by a broad spectrum of experts, including Teresa Ghilarducci of the New School for Social Research, C. Eugene Steuerle of the Urban Institute and Richard Shea of Covington & Burling, would compel employees and employers to put money towards pension-like guaranteed plans. . . .

"Get ready. They are going to confiscate your 401k by forcing you to buy government bonds. If you have “too much” most of your money will be redistributed to people who didn’t save."

"...will be redistributed to people ~~who didn’t save~~ who are less fortunate."

There, fixed it for you...

Hank Kim of the National Conference on Public Employee Retirement Systems is proposing that states, already used to running efficient pension plans, could run private pensions for small employers.

This is because the pension funds running out of money. They have to get a new source of funding, so they are going to get your 401k money.

I’m not sure there would be enough time or warning to cash out a 401K if Congress passed a law changing the 401(k) rules to make them GRA’s. So if you think this will happen then get out now. If there is a penalty— Take it!. Otherwise you will lose it all anyway.

And on the other hand, I believe that the Market has come to rely HEAVILY on the bi-weekly infusion of cash from employees paying into their 401(k)’s. By law it has to be invested so that it has the “potential” to earn money. And the markets are the only real choice for that.

Take away that infusion of cash and the Markets are going to go into a tail-spin and they may not pull out of it in time to keep from crashing.

Nobody will read this.

1. Previous defined pension plans are a ponzi scheme

2. Most retired too early and will well outlive their pension plan contributions this is why almost all defined retirement plans except for the lucrative ones such as Exxon, are broke and the company will be bankrupt.

3. We live too long, a 30 year working career mostly can’t
fund a 40 year retirement

4. The money changers win, they take a lot out of managing 401s whether you win or lose

5. Hardly anyone has saved enough. You would have to save at least 25% of your gross income at a consistent rate of return in excess of 6% with no more than 3% inflation and no taxes on the saved amount or gain to fund a successful retirement

6. Most people will die penniless. We are headed for the largest geriatric indigent population ever seen.

7. The formula for retirement is really not very complicated but it is expensive and requires sacrifice while working and raising a family to fund it. There really ought to be a formula and a series of simple products for retirement yet most of the law forbids these. Why? The money changers don’t want there to be competition provided by a uniform product that people can evaluate, compare and buy. The money changers like the free-for-all confusion of individuals who are generally ignorant of how the system works holding mutual funds and common stocks. Remember, the money changers make money when you buy or sell and whether you win or lose.

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