Ignore Thom's advice on 401k's

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Please, anyone listening, regardless of what you are promised at retirement, do deposit money in a 401k or IRA if you have the chance. Many company's will even match your contribution up to a certain amount. You will not find a financial advisor or tax accountant that will not say this is the best investment for your future you can make. If possible get the tax free Roth version as we all know down the line we all are going to be taxed at a higher rate than today. Your individual plan can be held in a great variety of ways including real estate, gold, stocks and bonds, or banks and credit unions.

Thom is doing a great disservice to himself, and anyone listening, to this irresponsible and incorrect advice on this or any investing topic. I had a middle class income for over 45 years and deposited as much as I could the entire time. I have now reitred with more money than I will ever need. The plus side is, my kids will be covered if the government does not come to steal it first.

Your ignorance is no excuse Thom. Please stop giving investment advice to anyone over the airwaves. You are not qualified.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

Comments

In the context of stolen pensions, the alternative pushed was the 401K, a much less desirable pension alternative. If you can fill it with stuff other than stocks, it might have some security. But, the point is that it is a step away from pension integrity on the part of business, and you had better know your boss and hope that the next Romney is not there to sack it.

drc2
Joined:
Apr. 26, 2012 11:15 am

Believe me the 401 is a much more desirable form of retirement alternative than a pension. It is owned by you. It is far more flexible with respect to investing options. It moves with you if "Romney comes in to steal your money". It can be passed on to your children for their retirement without penalty. Hartmann has railed on for years about the stock market and "banksters". It is well known that he invests nothing in these venues. If he really believed in Obama he would have dumped all his money in the market in 2009 and enjoyed a 40% increase in his wealth. Ignore him I say.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

The stock market is glorified gambling.

If you can't afford to lose it, you have no business "playing" the stock market.

401k/IRA's should be only ONE form of preparing for retirement.

delete jan in iowa
Joined:
Feb. 6, 2011 11:16 am
Quote jan in iowa:

The stock market is glorified gambling.

If you can't afford to lose it, you have no business "playing" the stock market.

401k/IRA's should be only ONE form of preparing for retirement.

Following that advice will cause you to put everything at risk and you will eventually go broke or let the world pass you buy.

Please list one economist or financial planner that subscribes to that theory.

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Redwing
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Jun. 21, 2012 4:12 am
Quote Redwing:
Quote jan in iowa:

The stock market is glorified gambling.

If you can't afford to lose it, you have no business "playing" the stock market.

401k/IRA's should be only ONE form of preparing for retirement.

Following that advice will cause you to put everything at risk and you will eventually go broke or let the world pass you buy.

How can what I said put "everything at risk"......

How will I go broke? My advice is use a balanced approach and diversify and not to "gamble" if you can't afford to lose.

So what if I let the "world pass you buy." I won't suffer from the market being dominated greedy unethical amoral speculators creating artifical bubbles.

My money is safe and doing quite nicely, thank you.

delete jan in iowa
Joined:
Feb. 6, 2011 11:16 am

I believe the last crash did severe damage to lots of 401k plans. You get to take the shreds with you, but not the "guaranteed contract" pension, huh? You have justified stealing pensions in your argument. That should have been criminal instead of business as usual. What that leaves us is the dregs, not the good stuff.

Depending upon Wall St. for our retirements is worse than playing the tables in Vegas. At least the Casinos are run very scrupulously with full disclosure, etc. Would that Wall St. was as clean as Vegas.

drc2
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Apr. 26, 2012 11:15 am
Quote drc2:

Depending upon Wall St. for our retirements is worse than playing the tables in Vegas. At least the Casinos are run very scrupulously with full disclosure, etc. Would that Wall St. was as clean as Vegas.

Also in the Casinos you get a good show, lots of food and drinks, and a smile while they take your money.

delete jan in iowa
Joined:
Feb. 6, 2011 11:16 am

[quote=drc2]

I believe the last crash did severe damage to lots of 401k plans.

Depending upon Wall St. for our retirements is worse than playing the tables in Vegas.

[quote]

If you did not sell anything the last "crash" did not effect you. The market is right where it was for the most part in 2008 other than a quick spike, which it also did a couple of months ago around Dow 13,500. What you did lose if you were 100% market invested, is the interest you would have earned. A very small number in today's world. All of your deposits between 2008 and now have appreciated nicely.

My point is NOT to have all your eggs in one basket. Diversify and take a lower overall return but insuring more security.

Where do you think Pension plans put their money? Their losses will not guarantee your pension 100%. Nothing is perfect, but I want to have control of my own retirement money, not trusting someone else to promise me a return. You do what makes you happy. Just be aware of all your options.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

The biggest difference is that pensions give you a guaranteed income til yiou die.

The 401K will last until it runs out of money.

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Erik300
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Apr. 2, 2010 9:44 am
Quote Erik300:

The biggest difference is that pensions give you a guaranteed income til yiou die.

The 401K will last until it runs out of money.

You and Thom are both uninformed as to the financial choices out there. There are a couple of dozen ways you can guarantee your monthly income for life using your OWN money. Even if you exceed the amount you started with. In some of those you may not even touch the principal which can be passed on to your heirs depending on your monthly needs. A young age can be your friend.

BTW Thom, the annual 401 deposit is NOT $6000. It can be as high as $22,000. Once again. Get your facts straight or stop giving advice.

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Redwing
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Jun. 21, 2012 4:12 am

What was the median balance in all IRA's and 401k's before 2008? $4,000? That system just isn't working, period.

Some 401k programs are absolutely crappy, you know this. Account Maintenance Fees for Money Market accounts paying 0.25% interest? Seriously?

chilidog
Joined:
Jul. 31, 2007 3:01 pm

Don't give me the Thom Hartmann crap line "you know this" I don't care what you do for retirement. If you don't have enough responsibility to take care of yourself that choice is yours to make. I resent those that make zero effort to try, and now want others to pay for their own mistakes. The line for living in Europe, or any of the other countries that Thom Hartmann thinks are a better place to live, forms to the left.

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Redwing
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Jun. 21, 2012 4:12 am

Per the IRS web site

The limit is $16,500 for 2011 and $17,000 for 2012.

http://www.irs.gov/retirement/participant/article/0,,id=151786,00.html

Where are you getting 22,000 from

millwood's picture
millwood
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Dec. 27, 2011 12:57 pm

People over 50 are entitled to add another catchup of $5500 to their contribution. The total for 2012 is $17,500.

Read and do this today.

I am still waiting for someone to list a credible economist to tell us this is a stupid idea. I highly doubt you can find one.

http://www.cbsnews.com/8301-505146_162-39640994/higher-401k-contribution-limit-in-2012/

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Redwing
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Jun. 21, 2012 4:12 am

Who do you thing is a credible economist?

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millwood
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Dec. 27, 2011 12:57 pm

Come up with any economist or financial planner that does not support this form of retirement investment vehicle.

Thom should already know this if he is as generous an employer as he wants others to be, he must have set up employer matching funds for his employees contributions as Bain Capital did with many of the companies they bought.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

You mean this Bain

"During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission."

http://www.washingtonpost.com/business/economy/romneys-bain-capital-inve...

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millwood
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Dec. 27, 2011 12:57 pm

For me to try to educate you as to what Bain actually did with failing companies would take far too much of our time and is off topic. Good, bad, or indifferent, most of those companies would have ceased to exist at all without an infusion of capital from somewhere.

Let's just stick with the original premise that stated I believe people need to start taking responsibility for their own retirement by saving at an early age and capitalizing on any matching funds offered by their employeer. They will be well rewarded for doing so.

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Redwing
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Jun. 21, 2012 4:12 am

There's no question that IRA's, Roth IRA's, 401k's, 403b's, etc are all terrific vehicles to accumulate money. For those who have money. And who are savvy enough not to rely on the crap that passes for business "news" or stock market "analysis."

Even you say that the stock market has returned 40% since 2009. I don't know what dates you're using, but from the 2009 bottom to the 2012 peak the DJIA nearly doubled. Of course you really have to have your ear to the ground to predict what the central bankers in the USA and Europe have in store. I've never seen indexes gap up and gap down on miniscule volume so many times as in the last three years. This is not a trader's market. This is trillions of dollars sloshing around trying to gain 0.0001 percent gains.

Here's a PDF file from 2001: I'm guessing the updated numbers are worse

http://www.taxpolicycenter.org/UploadedPDF/1000599_TaxFacts_020204.pdf

"The typical household nearing retirement age has
relatively low levels of DC and IRA assets. In 2001, the
median value of those assets was only $10,400. Excluding
the 36 percent of households who have no IRA or
DC pension, the median balance for this age group is
$50,000."

chilidog
Joined:
Jul. 31, 2007 3:01 pm

Quote Redwing:

Believe me the 401 is a much more desirable form of retirement alternative than a pension. It is owned by you.

True, but the value of the IRA depends on the market. And this market has been artificially pumped up by... IRAs. Gee! The stock market was virtually flat for a quarter century before IRAs were created. It was then the market began to rise. Why isn't this a Ponzi Scheme?

So all those Boomers looked at their portfolios and thought they were doing well, but their money was gone... and the value of the IRA was based on the a few percentage of stockholders cashing in. If everyone tried to cash in, the price of the stocks... and the IRAs based on those stocks will also drop. So what will happen when the Boomer demographic starts to cash in and there aren't enough buyers to keep stock prices propped up? What happens if the IRA tax deduction is abolished? And what if you outlive your IRA? Are you going to go back to work at 85? And what if the market is down when you plan to retire? Then what?

Seems a defined benefit pension offers more security.

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Pierpont
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Feb. 29, 2012 1:19 pm
Quote chilidog:Even you say that the stock market has returned 40% since 2009.
Not sure about the number, but if true, it's only for the stocks that were sold. The bigger question is all those that haven't been sold. What happens when Boomers cashing in start to flood the market? All it takes is a change of a couple percent where sellers outnumber buyers to see prices drop. These people... and I include myself in that, have pieces of paper telling us what our accounts are worth based on a small percentage of sales.

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Pierpont
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Feb. 29, 2012 1:19 pm

You do you think the only venue for a 401 is the "Stock Market Banksters" ? Stop listening to Hartmann and look at your other options. Some talking heads promote buying gold. Others, real estate. Fill in the blank. You can even put in Thom's favorite, your local credit union. The point is, do it for yourself. God, most of you people are ignorant of your options.

Redwing's picture
Redwing
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Jun. 21, 2012 4:12 am

Quote Redwing:God, most of you people are ignorant of your options.

My only point is there's no free lunch. We should not expect retirement security to be built on government created IRAs or other market Ponzi Schemes. All your "options" are based on the hope all variables will remain the same. I think that's foolish. Sue me!

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Pierpont
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