Comments on: Why 401(k) plans will fall short for most Americans http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/ Fri, 05 Dec 2014 11:27:18 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: tonysam http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-9428 Sat, 05 May 2012 19:09:16 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-9428 There is nothing “crazy” about people who never paid into Social Security getting benefits, such as women who haven’t worked outside the home or the disabled, many of whom cannot work at all. Just so you know.

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By: silagan http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-8970 Fri, 13 Jan 2012 07:51:03 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-8970 I have made 900 bucks over 6 years with 38,000 in a 401k. I would have made more money at 1% interest in a money market account. Alley bank has a 1 year CD with .99 percent interest and this would have been compounded if I kept doing it. Therefore, I would have made more moeny in the bank. Inflation was 3.4% this year. Me and my husband make 100k together yearly. I believe we could live on just 38k very poorly. I found out I will need to have 105k when I am 65 to spend 38k a year. This is insane. Therefore, if I want to live to be 85 I need two million dollars, there is no way this can happen. Retirement is just a dream everyone is going to have to work until they die. Many old people now have social security and pensions. Even people who never paid a penny into social security are collecting (crazy). Our children and myself are screwed. There is no way we can save enough money. In addition America is going to go bankrupt so we could wake up one day and gasoline be 20 bucks a gallon because no one wants American money and our money will be worth nothing once we are bankrupt. The ONLY way to protect your money is to convert it to a different currency. I have not done it yet but thinking of doing it soon.

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By: johnwasik http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7822 Mon, 29 Aug 2011 00:14:24 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7822 The 401(k) promise? Market returns and the idea that it would be a mainstream pension plan. But you actually get neither because there are no guarantees, plenty of unhedged market risk and not even matching the market after fees. Only Warren Buffett is getting a decent deal: Guaranteed 6% preferred dividend in Bank of America in a near-zero yield world. I maintain that 410(k)s will never be adequate savings vehicles in their present form. Social Security can be bolstered. Raise the earnings cap. Then find some way to create a real savings account that’s portable, tax efficient and guaranteed to some extent.

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By: gruven137 http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7810 Sat, 27 Aug 2011 19:53:00 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7810 The 401(k) is the biggest scam devised against the American public since the creation of the FED in 1913.

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By: Bartolo http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7809 Sat, 27 Aug 2011 19:52:20 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7809 I don’t believe the trust fund will be “exhausted” in 2036; only that by then it will be able to pay somewhat less than the promised amounts. The last figure I recall is 75%.

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By: Eric93 http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7804 Sat, 27 Aug 2011 17:45:21 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7804 Totally absurd. I don’t know how they calculate that the SS trust fund will last till 2036 when a simple calculation on my own account shows that I’ve already used mine up, based on contributions, after only 6 years. Those of you in your 60’s can easily check this out by taking your most recent Social Security annual statement and adding up all the income shown over your lifetime which was below the annual cap and then multiplying by 0.10 (the average 10% total contribution of employee and employer) and then dividing that result by the monthly amount that SS says you will be payed. The net result is the number of months that you can collect if your account was treated as though it were an IRA account. This assumes that any interest that the government earned on your account funds was offset by inflation (which it was). If there is any money left in the account it can come only from two sources: 1) contributors who died before collecting much (or any) and 2) and excess of contributors over retirees. If the latter is the main source of the excess balance then this is a ‘Ponzi Scheme’. That’s how it works, folks.

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By: Tom_in_PA_USA http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7803 Sat, 27 Aug 2011 17:30:23 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7803 “A generation ago, retirement investing didn’t worry Americans because most had a defined-benefit pension plan”

Nonsense. Relatively few people had a good pension plan, and a large percentage of those who thought they did lost it when they changed jobs. The many problems with company sponsored pension plans is why everyone prefers a 401k. In addition, really good pension plans tended to bankrupt the company (can you spell GM?).

“Social Security provides the only low-cost, inflation-adjusted annuity on a mass scale. The system, however, is currently running a deficit and will exhaust its trust fund in 2036, according to the most recent Trustees/ report.

Financing can be bolstered through immigration reform, adding government workers to the system…”

Again, nonsense. Social security is very expensive for those of us who work. It’s already going broke, adding more people it will help how?

“This would be a new, universal savings account available to everyone that wouldn’t be tied to employment. It would be automatic and could be linked to an annuity.”

The annuity couldn’t possibly be better than what Social Security already provides; this is just another entitlement program to run out of funding.

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By: materialrisk http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7799 Sat, 27 Aug 2011 15:04:17 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7799 1. End tax deduction on 401k and others. This results in misallocation of capital.

2. End cap on payroll tax.

Doing these two will fix most of the problems.

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By: materialrisk http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7798 Sat, 27 Aug 2011 14:59:25 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7798 “The 401(k) doesn’t work on a large scale”

Exactly, It’s really simple.

higher the participation rate, the lower the expected return would be on the long run, to the point that you can only expect to get only your principle back.

The only way to mitigate that would be to have some people put in a lot more than they’ll ever get back. In other words, rich subsidize the poor.

This is why social security will never work because the payroll tax is taxed on only the first $100k, and even a billionaire would eventually get all his money back that he put in through payroll tax.

Spread this article to everyone please.

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By: amj http://blogs.reuters.com/reuters-wealth/2011/08/26/why-401k-plans-will-fall-short-for-most-americans/comment-page-1/#comment-7797 Sat, 27 Aug 2011 14:58:32 +0000 http://blogs.reuters.com/reuters-money/?p=19046#comment-7797 The reason pension plans are weak and continue to get worse is that top managements have their own guaranteed plans (approved by Wall Street) and they could care less what happens to their workers. Just like politicians in Washington if their fate was tied to the workers they would find better solutions to protect their own interests. The solution is simple. Workers and executives should be in the same pension plans (add Congress to Social Security) without exception. The 401(K)scam worked only for Wall Street and should be abolished. The only reason defined contribution plans have been decimated is that Wall Street found easy money to loot with Mergers and Acquisitions which have added very little value over the years. You split up AT&T for a few years and then put it back together. Who benefits? Not the workers and not the economy or society. Same goes for all mergers and in every case pension plans are looted and then eliminated. Who is watching? It used to be that what was good for GM was good for the country but that is not true with Wall Street! America needs patriotic corporate leaders that do not ignore their corporate social responsibility. Mergers and Acquisitions should be illegal period. They are the root cause of the destruction of our pension system and diminishing employment opportunities at all levels. Just look at the destruction of Middle Management jobs in the Banking Industry. Now, we have Too Big to Fail and nobody can see any real value from the unending mergers that benefit only Wall Street and the CEO’s. Are we going to see any solution soon. Not very likely since they have the power to block any meaningful legislation that tries to restrain their scams. Just look at what they are trying to do with the modest Dodd/Frank! The own the Republicans and the whole talk about privatizing Social Security is just another scam to hand over the Trust Fund to Wall Street. Let market forces work unless they work against Wall Street.

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