Discussion in 'Financial Cents' started by Equilibrium, Jan 23, 2011.

  1. Equilibrium

    Equilibrium Monkey++

    We've always had them since they 1st were available and before that we had IRAs. We pretty much figured SS wouldn't be around for us or if it was.... it wouldn't even cover the basics. Now it's looking as if the 401k's aren't all that safe of an instrument particularly if they're ever taken over by Big Brother and I've been reading they've been eyeballing our money. Makes sense to me in the bigger scheme of all the money grabs going on.
    Does anyone have some 401k 101/retirement plans for dummies help to get me up to speed with options for managing them? With inflation and what looks like a grab of our accounts on the horizon.... it's kinda obvious we're going to want to take the money out as soon as we can without getting dinged but what's the point of contributing to them right now even with an employer kicking in if we could be using that money say.... paying down a mortgage?
  2. UGRev

    UGRev Get on with it!

    I am not trusting them. I lost 50% of my 401k in 2008. It took this long to get back most of what I lost and the market is now run 99.99% by super fast computers. The volume on the market is so abysmally small, that I'm not even sure it's sustainable or even worth it over all. So I am leaving what little I have in there because of the tax hit and any new stuff I am putting into other types of investments.
  3. Falcon15

    Falcon15 Falco Peregrinus

    Ditto. I have left the bare minimum in the account, and take my normal monthly investment and put it into other types of investments.
  4. mam14225

    mam14225 Monkey+

    I still add to my 401k but mainly to keep it active and keep my employer investing. I consider myself very lucky to even have a 401k offered.

    My largest concerns about the 401k are:

    -There are a limited number of funds to invest in (no autonomy), and I can't have idle cash in the account.

    -If I miss time a market collapse, that "money" is gone, possibly forever

    -Penalty for early withdrawal

    -Fund managers get rich (on my behalf), regardless of performance or honesty

    -What will the economy look like in 30 years when I am meant to cash in?
  5. Falcon15

    Falcon15 Falco Peregrinus

    A 401K is a Ponzi Scheme in a suit. The only people benefiting from the 401K is your broker and his employer. Not a single solitary person that I personally know who has invested in a 401K has any significant amount of money left in their account. Several upper level managers who retired from the Petro-Chem business in 2006 had to return to work in 2009 in order to make sure they didn't starve. Their 401K's you see, were worthless after the market crash. So after only drawing small amounts to pay for this and that, they lost the BULK of their savings/retirement.

    The fiat money FRN's you have invested in the stock market are not helping our economy, at all. They never will.

    Let me posit you a question:
    If you had a $5.00 bill in your hand and $5.00 in the stock market - invested in a 401K...which one could potentially assist the economy better? Watch out...it's a trick question!
  6. mam14225

    mam14225 Monkey+

    Right, I think a ponzi scheme refers to new money coming in goes to people cashing out (and mr. ponzi) and there was never a real investment. As long as you have more cash being deposited than extracted, it has the appearance of legitimacy. This most recent crash did involve a lot of fudged accounting (real estate etc.), so it might be viewed as a ponzi scheme.

    Sadly, I plan on trying to survive for the next 30 or 40 years, so i'm not able to preserve and warehouse 30 years of consumer goods, thus the 401k. It is just my prep for if the world doesn't blow up.

    I'm thinking lots of fertile land with water is the way to go.
  7. ghrit

    ghrit Bad company Administrator Founding Member

    Bingo. Go for the max that your employer will (and does) match, put the rest in property. Certain factions think that you won't own the land, but at least you can defend it, which you can't do readily with frns that someone else is watching for (or against) you.

  8. Equilibrium

    Equilibrium Monkey++

    Wow.... two diametrically opposed views....pull out leaving the bare minimum and continue contributing the max. I think I'm going to have to bite the bullet and schedule with our tax lawyer to see what she thinks. Ohhhhh how I HATE contributing to her billable hours.... less money for me to spend on my pantry.
  9. Falcon15

    Falcon15 Falco Peregrinus

    And if you think your money in your 401K is yours, look at the rates, fees, and early out penalties. Also, do you really understand Wall Street? Remember the Housing Bubble? TARP? Who do you think got the Federal (read:Taxpayer) money? If not for the penalties and fees, I would cut those sharks off completely.
  10. Equilibrium

    Equilibrium Monkey++

    "If not for the penalties and fees, I would cut those sharks off completely." My initial thoughts. There's this gift God gave us..... it's called intuition.... it's that back-ground music playing before something bad happens in a movie. There's a lot of "back-ground" music being played for me lately. Fear's a healthy emotion.... it's not an unproductive emotion like anxiety or panic. It compels me to scope out what's going on to the best of my abilities before taking appropriate action... if warranted. We've been contributing the max to these 401k's for a long time. I'm thinking it's time to adjust our 401k sails a little bit.... just in case.
  11. Witch Doctor 01

    Witch Doctor 01 Mojo Maker

    When you get your 401k to where you want it you can always change the risk level you want... I have 3 one increase over 30% whne the rest of the market was collapsing... ( moved to selectable stock options and purchased stock in major firearms and ammo makers)... i've done well with this mix... and i should probably thank many of you here for your help...;)

    Second is a portable fund which my employer contributes it's almost time to cash this one out.... yes i did tak a hit but i'm back where i was 2 years ago.... basically 2 years of my money spinning wheels.

    3rd is in a restricted fund that has been doing well and i'm slightly ahead of the high rate in 2008...

    My money is not growing at a great rate but it is growing... none of the funds have broker fees so other than market flux my $$ stays in one place...
  12. Equilibrium

    Equilibrium Monkey++

    "When you get your 401k to where you want it you can always change the risk level" We did that the 1st time the "back-ground" music started playing. I'm thinking it's time to re-visit our options by taking a long hard cold look at trade-offs associated with discontinuing contributions at the max and moving at least some of the money. It might not pan out but.... it's worth a closer look.
  13. mam14225

    mam14225 Monkey+

    Agreed.... and don't forget the massive bonuses, golden parachutes etc. And no, I don't really understand wall street. I also don't understand the internet, yet, here we are.
  14. Idahoser

    Idahoser Monkey+++ Founding Member

    I don't know if they all work this way but I get 1:1 matching up to 3% of my salary. That means it would have to lose 50% before I'm out one cent.
    There is also the goodwill with my employer who wants me to use it.
    If I completely lost that money, it wasn't wasted, it helped me keep the job.

    Also while it seems obvious to me that the system is doomed, I'm aware that has been true for generations, and we may survive a good while; It would be foolish to assume TPTB cannot fool everybody for another cycle and those imaginary dollars won't still buy real things for a few more years.

    If everybody agrees to keep believing the emperor has clothes, the party keeps going. We're nowhere near the real unavoidable end of society, we can keep this charade going for a good long while before the food runs out.

    Now I'm not putting MORE than that minimum for full matching, I'm putting the real retirement money into something else. Of course SS won't ever do me any good, it's my job to pay for my retirement. Past generations understood you save for that. They saved dollars that were backed by something. I'm just bypassing the intermediary dollar.

    Investing has never been the right thing for most people. They saved. Just save something that doesn't inflate. That of course is no longer paper money.
  15. UGRev

    UGRev Get on with it!

    none of that matters. They could put 2:1 in there and you WILL lose money if the investments they are in lose value.. period.
  16. Idahoser

    Idahoser Monkey+++ Founding Member

    I'm not sure what point you're trying to make. If I put in $100 and the value drops 50%, there's still $100 there. Because my employer gave me $100.
    Inflation is coming. The numbers will go up, if not the purchasing power. It's free money as long as it stays there. It does me no harm and does me good to leave it there.
  17. Falcon15

    Falcon15 Falco Peregrinus

    OK point - it is NOT free money. The monies that a corporation/employer puts into your 401K is a tax deduction for them, but it is not a wash. They are still on the losing side of the equation. Therefore this factors into how much money they can afford to give in pay raises, profit sharing, and other benefits. The bottom line is, it is not free money. It is skimmed from other portions of the company's bottom line in other cuts to other benefits/salaries. Also this dollar amount has to be accounted to any stock holders the company may have. If the company is performing at a loss, jobs get cut. It is that simple.

    I'd rather take what they would have contributed to my 401K as a raise, pay taxes on it and invest the remainder in physical things like preps. Yeah, like THAT will happen.
  18. UGRev

    UGRev Get on with it!

    You still lost 50% dude. You're just not considering that employer added 100.00 as your $100.00, and you should. It's their contribution to YOU. The entirety of your 401k is yours and yours alone. Trying to logically twist in such a way as to say you were given money and that losing 50% is somehow only 100.00 of yours or theirs is preposterous. It's 50% of YOURS, period.

    Regardless.. YOUR money is being worked for the benefit of the people working WITH it, and not you. They could care less about your little pile of green, so long as there is some money of yours that they can work with to make money for themselves.

    Sorry, but eff that stuff.
  19. Idahoser

    Idahoser Monkey+++ Founding Member

    so not taking the money does not get me any of those other benefits the employer is not giving me because he chose the 401k route. How exactly is not taking that money a smart move?
    If I chose to not put the 3% and not receive the match, the money would never have been given for me to lose. And all those other imaginary benefits he doesn't give me because this is the benefit he has selected for me, is the only choice I get, take it or leave it, the bonus still doesn't come.

    Taking the match is the better deal up til the fund drops 50%.
  20. UGRev

    UGRev Get on with it!

    no one said there wasn't a give and take in all of this. But lest say you could have done the same thing without having to have an employer match your deposit. what would you do then? case in point. I bought silver @ 12.00/oz, it's now 26.80. I more than doubled it and I can liquidate it at will. What happens when you lose 90% of your 401k? (and that has happened to a lot of people).. it would take years to recover.. do you have the time to wait? what happens if 6 months before you retire, you've made a plan on how to use that money and it loses even 30% of it's value?
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