Senator Rubio unveils proposal to reform retirement policy

[BlueStreak]

Once again, we try to find ways to help workers and poor people support themselves in their old age........without it costing employers or wealthy taxpayers anything.

No matter what you come up with, it isn't going to work. It can't work without redistribution of some sort. Some Americans just have to face the reality that they cannot pig up the nations wealth for themselves. They are going to have to face the fact that they DO, whether they like it or not, bear some social responsibility towards their fellow citizens.

The entire basis for human civilization is collective. Mutual aid and protection is the foundation for a strong society.

Dave

[Ike Bana]

Originally Posted by whell

LOL.

So me another investment that allows you to invest pre-tax funds, and the invested funds grow tax deferred until withdrawal. Combined with the "set and forget" aspect of payroll deduction, the plans give many folks a very favorable way to save money for retirement. The "sky high management fee" argument has already been dealt with.

If "So me" means "show me"...you mean show you Ike B's portfolio at TDAmeritrade? Because it does everything you glowingly report that a 401K does. And more.

With a few exceptions. There's no "set and forget" investing. Who TF wants a "set and forget investment plan? No thanks.

There's no limited choice of fund investments set up by the 401K vendor hired by my boss. I choose from any mutual fund or ETF that I want. Except for the mystery funds that the 401K vendors offer, most of which are not even traded on the open market. No thanks.

There are no hidden expenses and fees. You can spew your chunks about how that's been dealt with and it's bullshit. I know exactly what me fees and expenses are. Fees are 7 bucks per trade, expenses...the average expense ratio for our portfolio is .07%. Not .25%, not .75%, not 1.%, not 1.5%, not 1.75% or worse.

Mystery fees have been dealt with. My ass.

Beyond the investment fundamentals, you should add a high degree of fine-tuning. You will need to involve your employer if you have a 401(k)-type plan. People with Individual Retirement Accounts can do it mostly on their own.

The first leg of an overhaul should be to examine your account for often-hidden internal expenses. There may be layers of middleman fees that you can eliminate simply by changing vendors. Generally, plans sold by insurance agents (particularly with onerous “wrap” fees) and by stockbrokers tend to be the most expensive. Avoid funds sold with a commission, which will eat into your returns.

It may take some dedicated sleuthing to find some of the most pernicious expenses within a retirement plan. One key to telling if a plan may be loaded with middleman costs is to ask the 401(k) plan administrator if revenue-sharing fees are being paid. If they are, they will ultimately be deducted from your assets and pare your savings, although you may not see the fees on your statement.
http://www.nytimes.com/2011/09/16/bu...osts.html?_r=0

No fucking thank-you very much. Not interested in a goddam struggle with my employer or with my 401K plan administrator to make sure that his brother-in-law the 401K program vendor keeps his sticky fingers out of my wallet. I'll manage my own portfolio, know exactly what the expenses are, and beat the pants off any 401K program out there by 5% every year.

[BlueStreak]

Unfortunately, the 401k is what the vast majority of Americas workforce has been stuck with. And, thanks to shitty wages and cost cutting employers many of us can't afford to contribute anything but the bare minimum, if that.

And, I hate to say it, but it's just the damned truth. A whole lot of American workers do need a "set and forget" type of retirement plan because they are NOT financial experts and haven't a clue how to invest and play the markets. That's not a slam against anyone, it's just reality.

Dave

[Ike Bana]

Originally Posted by BlueStreak

Unfortunately, the 401k is what the vast majority of Americas workforce has been stuck with. And, thanks to shitty wages and cost cutting employers many of us can't afford to contribute anything but the bare minimum, if that.

And, I hate to say it, but it's just the damned truth. A whole lot of American workers do need a "set and forget" type of retirement plan because they are NOT financial experts and haven't a clue how to invest and play the markets. That's not a slam against anyone, it's just reality.

Dave

And...if it were up to the GOP, we'd all be stuck with a 401K for our retirement, no social security, no pension packages, just a hugely un-informed public cut adrift in the world of bloodsucking vampires from the financial sector and their political benefactors. The politicians are happy to do it...their power base remains in the same place...corporatists, both industrial and financial. The fact remains that the 401K system benefits two groups more than anybody else...the employer's business and the 401K vendor industry they pay to provide and manage the meager plans. When I investigated the 401K plan at my last job, the fund choices? Fifteen fucking fund choices. I couldn't believe it. Then I went looking for the funds available in the plan and they were all non-publicly offered funds. You couldn't invest in any of them outside of that 401K, or perhaps other 401K programs. The available information on them was nil. Comparative performance information and broad analysis of them (by Bloomberg, Lipper, etc.) was almost non-existant. I'm supposed to put all my retirement money into funds where I can't get the information on performance and expenses without ringing the neck of the company 401K plan administrator? I don't think so.

But y'know Dave...let me say something about "experts." I'm no expert. But I know that "playing the market" is a loser's game. Warren Buffet has been trying to beat that into people's heads for decades.

I'm a lazy-ass, ex-hippie, ex-herb toking, acid dropping, coke snorting, maniac recovering addict (with some money to invest). For 10 years we used a guy at Waterbury Financial Services, and anually paid a percentage of total assets managed as our fee for their service. It was comparatively pretty fair actually, .75% of total assets managed per year. And the guy did an OK job. It was pretty much listen to what the guy said, let him "set it" and "forget it". About a year before the '08 meltdown we decided that we were tired of paying this guy thousands of dollars every year, because he was pretty much setting it and forgetting it as well...and that's what most of them do. If they spend an hour or two a year on your account, it's probably a lot. So we opened a TDAmeritrade account and took it over.

How? About 4 or 5 hours of investigation...that's it. We found a model, low-cost index mutual funds and ETF's, with suggestions for three or four types of funds to put all your money in, and simple suggestions for the asset allocation and balancing. Found it on MarketWatch.com. I guarantee you I didn't spend more than a day on it. What sold us was the fact that a simple "couch potato" portfolio like this, year after year, outperforms over 80% of the certified financial planner "experts" you will pay 1% or 2% or more a year to manage your money. When the '08 meltdown hit, we rode it out. We were whole again in less than 18 months, and since then our portfolio has nearly doubled in value, without any new money going into it. I don't put more than a couple of hours a year into rebalancing the allocation...that's it. Just between the 2.5% or so it was costing us in expense ratio fees and consultant management fees we were handing over every year, we're way ahead.

And I'm no fucking expert. Anybody can do it, if they take a little time. (Sorry this was so long.)

[piece-itpete]

I can track and change my 401k online.

I'm uncertain about privatizing overall but not necessarily why kneejerk reactions say.

For starters, it builds actual cash value. For a poor person this is an amazing thing. Usually their only hard asset is a POS car.

Secondly it holds its value better than the government. The government spent the additional cash they collected form us under the guise of preparing for the boomers. Yes, they will pay out anyway, but by collecting it from us AGAIN, which we will do without wimpering. This makes Wall Street look like rank amateurs.

The third reason I'm game on trying it is it would be a very small percentage. 5, 10% of your total SS? Is SS such a sacred cow we can't even try a limited experiment?

I've found them to be pampered & well fed and as such juicy & delicious

Pete

[Ike Bana]

Originally Posted by piece-itpete

I can track and change my 401k online.

I'm uncertain about privatizing overall but not necessarily why kneejerk reactions say.

For starters, it builds actual cash value. For a poor person this is an amazing thing. Usually their only hard asset is a POS car.

Secondly it holds its value better than the government. The government spent the additional cash they collected form us under the guise of preparing for the boomers. Yes, they will pay out anyway, but by collecting it from us AGAIN, which we will do without wimpering. This makes Wall Street look like rank amateurs.

The third reason I'm game on trying it is it would be a very small percentage. 5, 10% of your total SS? Is SS such a sacred cow we can't even try a limited experiment?

I've found them to be pampered & well fed and as such juicy & delicious

Pete

Good for you, but I believe we're talking about different things. Of course they build cash value. Not enough IMO. It holds value better than the government? Seems to me the SS system is run pretty well. I actually trust it more than I trust most bankers. Other government sectors...sure, fine they're monumentally wasteful. SS is run quite well. So...

[piece-itpete]

Gaaa! I've been black x'd!



Seeing as we have to pay twice I find the well run argument interesting

Pete

[whell]

Originally Posted by Tom Joad

That's 1.5% of the total amount you have invested, not your gains.

If you gain 1.5% for the year they get it all.

If you lose 10%, you lose 11.5% in all, and they still get their 1.5%.

You have no clue what you're talking about.

[whell]

Originally Posted by Ike Bana

If "So me" means "show me"...you mean show you Ike B's portfolio at TDAmeritrade? Because it does everything you glowingly report that a 401K does. And more.

With a few exceptions. There's no "set and forget" investing. Who TF wants a "set and forget investment plan? No thanks.

Does the TD Ameritrade account allow you to defer up to $17500 annually from pre-tax funds? No.

Is that a significant advantage for most folks? Yes, huge.

As far as the set and forget piece, you know as well as I do that there are many folks who wouldn't have the discipline to invest in their retirement on their own. Having it come out via payroll deduction - set and forget - allow the funds to come out of their paycheck before they have a chance to miss it. And since the funds come out pre-tax, the hit on their paycheck "feels less" impactful than what it might otherwise be.

Is that a significant advantage for most folks? Yes, huge.

[piece-itpete]

Ah, I see! No more x

Pete