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Teachers Pay High Fees for Retirement Funds

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Re: Teachers Pay High Fees for Retirement Funds

#51

Post by lotsofpulp »

pnutjam wrote: post #50
harikb wrote: post #31

Earlier quoted context omitted.

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged. When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers. But we all know that is now how new laws are created. A bunch of…

FSA is great if you plan to change employers, there is no clawback if you empty the account in January and change employers in February. I'm not sure why this was never considered, but it's one of the few places an employee can benefit.

There is absolutely no benefit of an FSA over an HSA, other than to pad the coffers of whoever gets the leftover FSA funds if the participant can't accurately forecast their spending. FSA's simply should not exist.

Re: Teachers Pay High Fees for Retirement Funds

#52

Post by mbreedlove »

MrFoof wrote: post #18
lotsofpulp wrote: post #3

I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your empl…

>I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. "Liz Cannon, who heads the Indian River chapter of the Florida Education Association, urged union members to buy retirement investments from Valic Financial Advisors Inc. through a firm owned by the union. That way “we also make money,” she said in a November 2017 news…

> They're not. 1% is wildly un-competitive in today's environment.

Especially now that Fidelity offers zero expense radio funds.

https://www.fidelity.com/mutual-funds/investing-ideas/index-...

Re: Teachers Pay High Fees for Retirement Funds

#53

Post by lotsofpulp »

Ididntdothis wrote: post #43
harikb wrote: post #31

Earlier quoted context omitted.

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged. When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers. But we all know that is now how new laws are created. A bunch of…

I agree about FSA. It’s stupid in every conceivable way. But don’t they roll over now? At least to some degree.

They added 2.5 months to be able to use it, if the employer wants employees to be able to. Still useless for the same reasons though.

https://www.irs.gov/newsroom/irs-plan-now-to-use-health-flex...

Re: Teachers Pay High Fees for Retirement Funds

#54

Post by throwawayhhakdl »

harikb wrote: post #31
Ididntdothis wrote: post #4

Earlier quoted context omitted.

I don’t understand why 401k even exists. The money should go into an IRA controlled by the owner. The employer should have no say in this. The same should go for health insurance....

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged. When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers. But we all know that is now how new laws are created. A bunch of…

FSA’s blow my mind. They’re pushed on young people who don’t need it. The loss is NOT MADE CLEAR.

And it hurts because a lot of people’s level 2 understanding of personal finance is max out your tax advantaged savings accounts.

FSA’s should be illegal. The advantages they bring to some (large!) don’t justify the theft from others.

Re: Teachers Pay High Fees for Retirement Funds

#55

Post by nimajneb »

Ididntdothis wrote: post #43
harikb wrote: post #31

Earlier quoted context omitted.

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged. When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers. But we all know that is now how new laws are created. A bunch of…

I agree about FSA. It’s stupid in every conceivable way. But don’t they roll over now? At least to some degree.

As far as I know it's Health Savings Account (HSA) in a high-deductible health insurance plan that rolls over, not a FSA.

Re: Teachers Pay High Fees for Retirement Funds

#56

Post by pnutjam »

Ididntdothis wrote: post #43
harikb wrote: post #31

Earlier quoted context omitted.

Edit: See jlmorton's correction below. Creation was indeed accidental. Leaving my comment unchanged. When 401k-s originally started, it was considered ground-breaking in that it was a way for employers to use their purchasing power (or choosing power) to get lower cost management of funds. It was envisioned as a great thing for employees and employers. But we all know that is now how new laws are created. A bunch of…

I agree about FSA. It’s stupid in every conceivable way. But don’t they roll over now? At least to some degree.

No, your probably thinking of HSA's or the fact that you have something like 30 or 60 days into the new year to use the old one.

Re: Teachers Pay High Fees for Retirement Funds

#57

Post by frockington1 »

Ididntdothis wrote: post #44
frockington1 wrote: post #41

Earlier quoted context omitted.

My employer subsidizes my health insurance and contributes to my 401k and a pension. It's a nice perk and part of the reason why i work for them. It's a win-win

They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.

I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives

Re: Teachers Pay High Fees for Retirement Funds

#58

Post by toast0 »

jlmorton wrote: post #34
Ididntdothis wrote: post #4

Earlier quoted context omitted.

I don’t understand why 401k even exists. The money should go into an IRA controlled by the owner. The employer should have no say in this. The same should go for health insurance....

It exists as a historic accident. It was not originally intended as a retirement savings program, but simply a way to help a small number of rich people avoid tax on deferred income invested in the stock market. Though the program has become widely popular, it's still very clearly a giveaway to the rich. Not only are the wealthy capable of saving a larger amount, we also allow their employers to contribute up to $56,…

Depending on future tax changes, of course, 401k participation of the wealthy may actually result in higher revenue for the government.

Yes, the current income tax is deferred, and there's the possibility that when it's realized, it will be in a lower tax bracket. For the wealthy, it may not end up being in a lower bracket. However, all of the gains, when distributed, will be taxed as ordinary income; if the money had been invested in an ordinary account, there would have been capital gains, which are taxed at a lower rate.

Re: Teachers Pay High Fees for Retirement Funds

#59

Post by whb07 »

MrFoof wrote: post #18
lotsofpulp wrote: post #3

I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your empl…

>I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. "Liz Cannon, who heads the Indian River chapter of the Florida Education Association, urged union members to buy retirement investments from Valic Financial Advisors Inc. through a firm owned by the union. That way “we also make money,” she said in a November 2017 news…

Last I checked most of Europe is expecting interest rates in the NEGATIVE. In the US interest rates are being chained to the floor at 2%.

So yes, 1% is beyond massive and the difference between 1% to 2% isn’t 1%.

Re: Teachers Pay High Fees for Retirement Funds

#60

Post by grimjack00 »

lotsofpulp wrote: post #49
darawk wrote: post #47

Earlier quoted context omitted.

This is a very strange interpretation. Lost revenue relative to what? Not having it? Is the government losing revenue by not taxing the bottom 50% of income earners, too? The tax code is structured this way to incentivize saving for retirement. Social security exists for the same reason. The government allows you to defer taxation in these structured vehicles so that you are better able to care for yourself in your o…

>These accounts are no more a "give away" to the rich than the progressive income tax schedule is a "give away" to the poor. Since only the rich are employed by employers who offer the benefits of these accounts, it is effectively a give away to the rich. If it wasn't a give away restricted to a certain populace, then it would be de-linked from employment and available for everyone.

> Since only the rich are employed by employers who offer the benefits of these accounts

So, being an employee of a company that offers a 401k is the new definition of "rich"?

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