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It’s a 401(k) World

nytimes.com

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Re: It’s a 401(k) World

#21

Post by exratione »

sev wrote: post #10
ttrreeww wrote: post #8

401k has confiscation risk.

Can you elaborate?

Meaning that over the long term no large pot of money goes unlooted. The public doesn't have enough influence to stop, say, some form of nationalizing of 401k accounts into pension plans wherein what they are invested in is decided by government employees. Large segments of the public would even go along with it. That then turns into looking like just another tax and entitlement because the funds can be siphoned off and spent immediately, much like social security.

The present status quo regarding finance in the US cannot continue indefinitely. Sooner or later the obligations cannot be met. There are all sorts of failure modes and unpleasant things that can happen along that road, as more funds are sought, or various institutions collapse, and the looters become ever more brazen. Some form of prettified confiscation of 401k accounts isn't anywhere near the worst of them.

Re: It’s a 401(k) World

#22

Post by Millennium »

sliverstorm wrote: post #17
sev wrote: post #10

Earlier quoted context omitted.

Can you elaborate?

I predict the reply will involve how gold is a superior investment vehicle, because the government can't take it from you.

Never mind, of course, that this has happened. Executive Order 6102, I believe it was.

Re: It’s a 401(k) World

#23

Post by andyzweb »

sliverstorm wrote: post #17
sev wrote: post #10

Earlier quoted context omitted.

Can you elaborate?

I predict the reply will involve how gold is a superior investment vehicle, because the government can't take it from you.

gold is a superior investment vehicle, because the government can't take it from you.

Re: It’s a 401(k) World

#24

Post by caw »

scarmig wrote: post #3
[deleted] wrote: post #2

[deleted]

Have to differ, there. Vanguard Index Funds of course are the best store of money. But I'd say often the best solution is forgoing the government vehicles, which effectively make your funds illiquid for decades for questionable benefit. Why? 401ks (non-Roth) are not tax-free; they're tax deferred. Which is a big difference. When you withdraw from them when you're retired, you pay income tax on them. The relevant meas…

I currently invest in a Roth 401K, and part of me is thinking that I should just be going into Vanguard Index funds since the plan my company offers me doesn't have any good low cost index funds (just targeted retirement).

I've been thinking that a non-Roth 401k is ultimately a bad deal because of the tax issue, besides increasing in tax brackets generally as you get older until you retire.

Re: It’s a 401(k) World

#25

Post by tempaccount9473 »

exratione wrote: post #21
sev wrote: post #10

Earlier quoted context omitted.

Can you elaborate?

Meaning that over the long term no large pot of money goes unlooted. The public doesn't have enough influence to stop, say, some form of nationalizing of 401k accounts into pension plans wherein what they are invested in is decided by government employees. Large segments of the public would even go along with it. That then turns into looking like just another tax and entitlement because the funds can be siphoned off…

> Meaning that over the long term no large pot of money goes unlooted.

Actually, if you look at average fees charged by financial institution, and the divertion of returns on capital to hedge funds and high-frequency traders, 401k funds are already being effectively looted.

> some form of nationalizing of 401k accounts into pension plans wherein what they are invested in is decided by government employees.

Hahhaaahaahaaaaa. That's a good one. But in cae someone else doesn't get the joke and takes you seriously, let me explain the joke. Wall Street already has your 401k money, they don't need to siphon it off via tax cuts for the wealthy like we did with the Social Security surplus.

Re: It’s a 401(k) World

#26

Post by srathbun »

scarmig wrote: post #3
[deleted] wrote: post #2

[deleted]

Have to differ, there. Vanguard Index Funds of course are the best store of money. But I'd say often the best solution is forgoing the government vehicles, which effectively make your funds illiquid for decades for questionable benefit. Why? 401ks (non-Roth) are not tax-free; they're tax deferred. Which is a big difference. When you withdraw from them when you're retired, you pay income tax on them. The relevant meas…

Don't forget, in a 401(k) you put up 100% of the input funds, accept 100% of the risk, and only get some percentage of the profits.

See this frontline for details: http://www.pbs.org/wgbh/pages/frontline/retirement/world/401...

Re: It’s a 401(k) World

#27

Post by cstavish »

LandoCalrissian wrote: post #16

In case you can't get enough of Freidman's mindbogglingly awful articles you can now generate your own! http://www.thomasfriedmanopedgenerator.com/

I wish the the "About" page gave the faintest of technical details about its implementation... A couple different Markov chains for varying generic topics, with buzzwords inserted to give the text a shred of focus?

Re: It’s a 401(k) World

#28

Post by marcosdumay »

13b9f227ecf0 wrote: post #20
sev wrote: post #10

Earlier quoted context omitted.

Can you elaborate?

Well at the very least you don't know what the tax rates will be when you begin withdrawals.

You also don't know what the inflation will be before that.

That's the most popular form of savings confiscation.

Re: It’s a 401(k) World

#30

Post by marcosdumay »

princess3000 wrote: post #6
[deleted] wrote: post #2

[deleted]

This is kind of strange given that the article isn't really about investing at all. If you can cut through the Friedman word salad his point seems to be "a 401(k) world requires you to learn much more about investing in yourself." This article is, like so many of Friedman's, basically garbage. I guess he's saying that like you need to figure out what the best 401(k) investments are, so too do you need to figure out h…

I guess (but I'm still not sure) that his main point is that there is no place for somebody that doesn't "learn how to invest" himself.

It used to be that people could choose to be extra flexible and get a better position because of that. Today, as he states - I'm not sure I agree, people have to be extra flexible to get anything at all.

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