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Old 06-13-2016, 03:34 PM   #21
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That 401 was still a killer deal though. My Co matched 50% of your first 4% (of salary) and 25% of your next 4%, so if you did 8% it was like giving yourself a 3% raise. I was in for the max and it hardly made any difference in my paycheck due to the tax benefits.

Even with high fees you are better off maxing the 401 especially if there is profit sharing involved.
And this is what employees should do even if they are getting screwed by the plan. In most cases the small company gets kickbacks in the way of free HR services from companies in exchange for the higher fees so companies have good incentives to go with high fee firms.
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Old 06-13-2016, 03:51 PM   #22
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JO fan here as well. The problem is, the people who need this advice will not have the patience or tolerence to sit through the twenty minutes of excellent and accurate information.
I do think that the humor and liberal use of words not permitted here may get a few to watch to the end. We can hope. But how sad that it's the ONLY place many would get this info.
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Old 06-13-2016, 04:16 PM   #23
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I just had to see what the 'certification' looked like. Very officious.

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Old 06-13-2016, 05:03 PM   #24
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That 401 was still a killer deal though. My Co matched 50% of your first 4% (of salary) and 25% of your next 4%, so if you did 8% it was like giving yourself a 3% raise. I was in for the max and it hardly made any difference in my paycheck due to the tax benefits.

Even with high fees you are better off maxing the 401 especially if there is profit sharing involved.


I wonder if you had co workers who did not take advantage of that. My GF has many in her office who refuse to participate in the 401k that matches first 3% and 50% of next 3%. They know they are getting a pension of some sort and SS, and that is all they worry about. Spend the rest.


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Old 06-13-2016, 05:29 PM   #25
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Yeah, one guy in particular, he just didn't trust the markets I guess. He was my age too and plenty frugal. Used to buy $10 grand T-Bills. I dunno.
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Old 06-13-2016, 05:37 PM   #26
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I'll never order chowder in a restaurant again.
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Old 06-13-2016, 05:50 PM   #27
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I'll never order chowder in a restaurant again.
LOL - True!

My husband's former employer had an amazingly craptastic 401k that I posted about at the time. He contributed enough to get the match. That helped offset the front loads on the funds that had crappy expense ratios to boot.

We rolled it as soon as we could.
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Old 06-13-2016, 05:51 PM   #28
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I think I found a new guy to watch for a while. Thanks. (I guess I like geek humor).
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Old 06-13-2016, 06:32 PM   #29
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I wonder if you had co workers who did not take advantage of that. My GF has many in her office who refuse to participate in the 401k that matches first 3% and 50% of next 3%. They know they are getting a pension of some sort and SS, and that is all they worry about. Spend the rest.


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Way back on my second job, the company matched dollar for dollar for the first 8%... really!!!

I used to tell some coworkers that they needed to put money aside.. some would say 'I need the money, there is no way I can put any away'.... where I would say 'put the money away and if you need some just take out a loan'....

Heck, even if you had to pay taxes and penalty on the money you were still ahead of the game big time... nope... some people are just too dumb.... and BTW, we are talking accountants and finance people....
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Old 06-13-2016, 07:04 PM   #30
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Good video, from an unexpected source. No wonder most people don't know who to listen to when John Oliver gives better advice than any financial services firm advertising anywhere...
I for one, have always expected JO to give solid advice
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Old 06-13-2016, 07:38 PM   #31
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My 401k is through fidelity. I would pay lower fees if I rolled it over to an IRA at Vanguard but it is my understanding that the 401k has unique liability protection. Anyone else keeping theit 401k for this purpose?
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Old 06-13-2016, 08:57 PM   #32
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My 401k is through fidelity. I would pay lower fees if I rolled it over to an IRA at Vanguard but it is my understanding that the 401k has unique liability protection. Anyone else keeping theit 401k for this purpose?

No but my 401k is with Fido and I have an IRA with them that gives me access to things I can't get in the 401k. I keep the 401k because I have a stable value fund and my state has a tax break for employer retirement income. As far as liability protection it depends on which state you live in. Someone posted this link in another thread on this forum.
http://www.thetaxadviser.com/content...teirachart.pdf


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Old 06-13-2016, 10:40 PM   #33
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I just had to see what the 'certification' looked like. Very officious.

Attachment 24110
I just saved $4000 and a trip to Iceland by printing this certificate...

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Old 06-14-2016, 03:30 PM   #34
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I just had to see what the 'certification' looked like. Very officious.
I couldn't resist either:
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Old 06-14-2016, 07:51 PM   #35
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I like JO.
The thing is even with high fees 401K's do get people to save. My company's 401K is handled by Merrill lynch, fees are pretty middle of the road. My company matches dollar for dollar for the first 6% and if for every year that the company makes a profit and you are contributing at 6% they then throw in an extra 3%.

I'll take that deal
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Old 06-14-2016, 08:32 PM   #36
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My 401k is through fidelity. I would pay lower fees if I rolled it over to an IRA at Vanguard but it is my understanding that the 401k has unique liability protection. Anyone else keeping theit 401k for this purpose?
Another 401k benefit to consider is that the 401k can be accessed penalty-free earlier than an IRA; if you retire from the associated company at 55 or older, you can access withdraw without the 10% penalty vs 59.5 for IRAs. This could also be a reason to roll one's IRAs into an employer 401k prior to retiring at 55. I used to think this age-55 rule was a feature of the particular employer's 401k, but it is for all 401ks per the IRS: https://www.irs.gov/taxtopics/tc558.html
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Old 06-14-2016, 08:49 PM   #37
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Another 401k benefit to consider is that the 401k can be accessed penalty-free earlier than an IRA; if you retire from the associated company at 55 or older, you can access withdraw without the 10% penalty vs 59.5 for IRAs. This could also be a reason to roll one's IRAs into an employer 401k prior to retiring at 55. I used to think this age-55 rule was a feature of the particular employer's 401k, but it is for all 401ks per the IRS: https://www.irs.gov/taxtopics/tc558.html
It must be spelled out in the SPD and the custodian must allow for early withdrawal. Seems odd given it is the law, however a few have found it impossible to do.
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Old 06-14-2016, 09:42 PM   #38
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I used to think this age-55 rule was a feature of the particular employer's 401k, but it is for all 401ks per the IRS: https://www.irs.gov/taxtopics/tc558.html
There is a small problem with this withdrawal at age 55 if the 401K is a Solo 401K (for a sole proprietorship.) Since you can only do the withdrawal at age 55 if you have separated from the employer (yourself in this case), then you must terminate the business in order to meet the "separation" requirement. Once you terminate the business, there's no longer a 401K plan to do the distribution ("catch-22"), instead the money has to be rolled over to an IRA. And, as we know, there's no "age 55 rule" for IRAs.
At least that's what appears to be the case. A previous thread on this is here, and a subsequent one is here.
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Old 06-15-2016, 12:04 AM   #39
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I sent this to one of my sisters who just retired... has told me and someone else that they just give their info to the FA... at ML...

I said they cost you a good amount of money... she continues to insist that 'we pay him nothing'.... really? You really think he works for free?


You can teach dear sis something huge: That financial advisor fee is tax deductible. That will get her to find out what that fee actually is. It should be in the quarterly statements. The fee is taken directly out of the portfolio.

She'll look for the fee because of the tax deduction. Then she'll become horrified at how much she is shelling out. Eventually she'll thank you.


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Old 06-15-2016, 08:39 AM   #40
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You can teach dear sis something huge: That financial advisor fee is tax deductible. That will get her to find out what that fee actually is. It should be in the quarterly statements. The fee is taken directly out of the portfolio.

She'll look for the fee because of the tax deduction. Then she'll become horrified at how much she is shelling out. Eventually she'll thank you.


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I do not think it is since he is doing their retirement accounts... I do not think they have much saved outside of those...

Anyhow, she will not listen.... and her DH is even worse... they actually are the type of people who can benefit from a FA.... but to me they should know what he is costing them...
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