John Oliver on Retirement Accounts last night

[Aerides]

tl;dr version: FA's are bad, Index funds good. Nice commentary, mixed with comedy, about how fees are structured in most retirement plans, and some legislative changes coming next year.

 

[karen1972]

I laughed more because I can just imagine their 401k company this morning spinning PR.. something tells me he is not well liked.

This rang so true to me.. my last companies 401k was much like this.. the market went up 10%, our funds went up 3%..most of the profit eaten by the fees..with no matching it really was a losing proposition to keep putting money into it.. I'm like sure for a few years the tax savings will compensate but long term, your losing so much money. I was so happy to quit and roll it over into Vanguard. Then on top of just the normal fees, you have the 1.5% International Fund fee and the "we will manage your money for you at 1.5% management fee" which those were additional optional ways for you to throw away your money. I always said I thought either HR or the CEO must be getting kick backs for this plan because no one would use these loan shark like 401ks if they had even a single brain cell...and I honestly wouldn't put it past my CEO.. he put the vulture in VC.

 

[Happyras]

Thanks for posting, very funny but more people need to wake up. I am recently enjoying the Paul Merriman podcasts, which are not as funny, but really seem to be honest insight.

Paul Merriman

 

[ExFlyBoy5]

Great share...thank you. I am a pretty big fan of John Oliver. His spot a couple of weeks ago about stadiums is SPOT ON.

Oh yes...did anyone else get sick to the stomach with the Suze Orman piece when people call to see if she will agree with them on some stupid purchase? The first one on the 70K Mercedes pretty much summed up the keeping up w/ the Jone's mentality of America.

 

[exige]

haha thanks for posting this was awesome. My wife and I recently started watching his show she will love this.

 

[retire2020]

LOL Enjoyed watching the way they made fun of Prudential Ad

 

[BeachOrCity]

Funny and educational. Awesome!

 

[Midpack]

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...

 

[kgtest]

I wonder how many average people laugh really hard at all 20 minutes of this show and don't even bother spending 5 minutes looking at their own fund fee's. I already know what mine are, I know that vanguard lowered them from a year ago and that made me smile in a different way. And I know how much $$ my total fee's for entire portfolio cost me. It's soo small I don't even bother caring, but that peace of mind is priceless.


BTW my avg expense is .07 for the 18 funds I own, or 30% less than the 1% mark. Mainly low-cost VG funds including index and ETF's and a handful of individual stocks

 

[Badger]

When my wife started working for the public school system in Duval County there were over 20 companies to invest in for her 403b. All but 2 were insurance companies with annuities. Unfortunately the other options were bad too but we had to make a choice. In our case it was ML who tried to get us into mutual funds with an assortment of fees and loads. They even tried to convince us to let them buy and sell funds as the stock market changed. Instead we had them put the money into a money market account which we periodically moved to Vanguard Wellesley even though initially they said it could not be done. I don't know much about investing (and still don't) but I did the best I could to find a way to protect her retirement savings. Glad I started reading posts from here and Morningstar years ago. Too many people get ripped off. Thanks everyone at EarlyRetirement.org .

Cheers!

 

[RobbieB]

My old company used Hancock for the 401 too. I never looked at the fees.

Why bother? What can be done? It wasn't like we were a big outfit, only 40 people.

 

[pb4uski]

....BTW my avg expense is .07 for the 18 funds I own, or 30% less than the 1% mark. ...

Math is hard.

 

[MRG]

My old company used Hancock for the 401 too. I never looked at the fees.

Why bother? What can be done? It wasn't like we were a big outfit, only 40 people.

Sadly millions are in the same situation. Some at Tinycorp many at much larger organizations.

I spent time in the back offices of many fund companies talk about waste. I never understood how some of the executives could sleep. I recall one fund company having a banner year from their advisor only funds. They gave a one time 100% bonus to everyone, including the cleaning crews. These people were buying autos, boats, kitchens and homes. That was the uneducated investors money they handed out very freely.

That's one of the many excessive examples of large sums being blown. Looking back it was pretty bizarre.

 

[RobbieB]

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.

 

[Texas Proud]

My old company used Hancock for the 401 too. I never looked at the fees.

Why bother? What can be done? It wasn't like we were a big outfit, only 40 people.

I worked for a company with 25 and did the work to get theirs converted to Fidelity... they have a packaged plan that is designed for small companies and it pretty cheap... a big list of funds you can choose... some with ER of .05...

No need to keep with a Hancock at 1.69%....

 

[Texas Proud]

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?

 

[target2019]

Funny coincidence here. Tinycorp is recommending we take advantage of JPMorgan advisors coming in. Heck, they don't even handle our 401k. That's another band of scoundrels.

 

[harley]

My old company used Hancock for the 401 too. I never looked at the fees.

Why bother? What can be done? It wasn't like we were a big outfit, only 40 people.

One thing that can be done is what I instructed DD to do. Only put in enough to get whatever match there is, and then invest the rest in an IRA, or even just an after tax account, if you don't qualify for an IRA. We put her 401(k) money in the lowest cost option they had (S&P Index, although a lot more costly than Vanguard's), then set up automatic deposits to her IRA and after tax accounts so she never missed the money. That way she's making more than she's losing, thanks to the match, but not enriching the management company any more than she has to. She's a smart kid, and takes my advice about financial stuff. But not anything else.

 

[pb4uski]

^^^^^ Good strategy if the 401k offerings stink.

 

[frayne]

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.

 

[Running_Man]

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.

 

[MBAustin]

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.

 

[KCGeezer]

I just had to see what the 'certification' looked like. Very officious.

 

[Mulligan]

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.


Sent from my iPad using Tapatalk

 

[RobbieB]

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.