PBS FRONTLINE - "The Retirement Gamble" 4/23

[steelyman]

I tried to find an earlier post on this, but didn't find one so thought I'd give a heads up as I suppose the subject matter is of interest to many who are attending this E-R.org party. It's the premier next week of a new FRONTLINE episode called "The Retirement Gamble". My DVR is set.

The Retirement Gamble | FRONTLINE | PBS

 

[ducky911]

thanks for the tip

was able to set the record on my new xfinity software from my pc

thanks

Bob

 

[heeyy_joe]

I watched the trailer, makes one expect a report on how mutual fund fees are a rip-off.

 

[mickeyd]

DVR is already set.

 

[frayne]

No doubt it will be a good program that reinforces why we are DIYers.

 

[nun]

The demise of the DB plan took enormous amounts of money out of employees pockets and gave it to the employers and to the mutual fund industry in fees. After seeing a recent post about an awful 403b plan with restrictions, poor investments and sky high fees no wonder Americans are failing to save adequately for retirement.

 

[Sesq]

Thanks for the heads up. I'll set the DVR tonight. Glad its not Sunday night which already has 60% of what I record in a week (Mad Men, Nurse Jackie, Game of Thrones - the others being Dr Who and the Office).

 

[Midpack]

DVR set, thanks. I always enjoy seeing such programs, no matter what the POV, and some of my favorite programs have been on Frontline (like Sick Around the World).

 

[Texas Proud]

The demise of the DB plan took enormous amounts of money out of employees pockets and gave it to the employers and to the mutual fund industry in fees. After seeing a recent post about an awful 403b plan with restrictions, poor investments and sky high fees no wonder Americans are failing to save adequately for retirement.

Having a bad 403b is not the reason Americans are failing to save adequately for retirement.... there are other options for savings, including in a taxable account...

It is because Americans want to live large and not save... getting rid of all bad retirement options would not change this attitude....


I am not defending having a bad plan, just that I think your reasoning on the result is flawed...

 

[Independent]

If we watch this, it will probably be like preaching to the choir:

FRONTLINE’s investigation reveals:

On any given street, one household may be paying 10 times as much to invest in a 401(k) as the household next door;

Over the course of a lifetime, a seemingly low annual fee of 2 percent can reduce what your balance would have been by more than 60 percent—potentially adding years to your working life;

Popular 401(k) providers often charge a plethora of hidden fees, burying them under opaque names like “Expense Ratio”;

Many financial advisers are not required to provide advice that is in their clients’ best interest; they are only obligated to give advice that is “suitable”; and

The best way to maximize your return might be to cut Wall Street out of the equation and invest in low-cost, unmanaged index funds.

 

[steelyman]

If we watch this, it will probably be like preaching to the choir:

Maybe so (hope so).

But even though I already know that Rick puts Ilsa on that plane, I still watch "Casablanca".

 

[pb4uski]

Having a bad 403b is not the reason Americans are failing to save adequately for retirement.... there are other options for savings, including in a taxable account...

It is because Americans want to live large and not save... getting rid of all bad retirement options would not change this attitude....


I am not defending having a bad plan, just that I think your reasoning on the result is flawed...

+1 nun's logic was flawed

 

[Tyro]

I marked it on my calendar, and noted it will be shown subsequently a few more times during the week on same & other PBS channels. It should also be available "on-demand" after initial broadcast.

 

[Chuckanut]

After reading the book "Retirement Heist" I am convinced that the only safe retirement plan for future generations is to get the money up front and invest it oneself.

You can do everything right and end up losing a pension through bankruptcy, merger or corporate maneuvering.

Public employees can see their DB pension lost when legislators choose to pay current bills by not adequately funding the public pension.

 

[Arifriekinel]

Thanks for the heads up! Hopefully Tyro's right on it being available On Demand, but I may put it on day of. I don't know much about 401ks but what people have tried to sell me. Interested in hearing the other side of the pitch.

 

[timo2]

After reading the book "Retirement Heist" I am convinced that the only safe retirement plan for future generations is to get the money up front and invest it oneself.

You can do everything right and end up losing a pension through bankruptcy, merger or corporate maneuvering.

Public employees can see their DB pension lost when legislators choose to pay current bills by not adequately funding the public pension.

+1 this is just a continuation of the long term trend that every one will eventually be a contract employee, responsible for their own health care, retirement, and taxes, whatever else companies used to provide.

 

[nun]

Having a bad 403b is not the reason Americans are failing to save adequately for retirement.... there are other options for savings, including in a taxable account...

It is because Americans want to live large and not save... getting rid of all bad retirement options would not change this attitude....


I am not defending having a bad plan, just that I think your reasoning on the result is flawed...

My point was that with a DB plan linked to salary the saving was automatic. Most Americans don't live large and have seen costs for things like college and health care increase while wages stagnate and they also get the costs of retirement shifted form being part of an employment contract to coming out of their wages with out receiving wage increases to pay for it......the employers and retirement firms are living large at our expense. That's why this forum is so fringe and populated mostly by those with pensions, the ridiculously frugal, or highly paid. The average American can't even envisage retiring at 65 anymore and most are sensible regular people with children that they want to succeed, that shows that the current 401k type system just isn't working for the majority of people. I'm ok with it because I'm highly paid and single with no kids, but like most of us on here I'm an outlier in the workforce.

 

[nun]

+1 this is just a continuation of the long term trend that every one will eventually be a contract employee, responsible for their own health care, retirement, and taxes, whatever else companies used to provide.

Unfortunately I agree as the idea of employers with integrity is almost gone. the difficulty comes in costing and projecting into the future. When you are competing for a contract job today it's difficult to put in reasonable benefits dollars and win the contract. That's why companies employ contractors, so they can get rid of benefits overhead.....the bottom line is that the contract employee gets a worse deal.

One personal experience I have is that I was offered a $200k annual salary contract position at a Government lab with zero benefits. I had to pay for my own healthcare, holidays, vacation etc, although the contractor I would have worked for did have a group health plan and a 401k but I was responsible for the whole premium and there was no 401k match. I ran the numbers and my existing $150 state job came out far ahead when all the benefits, were included. I did some numbers and figured I'd have to be paid at least $230k to break even. I asked the contractor for that, but it was a no go, presumably because for me to break even they would have lost most of their profit on the employment contract. Contracting saves the employer money, the contracting company gets some of that saving and the employee probably gets a bigger salary, but a poorer overall deal and if they do get to put money in the retirement account provided that gets eaten away at bye mutual fund fees.

 

[Texas Proud]

The demise of the DB plan took enormous amounts of money out of employees pockets and gave it to the employers and to the mutual fund industry in fees. After seeing a recent post about an awful 403b plan with restrictions, poor investments and sky high fees no wonder Americans are failing to save adequately for retirement.

My point was that with a DB plan linked to salary the saving was automatic. Most Americans don't live large and have seen costs for things like college and health care increase while wages stagnate and they also get the costs of retirement shifted form being part of an employment contract to coming out of their wages with out receiving wage increases to pay for it......the employers and retirement firms are living large at our expense. That's why this forum is so fringe and populated mostly by those with pensions, the ridiculously frugal, or highly paid. The average American can't even envisage retiring at 65 anymore and most are sensible regular people with children that they want to succeed, that shows that the current 401k type system just isn't working for the majority of people. I'm ok with it because I'm highly paid and single with no kids, but like most of us on here I'm an outlier in the workforce.

Not to get into an argument, or go back and forth on what is or is not true as I do not want to have this thread closed.... but your previous post did not even come close to saying what you said in this one...

One point I will make... who cares what the fees are in a DB plan... the fees are paid for by the company as the benefits are, by definition, defined... the finance firm can charge $1 per person or $1 mill per person... it does not change the benefit to the employee...

It would be clearer if you directed where your hate is as some of what you are saying does not make sense when it seems you are talking about something else... ie, fees for DB plans... stealing money, etc...

 

[rodi]

As mentioned here - not all employer plans are alike. My husband's plan (described in another thread) is made up entirely of funds that not only have high expense ratio's... they have front loads of over 5%!!!

I had a sweet plan - low expense ratios... but due to being acquired - now have much crappier investment options. I hope to retire before this hurts me too much... and plan to roll my existing 401k (pre-acquisition) out to self directed IRA).

My point is that employees often have NO control over how crappy their choices are. Yes they can/should save, either in the plan or in taxable accounts... but it sucks to have the tax deferred option be so lousy. You can contribute a lot more tax deferred dollars to a 401k type plan than to an IRA. (especially if you're over 50)... and that tax deferred part is a big deal during the accumilation phase.

 

[nun]

Not to get into an argument, or go back and forth

I agree, so I won't.

The Frontline special looks to be very interestng and I'll be watching

 

[sengsational]

Thanks for the heads-up. I used to record every Frontline, but they're pretty depressing, over all, so I took it off the regular recordings list. But I'll put this one-time recording on.

Talking about the 401(k) fees... I got this book called "Stop the 401(k) Rip-off!" in the mail, unsolicited. I read it and checked my company's 401(k) and it didn't look like it was one of the bad actors in this book. But, to this day, I don't know who sent this book to me or why. Weird. It was probably 5 years ago, but the book has two business reply cards in it for a free copy of the book. I kind of doubt they would work to get a free book any more, but PM me if you want me to put your address on one of the cards and drop it in the mailbox.

 

[scrabbler1]

Back in my working days, I was always very concerned about expense ratios of the funds offered in my 401(k) because I knew I would be in those funds for the long haul (mostly, I did make a few fund switches as my company changed 401(k) administrators a few times and that caused some funds I was in to disappear). So 1% more in the expense ratio would, over 22 years (how long I was in the 401(k)) compound to nearly 25%. My company had a special Stable Value fund in which they picked up all or nearly all of the expenses, resulting in an expense ratio of close to zero.

This philosphy resulted in my elimination of consideration for many of the funds in my company's 401(k). I saw expense ratios well north of 1%, even north of 2% (this was in the booming 1990s when everything rose, however). All of those "managed" life cycle" funds had big expense ratios, perhaps justifiably. But why should I pay someone else to rebalance when I can do it myself?

In my rollover IRA I have the same philosophy, as my time horizon is still pretty long (at least 10 more years). I have stayed with stock index funds and have found investment-grade corporate bond funds with expense ratios well under 1%.

My ladyfriend's 403b plan has an awful set of fund choices. I struggled to find a few with low expense ratios, as nearly all of them were well north of 1% without showing any better past results. I can't figure out why anyone would ivest in them. Thankfully, they had that popular PIMCO Total Return Fund which had a low expense ratio (I was in it a few ago before I ERed after one of those 401(k) administrator changes). Most of her other holdings are stock funds or individual stocks so this proved to be a good counterweight.

 

[Badger]

My ladyfriend's 403b plan has an awful set of fund choices. I struggled to find a few with low expense ratios, as nearly all of them were well north of 1% without showing any better past results. I can't figure out why anyone would ivest in them. Thankfully, they had that popular PIMCO Total Return Fund which had a low expense ratio (I was in it a few ago before I ERed after one of those 401(k) administrator changes). Most of her other holdings are stock funds or individual stocks so this proved to be a good counterweight.

My wife had a similar problem with her 403b plan. It seems that most of the offers were really poor options with all but one of them being insurance company annuities (no new news there).

The only options she had was with Merrill Lynch who tried to convince her to invest in funds that were full of loads and high annual fees. After asking a lot of questions for a year trying to figure a better plan I was able to (at that time) have the money put into their MM fund and at intervals transfer the money to TRP no load mutual funds. ML didn't like this at all and constantly screwed transfers up but we kept paper trails, dates/times/names of phone calls, etc. and were able to make this work. I don't know if this method is still available but it would be worth looking into.

Cheers!

 

[Rustward]

Our TiVo(s) pick up all FrontLine shows; I checked, and the TiVo S4 has it scheduled to be recorded. But I probably would not have been aware until I saw that the TiVo had picked it up; thanks.