How many of you saw the showing last night of 60 minutes (Sunday 4/19)? What's your opinion of the state of the union of American's 401k's.
And many, even if they lost 40%-50% still have all the money they invested as many companies match at least 50%.
I had a 401K at a rinky dink shop in a small town years ago. The trustee was a local bank and the admin. was some accounting firm in Dallas. Not a bad plan. Matched 25% up to 6% and had 3 decent investment choices. We only got one statement per year and when I compared my returns to that of the actual fund I was in there was a pretty big difference, so the hidden fees were significant.
The thing that irked me the most was when I left the job and rolled the 401 into VG. I resigned mid year, but was only credited with what was on the most recent statement which came out in January. In that time my account should have grown several hundred dollars according to my calculations. I called the trustee and the admin. and neither gave me a good explanation of where that money went. I think the best I got was that the money would "probably" be split between the employees still in the plan.
I thought it was a pretty good piece.
Yes, many people have lost a lot of money in their portfolio. But I thought it was good that they got both sides of the story.
For those close to retirement, they should have had less exposure to equities. And many, even if they lost 40%-50% still have all the money they invested as many companies match at least 50%.
Story was about a couple of 3rd generation bull fighters. One (having spent most of his life in U.S.A) wasn't very good and "lost" a couple of matches ...
People in sports choose to play it and at a high level are motivated by very big reward.Personally, I see little difference between UFC, Boxing, Bullfighting, Hockey, and NASCAR the blood is big part of the attraction.
One (having spent most of his life in U.S.A) wasn't very good and "lost" a couple of matches ...
People in sports choose to play it and at a high level are motivated by very big reward.
Given a choice I suspect the bull would prefer to be left alone.
Actually I thought it was a lousy piece, since "other side" consisted of the 401K lobbyist. He sounded like a out of touch netwit with a Scrouge like compassion.
Picking the lesser of two evils doesn't rationalize approval or support of either one.Given my choice between being reincarnated as bull that goes into ring, or cow or bull that is in factory farm, where they never see sunlight, have sex or graze in a pasture. I'll take the bullfighting option please. I suspect that 95% of farm animals have far worse lives.
What?? Match at least 50%
Maybe match 50% of the first 0-5% of your contribution. I've never worked for a company that matched 50% of the max (15%) I've put in. The lowest percentage a company contributed for me was 0% (no match whatsover) and the highest - 100% up to 3% and 50% match for other percentages up to 5%. This is not to say that company match doesn't count. I am just saying if you lost 40%-50% of your total contribution, the loss cannot be sustained by the company match alone. Not even close. But maybe like you say, some companies do give better contribution than I get.
Well I agree he wouldn't win any personality contests. But is there any statement you can point out that you disagree with?
Would you disagree with his comment that people need education about their financial investments? I rather thought that one was at the crux of not only some of the worse 401K losses, but the general financial trouble many people find themselves in.
No I didn't think he said anything wrong. He came across as being unsympathetic to the losses people suffered and did a horrible job defending his product.
If I was hired to be the spokesman for the 401K industry, I come to a 60 Minute interview and I want to make 3 points.
1.) If you invest say 10% got a 3% employee match, since you were in your mid 20s worked for 30 years and now are in 55. You still have a lot more money than you put in. A nice little chart showing contributions vs expected value using a life cycle fund or a gradually increasing bond AA using the Vanguard Total Stock Market index and Bond index fund.
2.) Acknowledge that financial education has been crappy, but point out that folks had asset allocations appropriate to there age typical lost in 20-30%. A large a painful blow, but it is entirely possible that this losses would be recovered in a several years.
3. Point out recent improvements in the 401K field, Lifecycle funds, employers providing more education. Finally, let people that unlike with an IRA you can withdraw money penalty free from a 401K at 55 not 59.5, if you were terminated.
No I didn't think he said anything wrong. He came across as being unsympathetic to the losses people suffered and did a horrible job defending his product.
If I was hired to be the spokesman for the 401K industry, I come to a 60 Minute interview and I want to make 3 points....
I would be very interested in seeing the entire raw footage of the interview. As already mentioned, it would be interesting to see the raw footage and then the edited version.
Who knows if he did or did not say any or all of the above... we do not have the whole interview...
But IMO he was right in that most people do NOT know what to do and chase the best total return without thinking about the risks...
Also, that lady that was so upset.... she had a balance that was less than $5K... it was a profit sharing plan... she said (IIRC) that she had another account with $80K or thereabout... I do not think that her retirement would be much different IF she had another $80K saved.. if you live in NY, you can burn through that amount of money in one year...
And to me that was the rub... most people did not have enough money in the first place... and now that they have only half as much will blame the crisis on their plight... even though they could not have retired like they had wanted with the money they had... so in a way, for some... the crisis has forced them to look at what they have and to continue to work... if they had retired with no crisis, they would have run out of money anyhow....