It pisses me off that I have a 401K.

[tk2kewl]

Or more precisely: it pisses me off that I cannot allocate my 401K money to a simple savings account but have to invest in in funds run by criminals. After 12 years of contributing, my account is at the moment back to break even and I really wish I could safeguard those contributions from the market pigs. :mad:

[valerief]

1. +1 gazillion

[Greybnk48]

52. Ditto. n/t

[truebrit71]

2. Does your 401(k) account not have a money market option?

Most do...use that option instead of investing/gambling with any of the funds..

[tk2kewl]

3. I don't think it does...

I just put it all in a Stable Income Fund whose value curve over the last 4 years has been something that would fit the y = mx + b equation where m is slightly positive.

[dems_rightnow]

19. I'll bet it does

Look and see.

[tk2kewl]

20. see #11

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2241474&mesg_id=2241601

[Atman]

34. Mine has actually done pretty well.

I put 30% into gold at the beginning of the year...that's paid off handsomely. I have the rest in Large Funds, Money Market and I can't remember what the rest is. We just met with our 401k guy yesterday, and he was impressed with my mix of investments, said I was doing way better than most. I admit, though, I don't have a clue what I'm doing...my wife's business partner's husband is in "wealth management," and we just just take his advice. It seems to work out okay for us.

.

[truebrit71]

60. I suggest you check again, I would be highly surprised that your 401(k) plan...

..doesn't have a cash/money market option...

[femrap]

68. I was shocked to find out

that State Farm Insurance co. didn't offer a Money Market account for their employees....to me, not offering one is not taking the fiduciary responsibility seriously.

I've long wanted to see an employee sue their employer on this. If the employee believes that the market is going to crash, there is NOWHERE to put the money!!!!

[abelenkpe]

6. It's a better option

but not guaranteed. A simple saving account is, but makes no interest. Lets face facts it is damn near impossible for gen X and millennials to save much less break even. But hey, congress wants to cut our social security and medicare cause we have more time to save and make up the loss. Grrrrr.....

[daleanime]

10. They may want to....

but 80+% of Americans don't want to see them cut. If congress is stupid enough to do it, watch the OWS crowds grow.:grr:

[tk2kewl]

12. fuck it... i want to put it in the mattress fund

:evilgrin:

[abelenkpe]

42. Me too ;) nt

[tk2kewl]

14. looks like I can do this...

see post #11
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2241474&mesg_id=2241601

[demosincebirth]

27. Do you really know what Money Market accounts pay? I suggest you check them out

before telling someone to put their money there. Taking money out of any pension fund before age 59 hits you hard with a big penalty if you don't pay it back.

[truebrit71]

58. I did NOT tell them to take ANYTHING out of their 401(k)...

I asked them if they had a money market option WITHIN their 401(k)...

As a financial professional I would NEVER a) give ANYONE any advice about their finances on an internet forum and b) would NEVER suggest that they withdraw funds that would cause potential early withdrawal penalties and additional IRS taxation issues...

But thanks for putting words in my mouth...:eyes:

[dkf]

4. I'm sure there is a cash type option if you are bent on taking that route.

Every 401k has something like that.

[femrap]

69. Not all....

State Farm Insurance didn't offer one. I was shocked. I thought someone would sue them for losing money.

[Nye Bevan]

5. Check your 401k investment options. There is almost certainly a guaranteed investment contract

option, or a money market fund, that will enable you to avoid the risks of the stock market.

[tk2kewl]

11. It looks like i can put it into a Self-Directed Brokerage Account

and then just let it sit in the money market there. those accounts aren't insured though.

a friend who is a commodities trader has a brokerage account (not 401k) with MoFo Global. and guess what? he is frozen out and has no idea if he will get some, all or none of his money back

[demosincebirth]

32. What's the interest rate?

[tk2kewl]

35. i haven't a clue

i think i need to enroll in the Self-Directed Brokerage Account to find out. i suppose i could call and ask.

[demosincebirth]

40. I suggest you google Money Markets... look up what they pay and

have a barf bag near by. See my post @ 22

[jeff47]

66. It's better than the negative return the mutual funds are "paying" (nt)

[demosincebirth]

71. Your answer is an oxymoron.

[jeff47]

78. You do realize you can lose money when you invest in a mutual fund, right?

Let's say your 401k bought shares in the https://personal.vanguard.com/us/FundsSnapshot?FundId=0040&FundIntExt=INT">Vanguard S&P 500 Index fund in 2006. Since 2006, the fund has lost 1.26%. Your $10,000 investment in 2006 is now worth $9,874.

Instead, if your 401k had invested in a money market fund/CD/savings account with a terrible 0.6% interest, your $10,000 from 2006 would be about $10,300 (actual value will depend on how the interest compounds).

[femrap]

70. You could invest in

Certificates of Deposits within the Brokerage Account and then have FDIC vs. SPIC.

Money markets can fluctuate in value, but they haven't so far. If there is a big Liquidity Crunch, the money markets could fluctuate. I'm just sitting in pure cash. No one is getting any fees off of me.

But I did buy some puts in my Investment/Gambling Acct. I don't think you can buy options in a Retirement/401K account.

[hfojvt]

36. I know what you mean

When I had a 401K, I looked for a safe, Government bond fund. I thought I could put some of my 401K in t-bills. But the only option they had was a Mutual Fund that invested in t-bills and other government bonds. Which is almost the same thing, except the stupid fund did NOT pay any dividends. So instead of offering a fixed, safe rate of return, I had to hope that the price went up. If I recall, at the time in 2001, it's 3 year rate of return was negative.

I was not impressed. After I got fired, I held on to it for a while, trying to get to break even. I think I only came close before I rolled it over into an IRA. It was something like, in 6 months my investment of $720 returned $700. I mean, I think even savings accounts were paying 2% interest at the time.

[Sgent]

45. Put it in

a self directed brokerage account and buy US Treasury Bonds.

[girl gone mad]

50. Try a treasury money market fund.

Very liquid and less risky. Interest rates are nil, but it's a safer place to keep your money while you research better investment options.

[trof]

84. That's what I did with y 401-K and IRA.

I recommend it.
You'll have a wide latitude of investment vehicles.
I'm with Charles Schwab.
Their money market fund pays .01% or something like that, but at least you aren't losing any money.

They have a bond desk that is very helpful in finding relatively safe and conservative (sorry) investments.
I'm making 7-10% on some of mine, but I bought them years ago.

I would also recommend quantumonline.com
"QuantumOnline.com is your best source on the Internet for completely unbiased information on preferred stocks and other exchange-traded income investments. The basic goal of our website is to make it as easy as possible for income investors to easily find good income investments via the QuantumOnline (QOL) website. See our Income Tables menu above for comprehensive lists of all exchange-traded income securities trading on the major U.S. stock exchanges. We also cover a variety of other exchange-traded securities such as REITS, Closed-end Funds, ETFs, Royalty Trusts, etc. that can offer additional possibilities to income investors. See our Stock Lists menu for these securities."

It's free, but you have to register, establish password, etc.

Good luck.

[NeedleCast]

7. You should learn more about the investment options your 401(k) provides

You should be pissed at yourself, but not because you have a 401(k).

[brooklynite]

8. If I'm interpreting you correctly...

...you're saying that EVERY company that has equity shares which your 401k is invested in is crooked? That's a pretty broad statement.

[tk2kewl]

9. i do not trust the fund managers

but as a rule i do not trust speculators. and in the current environment i consider myself extremely risk averse.

[demosincebirth]

23. +100

[liberal N proud]

13. The corporations did this to us all as a way to get our money into their hands

They pass the money through us right back into their hands and then we take the hit, not them, when they fuck-up.

[tk2kewl]

15. what a racket 'eh?

:grr:

[earthside]

16. The biggest bubble.

Since 1979 when the 401K law went into effect -- basically forcing people into the stock market -- we have been in the biggest financial bubble of all time.

Yeah, most 401K plans have money market options, etc. But the truth is that most companies and governments who offer a 401K have it managed by very conservative, MBA-types who provided limited places to put your money and go crazy if you try to get your money into alternative or contrarian instruments.

Furthermore, most people have no business being in the stock market because they will not, cannot or are not educated enough to understand or keep-up with what the markets are doing -- so they leave it up to the 'broker-types' that run the plan. That's why so many Americans took such a big hit in 2008, from which they may never recover.

I hate that so many entities have turned to 401Ks for the employee retirement benefit, instead of pensions.

And, as baby boomers get older and have to start liquidating their 401Ks ... well, the bubble will deflate -- which is exactly why the 1% want to 'privatize' Social Security.

[tk2kewl]

18. you described my 401K experience to a T

fortunately I also have almost 20yrs of civil service under my belt as well, so unless they figure out a way to yank my vested pension out from under me I'm not going to starve.

[uponit7771]

31. +1000

[SOS]

17. A succinct take in the 401 (k):

"The 401(k) will turn out to be the greatest systemic financial hoax ever perpetrated on an unsuspecting public."

- William Wollman, former chief economist at Business Week

[alstephenson]

21. Ditto. It's a total scam.

[demosincebirth]

22. Savings accounts pay one percent. Money Markets pay .60. Unless it's

illegal, at this time and probably into the future, I'd stick with your 401k and a IRA variable annuity

[truebrit71]

59. An IRA Variable Annuity? Why would you want a tax-deferred vehicle inside another tax-deferred...

..vehicle...that's like putting on TWO condoms...

[demosincebirth]

73. You can have as many tax deferred accounts as you want.. The only ones

you can combine are IRA's, whether its an annuity, CD,s or regular Ira. I did'nt say to combine the 401k with and IRA.

[mod mom]

24. When my husband switched jobs in '09 we put the rollover in CDs at a local single unit bank.

401 Ks were nothing but a scam to increase the wealth of the top 1%ers. :mad:

[cpamomfromtexas]

25. Roth IRA with checkbook control

Basically this involves an IRA that owns an LLC giving you control over what the ira invests in and gives you options outside of wall street.

Perhaps this idea is worthy of another post?

[tk2kewl]

29. can one transfer 401k funds into such an instrument?

is there a any penalty or just the brokerage fees for transfer?

[cpamomfromtexas]

51. at retirement, but some may be able to rollover early, depends

on your situation

[RebelOne]

79. I was laid off my job in 2010. I was already 70 years old

and able to withdraw my 401K with no penalties. I put it into my savings account. At least, I was not watching the balance go down whenever I received my 401K statement. It is not making much money in interest, but at least the balance is not headed to the minus column.

[Incitatus]

30. Yes, no one forces you to get a 401K.

One can get a Roth and miss out on the employer contribution, but if the OP just broke even after 12 years that may not be a big concern.

[Cali_Democrat]

26. Rachel Maddow had a good piece on this a few weeks ago

Try to look for it. She discussed the fact that Wall Street is making a killing off the fees charged to run those 401k accounts. The people, of course, are getting stuck with the bill. The goal is to ultimately phase out social security.

[uponit7771]

28. OMG!! I worked for financials most of my career, it's criminal that you can't realocate your 401k at

...will!!

Big firms and companies don't want you to for fear people would become more active in their accounts and do what you're doing.

They have to have money in play, having it on the sidelines actually reduces their net worth

[tk2kewl]

33. i can and did reallocate into a stable income fund

see #3 http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2241474#2241521

but it looks a bit more complicated if i dont want it in a fund. see #11 http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2241474&mesg_id=2241601

[cbdo2007]

37. It pissed me off that people like you don't understand their 401K....

and how to make money from it.

But I know that's fighting a losing battle here at DU.

[tk2kewl]

38. Enlighten us with your financial prowess, won't you?

:shrug:

[cbdo2007]

43. Actually, no I won't....

No sense getting attacked over it like has happened many times before.

If you don't understand it, go get a couple of basic stock market/investing books and do some research. Most like they'll have more of an impact over your future financial decisions than some guy on the internet.

Seriously though, looking back at the past 12 years....to gain 0% you would literally have to be trying to lose money.

[tk2kewl]

44. I pretty much avoid attacking people

however I do abhor know it alls

[cbdo2007]

53. So....people who do research are "know it alls"??

If you don't want to do the research, you should find a financial advisor and do what they say. Then at least you'll have someone to blame rather than yourself.

[backwoodsbob]

74. hear ya

8 years with this company...no rollovers..I'm up to almost 150k..I'll retire a millionare

It's not that hard to do

[Dawgs]

39. +1. My wife and I are doing quite well with ours.

Sad to see that so many don't understand how it works.

[tk2kewl]

41. congratulations to you and your wife

please see #37 above http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2241474&mesg_id=2242013

[JoePhilly]

57. +100

Agree ... see my posts below ...

[stevenleser]

64. I understand your point but see my #62, I have no problems with 401Ks as a supplement

to a pension. I think if you really do the necessary research, you can make a lot of money. The problem is that you can also lose money or have a very mediocre result. Workers who retire should have a pension coming to them. IF they have that and the 401K is a supplement, then its a great deal.

[jeff47]

67. Well, let's see....all the funds I am allowed to invest in are down.

So yeah, clearly it's just my lack of understanding. Has nothing to do with the folks who worked out a sweetheart contract with my employer to "manage" the 401k and direct all the money to their lousy mutual funds.

[cbdo2007]

80. HAHAHA - your post shows the most basic misunderstanding of people in the market.

If the funds you are allowed to invest in are "down" then why aren't you putting more money into them? Would you rather buy them when they are "up"??? HAHAHAHAHAHA

The real question is...."down" in what time period? Also, you should do a search for dollar cost averaging so that you actually understand how 401K contributions work.

As has been said many times in this thread - it's almost impossible to LOSE money in your 401K unless you literally buy on the absolute highest day and don't contribute any more and then sell on the absolute lowest day, and if that really is your strategy then I agree, the stock market isn't for you...nor is probably driving, or cooking dinner because it really is that basic of a concept.

[Name removed]

85. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[eridani]

75. Not clear why you assume that all 401ks have the options that you seem to think they do

Most are quite limited.

[deaniac21]

46. Sounds like you need to rethink your contribution options. It's

almost impossible to lose over 12 years.

[tk2kewl]

48. 2 big hits

2001 2008

[JoePhilly]

56. So what .... let's take the drop to 6500 .... if you were still contributing ...

YOU MADE MONEY ...

As long as you did not sell, from the crash of 2008, through the fall 6500 in march of 2009, you MADE MONEY, because during that time you were buying LOW ... any contributions made at 6500, or 7500, or 8500, have had HUGE gains on those. And, you have no loss on most of the rest.

Back in 2007, the DOW spent about 12 minutes above 12.5k ... and so during that time, you bought some, but not much. You bought many more shares during the down turns.

[Liberal_in_LA]

47. k&r

[RUMMYisFROSTED]

49. T-Bills?

:shrug:

[sarcasmo]

54. 401k was a wall street scam from the jump.

[JoePhilly]

55. That makes very little sense.

Back in 2007, when the DOW hit 14k, you must have also passed the "break even point".

And ... if your company has any match, you passed it.

And ... given the fluctuations, you've been buying as low as 6500 ... and under 11k for about 3 years.

As a person who manages their 401k very closely, I don't buy your story. The Dow was about 12k back in the spring, you would have passed break even then too.

And oh ... most 401ks have money market, and other "cash like" entities.

It might be that your company has a crappy 401k plan, but most aren't like that.

I don't buy this.

[stevenleser]

62. 401K is great, if it is in addition to a pension. Unfortunatly it replaced pensions for most people

There is no substitute for the safety of a guaranteed annual wage that is between 50% and 80% of your last year's income once you retire.

If you hit it big with a 401K, that's great, but its just not the same.

[JoePhilly]

65. While I would agree on the pension point ...

IF it was going to cover 50% TO 80% of your prior income, but most Pensions never covered that high a precentage, because your expenses should be lower as you hit retirement.

The OP attacks 401ks claiming that its taken them 12 years to break even. That's BS.

[Sherman A1]

63. Agreed

:thumbsup: One suspects that it is perhaps just not as high as was hoped. I know they have all taken hits along the way and I certainly wish mine was higher, but tis not the case presently.

[barbtries]

61. i have issues along those lines

after a lifetime without any kind of retirement account at 52 i got a job with a 401k. but the investment choices leave me cold. there isn't even one option for putting my money into green technologies for instance.

but for me it's almost moot since i've had to raid it twice already with my son in college now. i still don't expect to retire in this lifetime. so whatever.

[SomethingFishy]

72. Never opted in to the "401k"

Never wanted to. Just like I don't want to take my savings to Vegas and bet it on the tables. I'm not real big on making money I didn't work for or earn.

[fascisthunter]

76. 401k's are a scheme to force Americans to pour money into Wall Street

[DCBob]

77. Most 401K have all sorts of investment options...

check with your company. BTW, most companies match your contribution up to a certain percent.. usually 3-5 percent.. so that is instant profit even if the market does not do well.

[dionysus]

81. are you sure? any 401k worth it salt has money market and bond funds. you should double check...

[BreweryYardRat]

82. My sorry excuse for a job had the infernal gall to offer me the chance to participate in their 401K.

It was, pretty obviously, a mass-mailing to all employees, for the following reasons:

I'm a temp. They don't give me benefits. They don't pay me a living wage, and it's on-again, off-again work. I can't afford to invest with the pittance they pay me, let alone lock it into an account where I can't withdraw it without enormous fees.

[TheManInTheMac]

83. I've never seen a 401K that didn't have a low-risk/low-yield

option. But remember: No matter how you invest your money, short of keeping it in a coffee can buried in the back yard, banksters and brokers are going to be running it.