Frontline - The Retirement Gamble a must see........

Discussion in 'The Howard Stern Show' started by Ving, Apr 23, 2013.

  1. Ving

    Ving Well-Known Member

    Reputations:
    50,016
    Joined:
    Jan 16, 2012
    Messages:
    8,412
    Likes Received:
    6,689
    If you have, or ever will have a 401k, I highly recommend you watch this show. You will learn how Wall Street is fucking you out of your retirement in undisclosed fees and bullshit financial products, and how their lobbyists are making sure they never have to disclose their complete conflict of interest.


    http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/
     
  2. SouthernListen

    SouthernListen I don't follow the crowd. Sorry about that. VIP

    Reputations:
    240,892
    Joined:
    Jan 16, 2012
    Messages:
    38,753
    Likes Received:
    39,509
    That's true. But that's a little like complaining about the cost of your diet coke at a Steakhouse selling you $50 steaks that taste like horse meat. It's a drop in the bucket compared to how you're getting screwed elsewhere.

    1. "Financial Repression". The Federal Reserve and government work hand in hand to ensure that savers make negative real interest rates on CD's, gov bonds, etc. (you earn 2% and inflation is 2.5%, etc). This is so they can fund massive deficits at low interest rates and pay back their debts with depreciated dollars. If they had to pay market rates to induce savers to buy bonds, they'd be paying 8-10% or more now. They are, in hidden form, doing what Cyprus did. They are fleecing bank account holders out of potential income to help banks and governments and their cronies. The difference is, Cyprus only did it to big fish. Here, it's old widows trying to live on $100K in savings getting fleeced.

    2. 401k investment options. They usually SUCK. Most plans don't allow you to hold much gold, don't allow you to pick various niche' funds to properly account for world economic situations, and are pretty generic at best. Wanna buy US blue chip consumer staple stocks? Can't do it. You wind up with a fund that has Amazon.com and Apple mixed in with it, two completely different types of business. Wanna buy currencies to take advantage of exchange rates improving in more responsible countries? Can't do it. Want to buy stocks in SE asia? Nope, you'll get a lot of Chinese and Japanese stocks in the mix. Completely different economies headed in opposite directions. Want to buy bonds? Can't. You get a "bond fund", which means if interest rates rise you immediately lose value as their NAV is adjusted constantly rather than having the bonds be held to maturity like with a laddered portfolio you create yourself.

    3. Future plans are being discussed to possibly tax or "levy" large balances in 401k plans (for the sake of fairness) or require a certain percentage of holdings to be US bonds in exchange for favorable tax treatment.

    4. Fed "quantitative easing" and MBS buying means money seeking a decent return is forced out of savings accounts and into the stock market rather than bonds and other forms of "savings". This was fine this year, but eventually this bubble will also burst, leaving many unsophisticated 401k investors with big losses just as they need the funds in retirement.

    But yes, with interest rates and returns so low these days, the fees they charge make a huge dent in one's savings. Beyond the amount matched by the employer (assuming you are or will be fully vested), you may be better off putting money in a Roth or standard IRA so you control it and can pick investment vehicles with reasonable expenses.
     
  3. Ving

    Ving Well-Known Member

    Reputations:
    50,016
    Joined:
    Jan 16, 2012
    Messages:
    8,412
    Likes Received:
    6,689
    Watch that program, I'm sure you will like it, that link above has it online. Trust me it's not a drop in the bucket when you use a proper compounding calculation, it's massive.