Comments on: Retirement Dreams Disappear With 401(k)s

60 Minutes: Older Americans' 401(k)s Have Plummeted; Many Fear They Will Never Get To Retire

[Darteng]

Your story failed to mention that some people have not lost money in their 401K or IRA. Your story sends the message to young people that saving for retirement is a risky venture. It's only risky if you choose to invest your retirement in risky funds, like the stock market. My wife and I are 60 years and have not lost a dime in any of our retirement accounts. Granted, we've only made 2% to 8% over the years in interest but our principal is garanteed. Greed and ignorance have created this problem. My Dad (rest his soul), who lived through the depression, taught me nothing good is easy. Get up every morning, go to work, do the right things, and put your money in safe investments. A simple conservative life style would have kept these people from losing their life savings. That's the lesson we should be teaching our young people.

[skimoil]

Can anyone help me find Kathleen Coleman?
I've called several Kathleens C's in NY---and have not been able to find her.
I may have a job offer for her-----that she can do virtually from NY or where I am in NC.
I run a small business----and could use the help of a go-getter/get it done type, which she struck me as being. Please hook me up if you can. Kathleen-----google skimoil and give me a call? RJ

[d_sprague1]

I worked for a company with an Employee Stock Ownership Plan - an 'employee' owned company. I have been unemployed for over 2 years, caring for my mother (she has Alzheimer's, chronic leukemia and chronic pain from shingles). it would be nice to be able to use some of the $400k I have in the ESOP but an IRS regulation allows my ex-company to control my funds for another 2 1/2 years. I have spent 2 years trying to get someone to listen - nobody cares anymore ...

[Yadyee]

The financial industry needs a complete overhaul. It is outrageous what has happened to the people of the U.S. Don't give me that crap that it's our fault!! Something has to be done to change the current regulations so this never happens again. The result has been devastating to people.

I speak as a representative of the American people that better regulation needs to be implemented to protect us from the false representations of the financial industry. The whole system needs to be more transparent. When I go to the dentist to get a cavity filled, I know exactly what is going to happen and how much it will cost me.

When I go to my financial planner, it should be required that they provide me with a detailed list of all of the costs/fees that are involved with all of the funds, including their own fees. It should also be disclosed whether or not they are involved in a brokerage or other business that can benefit from trading in my accounts. As is, it is not easily understood and there appears to be things going on that I am not aware of. When I asked my financial planner about this, I got about 10-20 pages of information that I had no idea what it means and I have a Ph.D. in Business Administration. When I ask them I don?t get a straight forward answer. I feel as though I am constantly being deceived.

On behalf of the citizens of the United States, I demand that change occur to protect us from such con men like Bernie Madoff, Allen Stanford, etc. We need to be protected and you need to step up your efforts to protect us. Hire more people in the SEC. Hire more regulators. Recruit top students from top universities. We need bright minds to combat the criminals in our society.

[dancordoba]

I am sorry for the losses I have read about. People may want to know that they can truly self-direct their retirement a great site to visit is http://www.myrealestateira.com

[fiduciaryadvisor]

You must not give up on the 401k. Its predicted that within 15yrs over 40% of retirees will be at or below the poverty level. If this happens we will not be able defend our country. If you think things are bad now, just wait. Imagine a country without retirment money.
There is plenty of blame to go around and most is in the lap of the Financial Service Industry. They are sucking 3-5%/yr from your accounts without you even knowing it. Why would you trust this industry, are you not paying attention!!! Some clown mentioned that the fees are minor, a well balanced portfolio should return 7.5-8%/yr and they are taking 3-5%. Is that minor? The report said that you would be lucky to find half your fees and it was correct. You can find management fees/expense. You must go to SAI to find brokerage fees on portfolio turnover and you will never find bid/ask spreads, market impact cost or delayed or canceled trades fees let alone the opportunity cost due to cash holding on portfolio's that are turning over 100-200% per year.
Next we must blame the employers who pay no attention to their companies plans since the employees foot most if not all the bill through fees which are shared by as many as 14 different people or organizations. Wake up employers, your plans are not working!!!
And lastly we must blame ourselves the ultimate investors. With as little as 2 -3 hours of concentrated study you could learn how to not only build your wealth using 401k, you could help educate your employer so you can have an excellent plan and lastly create a portfolio that will survive through time. That does not mean it will not fluctuate but will get you to a retirment you can live with. All three parties are to blame Financial Service, Employer and Employee. Don't give up on the 401k, it can be fixed and should not cost 3-5%/yr in both good and bad years. It should cost .75% or less, all in -everyone paid!!!

[401kmaster]

Again I see people saying theirs no good company's out there to invest with. Yes there is THERE CALLED FIDUCIARY ADVISORS . THE SELL NO PRODUCTS TAKE NO COMMISSIONS AND HAVE FULL FEE DISCLOSURE THEY CAN ONLY HAVE THE BVEST INTERESRT OF THE EMPLOYEES. THE BIG BROKER DEALERS DON'T WANT YOU TO KNOW THIS. BECAUSE THEY DON'T ACCEPT FIDUCIARY RESPONSIBILITY IN WRITING. ALSO THAT MEANS THE ADVISOR IS PUTTING HIMSELF AT RISK. THEIR THE HIGHEST EDUCATED AND MOST HONEST. THE MUST PUT IT IN WRITING THOUGH, ASK YOUR BOSS TO FIND A FIDUCIARY ADVIOSR TODAY. A GOOD PLASS TO START WOULD BE NAPFA.ORG THESE ADVISORS CAN'T SELL ANY PRODUCTS SO THEY ELIMINATE A HUGE CONFLICTS OF INTEREST. WATCH OUT FOR THE SHELL GAME NO ONE CAN BEAT THE MARKET IF THEY TELL YOU THAT MOVE ON. ALSO DAN SOLIN WROTE A GREAT BOOK FOR EMPLOYERS AND EMPLOYEES, THE SMARTEST 401K BOOK YOU'LL EVER READ. YOU READ IT AND YOU'LL GET EVERYTHING YOU NEED. YOU CAN FIND IT AT ANY LOCAL BOOK STORE.

[tarha_c]

The 1983 Social Security amendments are today often invoked as a process model for conducting politically difficult entitlement reforms. Success in reforming entitlements now depends not only on whether negotiators can summon a similar bipartisan spirit, but also on whether they are willing to define the problem as transparently as negotiators did in 1983, and on whether they avoid analytical shortcomings that have set back subsequent reform efforts.


Social Security reform will always require difficult compromises between individuals with strongly-held opposing views. Today, negotiators face a daunting additional barrier: fierce disputes about the nature, size and immediacy of the problem to be solved.


There is today a significant danger of misremembering and misapplying the lessons of 1983. The 1983 effort succeeded in large part because participants from across the political spectrum had a shared understanding of Social Security's financing shortfall. Analytical methods were employed that prevented issues such as Trust Fund accounting from injecting confusion and discord into the discussion.


Ironically, the 1983 amendments themselves, and subsequent accounting changes, have inadvertently destroyed this shared understanding, giving rise to pervasive misimpressions about Social Security's current finances ? and about the intended effects of the 1983 reforms themselves. Specifically, negotiators in 1983 did not intend to run decades of surpluses to amass a large Social Security Trust Fund, nor would they have believed that doing so would effectively pre-fund benefits in deficit years now projected for 2017 and beyond.


Odin.... you keep your nose out of this! I am showing them a lesson and if they want to see it with their own eyes let them see!

[tarha_c]

retirement funds for a majority of American workers, affecting their psyche and their future. If you are still young enough, there's time to rebuild and recover, but if you are in your 50s, 60s or beyond the consequences can be dire,

OK....here is your Current Notice. You have been notified by the media, by paying attention and not watching your daytime soaps.... this is your warning.

SOCIAL SECURITY FUNDING will be next because social security isn't really social security. How many of you know that?

[SWC-SF]

The story was good, but only scratched the surface of the issues and how we got here.

One of the benefits to employees of 401(k)s is "portability" - the ability to take your account with you when you move jobs. Traditional pensions aren't portable, since one has to work at the same firm for often more than a decade before earning any benefit. 401(k)s offer a better choice today's mobile workforce.

One of the benefits to employers is "defined contribution" - companies make a contribution and/or match the employees contribution and the company has satisfied **** obligation. Pensions offered a nearly endless obligation because the are "defined benefit" - they state a certain income the beneficiary will receive years out in retirement. The company owes this in the future, regardless of how its investments perform. This is a HUGE liability (reference GM, Ford, states and municipalities).

Both these benefits are valid. However, both of these attributes of 401(k)s cost money to administer. First, because every employee needs their own account. So instead of a 10,000 employee company having a $500 million dollar pension fund, run with all the efficiencies and low fees of a single large fund, the company's plan would need to have 10,000 accounts each averaging $50,000.

A second source of additional costs is the the "need" (or desire) for daily access (trading, account balance, loans). The desire for daily access is absurd. Retirement is a 30-50 year investment, what is the need to trade it every day? Sophisticated long-term investors take a very measured view of trading and rebalancing. The cost of running a daily-accessible fund is much. much higher than a less-frequently accessible fund. But the shift of investing from a true long-run investment to a quasi-personal financial product drove the need to have more and more "features" - such as daily access. This all costs money guys, so no one should be surprised that there are all kinds of fees.

It really too bad that this happened. It has been a long transition over 20+ years. As a 20 year veteran of the pension investment industry, many saw this happening. Many of us agrued against the trend of using high-fee vehicles with features that were unneeded, but the demand from employees and employers was too great. The medicine tasted too bad to take and the disease was too long in acting for the patients to understand.