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

[monkey8473]

Mutual funds do not and cannot hide their fees - they are explicitly stated in every prospectus and if you are investing in a 401(k) you are entitled by law to a copy of a prospectus for every fund you can choose to invest in.

[hickfrmmt]

Would anybody care to comment on why the mutual funds should be able to hide thier fees? I'd like to see some of you capitalists justify that.

[monkey8473]

yadyee - well, harsh as it may sound, YOU chose to hire this financial planner, so the ultimate reponsibility rests with you. In choosing a FP you need to compare historical investment results, make sure they understand your risk tolerance, how soon you will need the money and for what reasons, his/her fees, do they also sell product or are they fee based only, how often they will meet with you, etc.

[Yadyee]

Dear Fellow Citizens,

Could someone out there help me to understand the financial planning industry. We hired a financial planner to "help us" invest our money and hopefully make money when the market goes up and reduce our risk when the market goes down. Over the past three years, they have been 2% under the benchmarks every year until this past year when they were over 9% under their benchmarks.

Why is it when we had our money with a financial planner (60 stocks/40 bonds), they sat there while this mess was going on and refused to make any adjustments to our portfolio? At the beginning of this (Feb, 2008) they said it was going to be a short and shallow recession. They did not make any recommendations as we were losing hundreds of thousands of dollars in 2008. It was only after I contacted them that they made any changes to the account.

Please do not give me it is my fault for not making the changes. We pay a planner to do this for us. Am I with the wrong planner? Or is this common practice that they do not make changes so they do not get sued?

If I wanted to manage our money, I would have saved us hundreds of thousands of dollars. I chose not to do this, and it looks like it was a mistake. Help me to understand why our planners did not make any moves to reduce our risk. Instead they said you have to wait 20 years to really judge us by our performance. I could be dead by then.

We are just trying to understand how this industry operates so I (and my fellow Americans) do not make the same mistakes again. We are trying to understand the industry so we can make intelligent recommendations earlier. Is that common practice not to make changes until a client makes a recommendation to change their own portfolio? Is the financial planning industry afraid of lawsuits if their changes are incorrect? I have heard that they do not make changes because they are afraid of under performing the indexes.

Please help us to understand how the industry works so we can maximize our profits and minimize our downside.

[monkey8473]

The point is - manage your 401(k) and minimize your losses. Not one 401(k) had to get "hammered". If self directed - and 99.9% are - you as an individual had the opportunity to put your investments into a stable fund - it is required by law under IRC 404(c). But no - the gist of this article and the comments of others is that it is not the PARTICIPANTS' fault their account got hammered - it is the nasty bankers and CEOs - capitalist pigs! Pure propaganda.

[newsjunkie44]

401k accounts won't go back to the numbers we saw a year ago as the economy driving those results was a "false" economy based primarily on the consumer demand generated by the wealth in our homes that were increasing in value at unsustainable rates. One wonders if investments standards and safe guards were in place on housing loans and such, how the financial markets would have actually performed? Our 401k accounts certainly would have been worth less, but probably not hammered like the what has taken place recently. If my 401k account is down 30% form the "high", am I really only down only 10% (or maybe even) due to the "false "high" that should not have happened?

[awacs767]

First, a 401k is self directed and it is up to you to control what is happening to your funds. I keep track of mine on a period basis. Since 12/29/2006, my 401k has gained $50,866.69 but that is a little misleading since I contributed $53,122.07 in that time span which gives a net loss of $2,255.38 and that loss is all in the company stock area. I have moved my money from different accounts and as the market became more volatile, I put my funds into a stable value fund with a quarterly guaranteed return. (Total value of my 401k today - $563,116.80).

Second, keeping track of the fee's charged is difficult and there is nothing that the employee can do about them. The company needs to find the company with the best return at the lowest price for their employees. Question, does the company receive an incentive to use the fund selected for the company 401k?

[monkey8473]

And the ignorance of people buying into this article and posting here is frightening - pointing fingers and trying to shift blame on others - the "bankers", companies, etc. Wake up people and take control of your lives - which is exactly what a 401(k) does - it gives YOU complete contol over the performance of your retirement account, rather than is being in the hands of an investment committee that has to take into consideration the GERNEAL WELFARE of all plan participants, often one with FREE employer match money, if you take advantage of it, and profit sharing comtributions as well. Everyone's risk tolerance is different, and investment objectives as well - a 60 year old and a 25 year old should NOT beinvested in the same things! A self directed 401(K) enables each to invest for their time frames and investment objectives. Otherwise this whole article and those who buy into it are simply on a witch hunt - looking for some evil banker or business to blame. Read Atlas Shrugged and learn something.

[monkey8473]

This article is pure liberal socialist anti capitalist BS. Every 401(k) that I know of is not only SELF DIRECTED, but also has daily valuation and MULTIPLE INVESTMENT options. In this era of lack of personal responsibility, no one wants to accept the fact that AT ANY TIME they could have sold stocks, bonds, and or mutual funds invested in them, and parked their investments, AS I DID, in money market funds and ridden out this storm. They were happy as clams riding the market up - they just never bothered to manage their 401(k) and GET OUT. Bulls make money, bears make money, and as the old saying goes - hogs get slaughtered. GREED is what got their 401(k) to the 201(k) we keep hearing about - greed and lack of personal responsibility. And this article is garbage.

[dkvw99]

Yes, people have realized big losses in their 401ks, but they wouldn't be huge losses if the gains preceding them hadn't been GIGANTIC. This is a dangerously misguided newspiece. Trust me - if enough people start believing this kind of nonsense - if the majority cannot grasp the meaning of "investment risk" - the capitalist society that we've built will be legislated out of existence. Wake up!