401(k) Plans No Longer Make Much Sense for Savers
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@djls45 said in 401(k) Plans No Longer Make Much Sense for Savers:
@Gąska said in 401(k) Plans No Longer Make Much Sense for Savers:
@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
so really your only "safe" bet is gold boolean
Isn't it already illegal to own gold in US?
"Not legal tender" doesn't mean "illegal."
I mean, there was something about USA confiscating every ounce of physical gold back in the 60s or so? I wasn't sure if those laws were repealed since then or not.
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@Gąska said in 401(k) Plans No Longer Make Much Sense for Savers:
@djls45 said in 401(k) Plans No Longer Make Much Sense for Savers:
@Gąska said in 401(k) Plans No Longer Make Much Sense for Savers:
@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
so really your only "safe" bet is gold boolean
Isn't it already illegal to own gold in US?
"Not legal tender" doesn't mean "illegal."
I mean, there was something about USA confiscating every ounce of physical gold back in the 60s or so? I weren't sure if those laws were repealed since then or not.
They made it illegal and tried to coerce people into turning it in back in the 1930s right before the price was changed from $20/oz to $35/oz.
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@Gąska 1933 was when that went into effect. Repealed in 1974, but seems to have been effectively ignored since the 1940s.
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@Unperverted-Vixen said in 401(k) Plans No Longer Make Much Sense for Savers:
To make it simple: let's pretend I have a $19,500 annual budget for retirement savings. (AKA the annual 401(k) maximum.) I need to figure out what will work out better for me: paying tax on that amount now, or paying tax on it after retirement.
There's no sense in simplifying, because no one actually looks at it this way. At that income level (i.e. one where you'd be actually be able to afford putting $19.5k in retirement), your focus is an overall tax reduction strategy driven by wealth management goals including retirement savings, and many other things like education for children, trusts, whole life policies, etc.
And most importantly, at that income level, you have people who's job it is to figure out what works better for you.
@PotatoEngineer said in 401(k) Plans No Longer Make Much Sense for Savers:
But what if you spent that money on a coke bender instead?
rich dudes in movies do a lot coke benders
coke benders make you rich
invest in coke benders
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@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
There's no sense in simplifying, because no one actually looks at it this way. At that income level (i.e. one where you'd be actually be able to afford putting $19.5k in retirement), your focus is an overall tax reduction strategy driven by wealth management goals including retirement savings, and many other things like education for children, trusts, whole life policies, etc.
Well, then I’m doing it wrong. 🤑 I’m purely trying to maximize income in retirement, with an eye to retiring early (age 50-55). Any tax reduction that happens today is more a side effect rather than an end goal. (I.e. I’m putting my 401(k) funds in a traditional account because I expect to pay less than 24% tax at retirement, not because it reduces my current-day tax burden.)
(I also don’t and won’t have kids, so my case is probably simplified. I just need enough to get me to when I die, and then my sisters can have whatever is or isn’t left.)
And most importantly, at that income level, you have people who's job it is to figure out what works better for you.
I’m really doing it wrong.
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@Unperverted-Vixen in that case, I'd strongly recommend you meet with a financial consultant/planner (even if it's just a guy at your local Ameriprise). I have a couple friends who do it for a living. But for me, finding my guy was literally a life changer --- their job is not to make you a better return on money (which I thought), but help you refine, understand, and achieve financial goals (like yours, of retiring early).
It's a lot more emotional/psychological than it is numbers. They've seen a lot of smart people with nearly the same goal, but who are older and made a bunch of mistakes.
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@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
I'd strongly recommend you meet with a financial consultant/planner
I've done that via my IRA account (I roll all previous company 401Ks into that). I meet with my advisor (phone) a couple times a year and we talk about plans/expectations/etc. About a year ago, we did a number crunch looking towards retirement - which left me feeling a lot better about that!
@Unperverted-Vixen , I'm a lot like you it seems - single, no kids, was hoping to retire mid-50s. I'm looking at mid/late 60s now - 2 reasons: I like my job (been there a year now), and if I retire from there after 10y, they pay medical!
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@dcon said in 401(k) Plans No Longer Make Much Sense for Savers:
'm looking at mid/late 60s now - 2 reasons: I like my job (been there a year now), and if I retire from there after 10y, they pay medical!
That's a nice benefit - alas, my current company dropped that before I joined. That said, mid-50s is still 20 years away for me, so there's lots of room for things to change.
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@dcon those advisors really help! I "grew up" learning how to save... I think my mom started a retirement account for me at like 14, first job? Took me over 20 years to learn how to manage wealth
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@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
@dcon those advisors really help!
The trick is finding a good one... At a previous IRA company, my advisor liked to work directly in stocks (and margins). During a time of good growth, my account lost 1/2 its value. "Fired" him and moved companies. And told my new advisor "I've been burned by individual stocks, I'd rather stay in funds" - that strategy has worked pretty well.
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@dcon said in 401(k) Plans No Longer Make Much Sense for Savers:
The trick is finding a good one... At a previous IRA company, my advisor liked to work directly in stocks (and margins).
Ooh that sounds terrible. Totally different skillset I heard, like a Html/css guy dicking around in assembly.
And the commission-based advisors (they get fees based on transactions / transaction types) trend to push highest margin products. I went with fee-based, that just take a percentage-based fee. Trust is very important
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@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
I went with fee-based, that just take a percentage-based fee.
That's what I have now (for others: that's a percentage of the total value, so as your assets grow, they get more - so there's an incentive for them to grow your acct value). As I remember, that "bad" one was a commission based one.
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I've been putting most of my post-tax wealth into one stock basket, as it were, for the past 8 years.
Fortunately, here's how that basket has performed (not a misrepresentation or clever cropping):
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@apapadimoulis said in 401(k) Plans No Longer Make Much Sense for Savers:
And the commission-based advisors (they get fees based on transactions / transaction types) trend to push highest margin products. I went with fee-based, that just take a percentage-based fee. Trust is very important
Apparently, there's a very special sort of slimeball out there, that claims to be fee-based, and then takes your fee and invests your money in whatever gives the highest commissions.
The new magic word, from what I've heard, is "fee-only".
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Thread is TLDR but I misread the title as
401(k) Plans No Longer Make Much Sense for Slavers
