Can I have your password please?



  • I left a company about 3 years ago, and called to see if I could get my 401k rolled into my current 401k, or withdraw it.  When I got to talk to a representative, they wanted to verify my information, so they asked me my password.  "Uh... what?"  I thought.  Thinking they were probably talking about a PIN or something to validate you, I said I didn't know it, and asked if I could find it somewhere.  "It's just the regular password you use to log into the site."  ..... Ok, first off, that means you're storing my password in a retrievable form.  It means that customer reps have access to my password.  It means I have to spell the password to someone over the phone (possibly involving something like "Capital p, 4, dollar sign, dollar sign, w, zero, r, d, exclamation point, zero nine nine").  WTF?



  • ... they were asking you to verify your PASSWORD?

    Jebsus ...



  • Actually, it doesn't require them to store it in retrievable form. They could just manually enter it and then do the usual hashing.



  • @henke37 said:

    Actually, it doesn't require them to store it in retrievable form. They could just manually enter it and then do the usual hashing.

    I thought about that, but the chance of mishearing something and typing it in wrong is pretty great.  Also, you still have to say your password... over the phone... to a random person.



  • On a side note I'm not an American so this 401k thing is a bit of a mystery to me. Do you get one of those per employer? If so could you have like a dozen by the time you retire? Also from what I understand that money is earning interest rate from investments? If so can you lose it if your investements fail?



  • @Sutherlands said:

    Also, you still have to say your password... over the phone... to a random person.
    Ask if/how exactly they hash passwords. Then find a collision and tell them that password instead. Your real password is still secret. Problem solved.



  • @DOA said:

    On a side note I'm not an American so this 401k thing is a bit of a mystery to me. Do you get one of those per employer? If so could you have like a dozen by the time you retire? Also from what I understand that money is earning interest rate from investments? If so can you lose it if your investements fail?

    I have (which is so far 2).  When I left the other company, I had the option to roll the other one into my current one.  Not sure why I didn't.

    edit: Oh, and the investment thing.  Yeah, I lost 17% last quarter.  😞

    @fatbull said:

    @Sutherlands said:
    Also, you still have to say your password... over the phone... to a random person.
    Ask if/how exactly they hash passwords. Then find a collision and tell them that password instead. Your real password is still secret. Problem solved.
    Yeah, I'll be sure to do that.  Hours of work to avoid telling them a password that they probably show on the screen, which I didn't have to tell them anyway because it was on the website.  Idiot.

    @fatbull said:

    Filed under: <FONT color=#698d73>quantum chromodynamics</FONT>, <FONT color=#698d73>may not be my actual credit card number</FONT>, <FONT color=#698d73>Totally absolutely positively 100% serious. NOT.</FONT>, <FONT color=#698d73>easy</FONT>, <FONT color=#698d73>Your real password is still secret.</FONT>, <FONT color=#698d73>Problem solved.</FONT>
    tl;dr

     




  • Screw whether or not you lost money last quarter. Most people lost money last quarter. That's how the stock market works. If you didn't lose money last quarter it's because you were parked in cash or bonds earning almost zero money.

    The real question is how much did they charge you to lose that money? - because you can lose money at-cost with a decent index fund, paying about 0.1% annual expense ratios, or you can lose money with your fancy "actively managed" fund and pay 1.5% annual expense ratios. (My last company had an S&P500 index fund with an expense ratio over 1%. Honestly? Vanguard can do it for 0.06%. What did you do with that extra .94% a year? Smoke it?)

    That is the real "wall street screwing you over", not the nonsense the OWS crowd thinks is the problem.

    If I were you, I'd roll the old one over into a rollover IRA at Vanguard. Pretty sure you can do that. But you can continue to finance the executives' yachts with your current plan(s) if you'd prefer 🙂



  • @fennec said:

    The real question is how much did they charge you to lose that money?

    I dont worry about fees at all. MY only concern is NET (and not talking the MSFT "dot" kind). Although I did slightly lose in Q3 2011, I am still well up for the year (about 8.4%), and most of my money is in funds with fees that are on the high side (avg is abot 1.4% - some higher some lower). But these fund have consistently weathered the bad times better, and have only underperformed in good times by a small amount [which is the anticipated behaviour of a hedge fund] so I have no problem with people making a profit, provided my ROI is within my desired range. Heck, I dont even care is the CEO (or any other executive) at the firm made a few hundred Million.



  • Nice, the limit of the plan, according to wikipedia is "$16,500 for 2009, 2010, and
    2011.". At the same time, in my country, the limit was "€650" 😞



  • Phone: Please say your password.

    Are you crazy?!  I'm not gonna say my password over the phone!

    Phone: Password accepted.



  • @TheCPUWizard said:

    [quote user="fennec"]The real question is how much did they charge you to lose that money?

    I dont worry about fees at all. MY only concern is NET (and not talking the MSFT "dot" kind). Although I did slightly lose in Q3 2011, I am still well up for the year (about 8.4%), and most of my money is in funds with fees that are on the high side (avg is abot 1.4% - some higher some lower). But these fund have consistently weathered the bad times better, and have only underperformed in good times by a small amount [which is the anticipated behaviour of a hedge fund] so I have no problem with people making a profit, provided my ROI is within my desired range. Heck, I dont even care is the CEO (or any other executive) at the firm made a few hundred Million.

    [/quote]

    The problem with trying to outperform the market by 1.4%+ is that you're going to have to take some additional risks, and those risks will typically play out against you from time to time. Like in a financial crisis. If you're happy with your fund, that's great. 🙂 It's kind of hard to find funds worth their salt in the 401(k) plans typically offered by employers, though; your employer typically doesn't care how much money you spend on fees, but how much money they spend on fees.

    I personally can't tell the good actively-managed funds from the bad. I don't think most people can. And when you can't measure quality, bad products drive out the good. (See also: antivirus software for the masses). It's also really easy to beat the market for a year, harder to beat the market for several years, and really hard to beat it for the ~40 years 'til I retire. That's why I don't bother with actively-managed funds; don't worry, I'm not some OWS weenie who thinks it's a crime to make money. 🙂

    I also assume your preferred fund is doing something more than just index the S&P 500 with a 1.4% expense ratio. 😛



  • @fennec said:

    ...snip...

     I dont disagree with anything in your post. The funds I am in do tend to under perform during the good times (i.e. lower yields than the 'best" performing, and that is a tradeoff I am willing to accept. I am also very fortunate, that I own the company, so the "company interests" and my personal interests are largely aligned [of course, there is the "greater good" to consider - so I dont always get my way]. Finally, the fund is a very small one so that they are actively looking at individual companies with (often niche) potentials and adjusting the holdings accordingly so there is little correlation with the S&P or other "big" indices.



  • @fennec said:

    Screw whether or not you lost money last years. Most people will lose money next years. That's how the stock market is about to fucking collapse.
    FTFY.



  • @TheCPUWizard said:

    I am also very fortunate, that I own the company, so the "company interests" and my personal interests are largely aligned [of course, there is the "greater good" to consider - so I dont always get my way].


    Darned 1%ers. 😉



  • @toshir0 said:

    That's how the stock market is about to fucking collapse.

    When you're done with your time machine, I believe Raymond Chen would like to borrow it.



  • @Scarlet Manuka said:

    @toshir0 said:
    That's how the stock market is about to fucking collapse.

    When you're done with your time machine, I believe Raymond Chen would like to borrow it.
    I'm too dense for this clever joke... maybe a meme that I don't know of ?

    What's the relation between Raymond Chen, the world economy and a time-travel machine ?

    (sorry again for what could look like candor but it will be even sweeter to flame i guess !)



  •  I'll bet the scenario is even more simple than you imagine. The representative is simply going to login as you and perform all the same actions you would if you had logged in. Better to simply do it yourself.



  • @DOA said:

    On a side note I'm not an American so this 401k thing is a bit of a mystery to me. Do you get one of those per employer?
    Possibly. You have to sign up and contribute. Most employers match some part of your contribution, so it's usually a good idea to get one.

     @DOA said:

    If so could you have like a dozen by the time you retire?
    Yes, but you can also combine 401k's from previous employers into your present 401k or an IRA (individual retirement account).

     @DOA said:

    Also
    from what I understand that money is earning interest rate from
    investments? If so can you lose it if your investements fail?
    Yes, you can choose how to invest the money. Usually you have an array of stock or bond mutual funds to pick from, and also a money market fund which is similar to simply putting your money in a bank. However, these funds reside at an investment firm, not a bank. And just like any other investment in stocks or bonds, the value can increase or decrease, so you could make or lose money.

     There are 3 main reasons a 401k are usually a good thing to invest in (barring troll predictions about the entire economy deflating like a punctured balloon):

    1.   Your employer matches some of your money. If you don't have a 401k and aren't putting enough in it, you are essentially throwing away free money.

    2.   The money can grow tax-deffered. This means you don't pay taxes on it until you take it out, usually at retirement. Thus it grows faster.

    3.   When you take your money out, you may be in a lower tax bracket, especially if you use the account as originally intended and wait until retirement to withdraw the money.



  • @toshir0 said:

    @Scarlet Manuka said:
    @toshir0 said:
    That's how the stock market is about to fucking collapse.

    When you're done with your time machine, I believe Raymond Chen would like to borrow it.
    I'm too dense for this clever joke... maybe a meme that I don't know of ?

    I don't know how the economy fits in, but whenever someone on Raymond Chen's blog complains about a historical artifact of Win32, Raymond points out that if they had a time machine they can go back and fix it, but since they don't and now thousands of applications rely on the behavior, you have to just suck-up and deal with it.

    A recent example was the name of the "WM_TRANSPARENT" (or whatever it's named) property on window controls, which doesn't do what the word "transparent" implies.

    A W3C example would be their misspelling of "referrer". We all know it's wrong, but complaining doesn't help because now there are millions of websites that rely on it... it can only be fixed via time machine. Except that's an order of magnitude dumber than anything Microsoft ever did.



  • @whiznat said:

    Your employer matches some of your money. If you don't have a 401k and aren't putting enough in it, you are essentially throwing away free money.
    It's not 'free money,' it's essentially part of your salary.

    @whiznat said:
    The money can grow tax-deffered. This means you don't pay taxes on it until you take it out, usually at retirement. Thus it grows faster.
    Pointless looking at the rate of growth, unless you can get some of that growth tax-free or it's taxed at different (favourable) rates at different points in time.



    Example - you earn ¤100 which is taxed at 20% at the point of actually receiving the money in your hand.



    Scenario one - you invest the post-tax income in some non-pension instrument or other and it grows by 7% per annum for 10 years:

    ¤100 * (100%-20%) * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% = final amount



    Scenario two - you invest the pre-tax income in some 401/pension fund and it too grows by 7% per annum for 10 years; you are then taxed on the 'pension':

    ¤100 * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% * 7% * (100%-20%) = final amount



    There's no difference whatsoever.


    Unless that 20% figure changes as, for example in your point 3, or as in the UK you can take 25% of that final figure tax free, your misleading yourself that you're getting more because 'it grows faster' - it may do, but you're taxed on the increased amount such that it doesn't matter when it was taxed.



    There are other scenarios that favour pensions, but the simple, single, supposition that "it grows faster in a pension due to tax deferment" is generally wrong.



  • @blakeyrat said:

    Except that's an order of magnitude dumber than anything Microsoft ever did.
     

    I beg to differ.




  • @PJH said:

    Scenarios

    That is very much unlike how [url=http://en.wikipedia.org/wiki/Compound_interest]compound interest[/url] works.

    But don't turn this derailment the thread into math, you know how blakeyrat hates math.



  • @PJH said:

    It's not 'free money,' it's essentially part of your salary.
      You're quibbling. Take out the word "free" if you like. The point stands: If you don't have a 401k and aren't putting enough in it, you are essentially throwing away money.


    @PJH said:

    There are other scenarios that favour pensions, but the simple, single, supposition that "it grows faster in a pension due to tax deferment" is generally wrong.
    Any one can google "tax-deferred growth" and find many, many examples of how this works. As another poster pointed out, it works similarly to compound interest. I'm sorry, but although you may believe they're snakes, 10's of 1000's financial advisors all disagree with you. That should be an indication that perhaps it's you that's wrong.



  • @whiznat said:

    Any one can google "tax-deferred growth" and find many, many examples of how this works. As another poster pointed out, it works similarly to compound interest. I'm sorry, but although you may believe they're snakes, 10's of 1000's financial advisors all disagree with you
    If you can point out where, in my example above with the 20% at either end, how you can come up with different answers to the two scenarios without changing any of the numbers then I'll agree with you.@whiznat said:
    That should be an indication that perhaps it's you that's wrong.
    I think it's more of a case of what they're describing is changing those 20%s. Or 'everyone on the internet is a financial advisor.'



    3rd link (here) from your suggested search term is http://retireplan.about.com/od/401kplans/a/401kintro.htm
    How 401(k) Plans Offer Tax-Deferred Growth



    Since the money in your 401(k) plan grows tax-deferred, you do not pay taxes on the earnings in the account. In fact, you do not even report the income to the IRS. It is not until you take your money out of the 401(k) plan, ideally during retirement, that you owe taxes.
    If the taxes in retirement are the same as when employed, the end amount of money in your pocket doesn't change. Which part of my calculation above is wrong according to your squillions of financial advisors?



  • @PJH said:

    @whiznat said:
    Any one can google "tax-deferred growth" and find many, many examples of how this works. As another poster pointed out, it works similarly to compound interest. I'm sorry, but although you may believe they're snakes, 10's of 1000's financial advisors all disagree with you

    If you can point out where, in my example above with the 20% at either end, how you can come up with different answers to the two scenarios without changing any of the numbers then I'll agree with you

    There are several issues. First, you are able to contribute more into the fund, and have the same amount in your pocket now. You also do not pay taxes on the earnings in the fund when it does things like make distributions. The net of both of these things means that you have more money invested earlier, which allows it to compound more than if you did not. So your example of 7% growth isn't considering the taxes that you pay each year in a non-tax deferred plan.

    And since you only pay taxes on what you withdraw, when you withdraw it, the amount of tax you pay is very likely to be different from what you'd have paid when you originally earned the money. The taxes on distributions complicates the matter, of course, but I'd rather have that money invested in my name than long gone via the tax man. I won't argue if others would prefer to impoverish themselves, however.



  • @boomzilla said:

    First, you are able to contribute more into the fund, and have the same amount in your pocket now.
    Sorry - that one flew by me - got an example I can look at?
    @boomzilla said:
    You also do not pay taxes on the earnings in the fund when it does things like make distributions.
    Ah - forgot about that; over here we have non-pension funds that are tax free on gains/dividends as well (though as you'd expect, there are contribution limits,) and thought there might be something similar in the states. (Canada has them for example.)



    So, sorry - one of my (unstated) assumptions was there was somewhere you could put (a limited amount of) money that was tax free on gains that wasn't a 401K.



  • @PJH said:

    @boomzilla said:
    First, you are able to contribute more into the fund, and have the same amount in your pocket now.

    Sorry - that one flew by me - got an example I can look at?

    Suppose you get paid $100, and put $15 into the fund, and are taxed at 20%. If you put money into a 401(k), you put $15 into the fund, and pay $13 in taxes, leaving you with $68. If you put after tax income into a mutual fund, you pay $20 in taxes, then $15 into the fund, leaving you with $65.

    @PJH said:

    So, sorry - one of my (unstated) assumptions was there was somewhere you could put (a limited amount of) money that was tax free on gains that wasn't a 401K.

    Uh, OK. Assuming you were talking about an IRA or something where you could put away pre-tax money. But due to the example above, assuming you're willing to sacrifice the same amount of post-tax money, the pre-tax fund will grow faster since you're able to put more money in, assuming equivalent rates of return.



  • @PJH said:

    So, sorry - one of my (unstated) assumptions was there was somewhere you could put (a limited amount of) money that was tax free on gains that wasn't a 401K.
    I was comparing tax deferred growth to non-deferred growth. You are comparing tax-deferred growth to tax-deferred growth. Yes, that's how it works. When you compare something to itself, you show no difference. When you compare unlike things, you usually see a difference.

    @PJH said:

    Which part of my calculation above is wrong according to your squillions of financial advisors?
    The reason I didn't supply links is that the web is full of examples. If
    I were arguing with a flat-earther, I wouldn't feel compelled to
    produce evidence of a near-spherical earth. Such evidence is
    everywhere.

    But since you insist upon numbers: Let's suppose on the first year of your 401k you receive contributions of $10,000. For clarity we will look at the results after only 2 years with no further contributions.

    Let's look at tax-deferred growth first. If you receive 7% interest, then after 2 years, you have 10000 * (1.07)^2 =  11449. 

    Then if you pay 20% tax on your gains, that would be (0.2)(1449) = 289.80.

    Thus your final return = 11449 - 289.80 = 11159.20

    If  instead you choose non-deferred growth, then you pay tax on the gain each year. Thus your effective interest rate each year = 7(1 - 0.2) = 5.6%, making the multiplier 1.056.

    Thus your final return = 10000 * (1.056)^2 =  11151.36

    Since 11159.20 > 11151.36 QED. Now imagine accumulating this difference for larger amounts over many years.

    @PJH said:

    everyone on the internet is a financial advisor
    If you don't see the irony, that's ok. Everyone else does.



  • @whiznat said:

     If I were arguing with a flat-earther, I wouldn't feel compelled to produce evidence of a near-spherical earth.

    Lies!, Lies I tell you!  The earth is flat, you can see that with your own two eyes



  • @blakeyrat said:

    @toshir0 said:
    @Scarlet Manuka said:
    @toshir0 said:
    That's how the stock market is about to fucking collapse.
    When you're done with your time machine, I believe Raymond Chen would like to borrow it.
    I'm too dense for this clever joke... maybe a meme that I don't know of ?
    I don't know how the economy fits in, but whenever someone on Raymond Chen's blog complains about a historical artifact of Win32, Raymond points out that if they had a time machine they can go back and fix it, but since they don't and now thousands of applications rely on the behavior, you have to just suck-up and deal with it. {examples snipped}

    The missing piece being of course that toshir0 knows what will happen to the stock market in the future, presumably through owning a time machine.



  • @Scarlet Manuka said:

    The missing piece being of course that toshir0 knows what will happen to the stock market in the future, presumably through owning a time machine.
     

    And he'll buy that time machine based on how well his stocks do.



  • @Lorne Kates said:

    And he'll buy that time machine based on how well his stocks do.

    So, after a few times through the loop, he should be able to afford a really kick-ass time machine?


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