The most rediculas thing from economic Advisors on TV

[inchworm]

Another 401K scheme is that all your contributions, not to mention the company matches, are lost if you leave employment within a certain amount of time. Happened to SIL and I thought she was pretty savvy.

Uhh - don't think so -- you're contributions are always yours unless you fail to roll them over when you leave and then Uncle Sam helps himself....

The company's contribution can be linked to a vesting schedule.

 

[Big Daddy]

A little known game companies play, and with your signed consent, is the 401K game.
I know too many who faithfully contributed their maximum %, only to lose the company match if the company closes within, say, the 5 year minimum for contributions, if that is what the agreement states. They end up with only the amount of their contribution and no interest on the money, either. Happened at DH's company. They could have invested same funds in a mutual fund of their own choosing and done better.

Another 401K scheme is that all your contributions, not to mention the company matches, are lost if you leave employment within a certain amount of time. Happened to SIL and I thought she was pretty savvy.

Read your 401K material closely, ask for clarification if you suspect the language is deliberately confusing you. Watch what you sign.

OK, Susie Orman, how do ya plan for that? That sets you years behind and with no wiggle room if you are nearing retirement with the volatile job market that exists now.

Some plans have a vestment requirement. The company I worked for before was 20% per year for company matches. At my current company you are fully vested immediately. All funds are managed by a trust and can't be embezzled or sold off as assets if the company dies. Of course I'm sure there are ways around everything.

 

[sylvie]

I guess my question is, what are the options? Just dont' save? Keep your money under a mattress? Forego the 401K match in just in case the company goes under? You will still have your own contributions in any event.

No, in some instances you don't get your contributions- they are forfeited if you quit employment.
I am saying that to simply mindlessly sign onto a 401K company matched plan because a tv personality and employers advocate it is foolish. We need to cover our butts, be proactive and understand what we are signing when it comes to these plans, like any other contract.

 

[hikerchick]

I guess my question is, what are the options? Just dont' save? Keep your money under a mattress? Forego the 401K match in just in case the company goes under? You will still have your own contributions in any event.

No, in some instances you don't get your contributions- they are forfeited if you quit employment.
I am saying that to simply mindlessly sign onto a 401K company matched plan because a tv personality and employers advocate it is foolish. We need to cover our butts, be proactive and understand what we are signing when it comes to these plans, like any other contract.

They can't take your contributions if you quit employment. That is your money and they can't take it away from you. You can always roll it to another plan.

TV personality? I have no idea what you are talking about.

To fail to even attempt to prepare for the future because something bad might happen is foolish.

 

[sylvie]

I guess my question is, what are the options? Just dont' save? Keep your money under a mattress? Forego the 401K match in just in case the company goes under? You will still have your own contributions in any event.

No, in some instances you don't get your contributions- they are forfeited if you quit employment.
I am saying that to simply mindlessly sign onto a 401K company matched plan because a tv personality and employers advocate it is foolish. We need to cover our butts, be proactive and understand what we are signing when it comes to these plans, like any other contract.

They can't take your contributions if you quit employment. That is your money and they can't take it away from you. You can always roll it to another plan.

TV personality? I have no idea what you are talking about.

To fail to even attempt to prepare for the future because something bad might happen is foolish.

The original post referenced tv personalities. I was attempting to stay on topic in this thread.

I think I have been clear on contract content, I won't make any more comments on it.
I never ever ever never said not to prepare for the future and never ever said not to invest in a 401K plan. I said to read before signing. That's it. I gave personal examples where my family learned the hard way and thought it would be beneficial to pass the hard learned lessons here. Apparently not.

 

[hwillm1977]

And you have such good free healthcare.

Free health care is wonderful... I can't imagine what my parents would have done if they had to PAY for dad's by-pass surgery... as it was the surgery and 20 weeks of re-hab and physiotherapy cost him a grand total of $0.

At least as Canadians we don't have to have back up plans for major illnesses, pregnancy, accidents, etc.... the healthcare is taken care of...

 

[Big Daddy]

I think I have been clear on contract content, I won't make any more comments on it.
I never ever ever never said not to prepare for the future and never ever said not to invest in a 401K plan. I said to read before signing. That's it. I gave personal examples where my family learned the hard way and thought it would be beneficial to pass the hard learned lessons here. Apparently not.

It is always good to pass along info about fraud and misconception. Over the past couple years people should have learned a lot about reading contracts. I hope my 401k is as up and up as it seems. Look at all those people that invested with Bernie. It's real scary out there. The media is full of lies. Older people are constantly being bilked out of their money. You can't trust anybody.

 

[Big Daddy]

And you have such good free healthcare.

Free health care is wonderful... I can't imagine what my parents would have done if they had to PAY for dad's by-pass surgery... as it was the surgery and 20 weeks of re-hab and physiotherapy cost him a grand total of $0.

At least as Canadians we don't have to have back up plans for major illnesses, pregnancy, accidents, etc.... the healthcare is taken care of...

We'll have it here someday. We just can't afford to keep paying the profits to the middle man anymore. However there is a very strong disinformation campaign against it. The people of the US are very resistant to change. Usually only happens over a couple generations. So we have to be happy with baby steps. Cost a lot more this way but eventually we will have health care as a right vs a luxury.

 

[FarmerChick]

good post BD
we will have to have healthcare available to the mass of citizens. there is no other option....the plan and how hard the fight to get it operational will be interesting. I don't know why so many fight against something that must happen? I know it is how it will happen, the way the plan gets into effect, but to want to stop progress is so sad.

 

[FarmerChick]

anyone who has a 401 K match option etc. at work is crazy not to take advantage of it. free money contributions.

Tony's 401K has been a miracle in this past year....we made alot of money over this year cause he played his stock options etc. very well. We sure didn't lose, we made money to the max!!!

but yes, you should be careful what fund that money is sitting in cause stock and agressive funds took nose dives.

You should save money cause it is hard times. You should batten down the finances to include savings, regardless of that income. I did. I save and have cut costs everywhere else.....not saying everyone can do this, but most can at some point in their life. Savings is key to emergencies etc.