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dgrich
Can't spend your way out of debt.
08:14 AM on 09/04/2013
This is not a problem the government is going to be able to fix. One way and another, Social Security will do less for people in coming years, not more. We are all going to be more dependent upon our own resources if we want to have anything that resembles what we have come to think of as a secure and comfortable retirement.
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htimsr40
Read Me, Doctor Memory??
08:07 AM on 09/04/2013
People with enough disposable income that they can afford to save are given special tax treatment. The poor and middle class who need to eat, pay the doctor and rent this month don't benefit much.

Just another example of how the tax system REALLY favors the wealthy, despite conservative bleating to the contrary.
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pammiethekid
10:56 AM on 09/04/2013
What you say is true particularly for the younger generation, who are not privy to the labor advantages some of us baby boomers inherited—like pension plans made it really easy to save. Employers would match anything you put in up to a certain amount, and your contribution was taken out of your paycheck before you ever saw it. You could start to get ahead. Then the anti-labor/get-rich-quick eighties came along and by 1989, many employers did not offer these plans. You had a big split right there, some people made their own pension plans, IRAs, 401ks. If they were diversified; ie had a good advisor, they did okay. Others took that money and put it in real estate or one of the wild pyramid schemes that marked the 80's. Others just blew it. Now we see many people our age (baby boomers) who have lived high on the hog and have nothing set aside. Of course not all baby boomers are the same, but I'm talking blue collar as much as white collar, electricians and secretaries as much as engineers. When I was 30, our cost of living was much less and putting money away was made easy. I don't think it's nearly the same for people who are in their 30s now.
01:50 PM on 09/04/2013
"Employers would match anything you put in up to a certain amount, and your contribution was taken out of your paycheck before you ever saw it."

So... EXACTLY like a 401(k) plan with a matching or profit sharing provision, which describes the vast majority of 401(k) plans. Good work.
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Americangangster
Dual masters in dominance and modesty
11:38 AM on 09/04/2013
Makes no sense to take money from others and give it to the needy, though. It's not yours, and you aren't entitled to it.
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woopid
Have some fun everyday!
07:58 AM on 09/04/2013
There are always going to be the "haves" and "have nots". At least America gives people the opportunity to succeed. Instead of bashing the successful people, these think tanks should find ways to motivate the less fortunate. However it seems that encouraging personal responsibility is not on the Left's agenda.
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Rikker59
USAF (ret) 29 Yrs
09:11 AM on 09/04/2013
The U.S. has close to the worst (if not the worst) income inequality and lack of social mobility among the industrialized nations (and even some third-world). For the past 32 years Congress has been stacking the deck in favor of the owner class and to the detriment of the 99% until the middle class of the past is gone. Anyone who thinks the U.S. is the land of opportunity more than other countries has fallen for the American exceptionalism propaganda. At best we're in the bottom half of the pack on a myriad of measurements.
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El Chingaso
Reality-based infusion.
10:12 AM on 09/04/2013
"Discouraging personal responsibility" (and accountability)...is one of the left's primary industries. Promoting victimization comes in second...
satyrday
If my micro-bio is way too long, will it be trunca
07:24 AM on 09/04/2013
Yes, my 401k's always underperform against the stock indexes. The company matching is the only reason that I do it.
01:53 PM on 09/04/2013
Sounds like it's time to choose a new investment allocation.
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07:08 AM on 09/04/2013
The major asset of middle class Americans is their home.Alas we know what has happened to the housing market also.I am sure most people planned to cash out their home at some point and get something cheaper to live in.Putting the difference in the retirement kitty.
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07:05 AM on 09/04/2013
Unlike poor Americans, the wealthy are more likely to have the spare income to shovel into 401(k)s, and wealthier Americans are more likely to work for employers that are willing to match those contributions.
To have investments you need the extra income to invest.If you live day to day,paycheck to paycheck,you cant invest.Its a struggle just to live.
The system is rigged to favor CORPs and the wealthy.That is very clear.
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El Chingaso
Reality-based infusion.
10:35 AM on 09/04/2013
Net Worth Accumulation (for starters):

1) Track all of your spending for 30 days. You'll be amazed how you burn cash that could easily be saved.

2) Split-deposit 8% of your gross income from each check into a savings account. (Should've done that when you entered the workforce.)

3) Pay down all debt. (Remember, if you pay finance charges on anything, that money automatically erodes any capital gains you earn from any investment.)

4) Read as many books as you can on saving & investing.

5) Go to seminars and take classes.

6) Join a small investment group that invests in stocks & bonds. (Have to get skin in the game.)

7) Learn what "fractional reserve banking" is and how money is magically created, with automatic interest owed.

8) And hope each day the Federal Reserve and its foreign & domestic bankster buddies don't crater the U.S. economy into another depression. (Unfortunately, the signs are there already.)
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11:10 AM on 09/04/2013
Thanks for the advice,which I dont need. It was just a general comment.
Stocks?
No thanks.Its a rigged game of course.
Savings?
Yes,get rid of debt.
Real Estate is the game and always has been.Just dont buy in an up MKT.Just sell.
A good deal is a Good deal,but you have to know your market.
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HellBank
Curve: The loveliest distance between two points.
06:56 AM on 09/04/2013
Retire? I'm still waiting for companies to pay enough to be able to live whilst we work.
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PeterNPaul
I know you have missed me.
06:23 AM on 09/04/2013
Another product of a failed tax system. We are always dealing with the effects, not the cause.
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dgrich
Can't spend your way out of debt.
08:19 AM on 09/04/2013
Over the past few years, the Federal Reserve has moved from simple interest rate manipulation to wholesale market interference with the goal of maintaining bank solvency and equity prices. This steamroller-style interference in the markets has had massive consequences. And not just for the Baby Boomers who are now hitting retirement age, but also for their children and children's children—three American generations whose retirement hopes have been left to swing in the wind on a string of broken promises.
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kobrock1
Clever only seems easy
06:19 AM on 09/04/2013
HP's helping the government lay the groundwork for coming after your IRA.
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El Chingaso
Reality-based infusion.
10:54 AM on 09/04/2013
IRA seizure is coming. Banksters and their political hacks in D.C. are hammering out the details.

Last I read, the plan is to capture all IRAs in the U.S. and pool them together into some sort of "federal annuity" plan.
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martman1
retired business owner
06:14 AM on 09/04/2013
Advice from a former stockbroker:

Put your money in a broad index fund that does not trade often and has low fees. I'd recommend the Vanguard Group of funds. No "managed" fund (except maybe Buffet's funds) have ever out performed the market averages over a long period of time and they charge much more in fees.

The typical managed fund might charge 1.5% a year versus an index fund charging .5%. That 1% difference adds up over time. For example, $10,000 growing at 7.2% compounded for 40 years would grow to $160,000 but growing at 6.2% because of 1% annual higher fees would grow to only $115,600.............not to mention that managed funds have under performed the market averages even before fees.
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07:52 AM on 09/04/2013
It's astounding how inaccurate your comments are.

Grossly, factually inaccurate.
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martman1
retired business owner
08:29 AM on 09/04/2013
How?
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El Chingaso
Reality-based infusion.
11:03 AM on 09/04/2013
Uh, Gerald, explain your objection in quantitative detail. (Financial computations, especially FV, PV and "Rule of 72," are good places to start.)

Arguing that financials are "inaccurate" without providing any numerical evidence to the contrary...is valueless (like many 401(k) plans). Man-up with Excel, bro...

(A lot of Americans, Gerald, relish "qualitative" worlds, but they are completely lost when it comes to successfully navigating "quantitative" environs.)
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metogamekun
non-violence takes guts
06:03 AM on 09/04/2013
Problem #2: Unlike wealthy stockholders that have a large share of stock in a single company, 401K holders have little to no say in what a company does, if they even know what individual companies they have stock in.

Problem #3: 401Ks dump wealth into a corrupt culture (Wall Street) with limited accountability and a "winner takes all (of your money) attitude."
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Stewart Goss
Collectivism leads to mass poverty
11:23 AM on 09/04/2013
No stock market = no investors = U.S.A. goes back in time economically to become a third world nation.
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metogamekun
non-violence takes guts
01:54 PM on 09/04/2013
There's room for improvement...lots of room.
05:52 AM on 09/04/2013
Win or lose you at least have to have a plan. Saving for retirement starts day one not at 55 years old. It's no different if you have kids and decide to start a college fund when they are in their junior year of high school.

A 5 dollar cup of coffee ever day, 6-8 dollars for lunch every day, a cab ride instead of walking, public transportation instead of the second car. The list of where your money goes needs to be looked at.
06:29 AM on 09/04/2013
You are right, but low earners can't save on any of those, because they can't afford them in the first place.
08:43 AM on 09/04/2013
My First "real" job in my 20s paid my 23k a year. I put away a measley 2% no mtching. You can do it if you really want to.
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El Chingaso
Reality-based infusion.
11:10 AM on 09/04/2013
How do they know they can't afford them? Could it be...they simply don't have any money management skills?

I work with guys who make respectable annual incomes (low-to-mid six figures), but many of them are broke a day or two before payday.

I don't buy the "low-wage/can't-ever-save-anything" cr*p. Sometimes, you start with $5 per month. A kid could do that.

Unfortunately, many low income wage earners have unresolved personal issues that negatively affect their respective finances.
07:28 AM on 09/04/2013
You're forgetting the people who's every paycheck goes to groceries, rent, etc. and they still don't have enough to pay their bills. Those people have no money to put away into a savings account and they are the ones who rely solely on SS at retirement.

Most of the $5 cup of coffee people I know have 401's and other investments.

What the people who live on welfare do when it comes to retirement, I have no idea but I suppose the Gov continues to send them checks.
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joelj
actions have consequences. Be responsible!
05:45 AM on 09/04/2013
It seems to me that those who worked hard to get an education and therefore had good jobs and who lived well within their means and always put money away for their retirement should not be viewed as the villians simply because they will enjoy a better income during their retirement years than those who did not.
demsrsilly
Proud supporter of workplace freedom.
07:47 AM on 09/04/2013
NO! That is the WORST sort of person! Why should someone get any benefits and rewards from hard work!!!!
Ask any HP liberal! He/she will tell you. Such a person that you described should NOT reap any such benefits of hard work. This person should be burdened with crippling taxes so that he/she is equally poor as others.
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jstanavgguy
Proud member of the evil 1%
08:38 AM on 09/04/2013
That is what my wife and i did.

We lived well within our means, saving more than we spent for 20+ years.

We have no debt.

And we could retire tomorrow, and enjoy a better lifestyle than we lived with up until now.

hard work pays off.

The Ant and the Grasshopper is more than a story for kids.
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joelj
actions have consequences. Be responsible!
09:15 AM on 09/04/2013
I agree.  I am 59 and debt free.  I still work 1/2 time as a physician only because I enjoy doing it. And this required that I live basically as a pauper and spend nearly all of my waking hours working toward my goal intill I entered practice at age 30.  And even then, I never lived extravagantly and had the wisdom to save for my retirement. 
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Josh Steinhauer
Ex-Patriot, Europe
05:12 AM on 09/04/2013
Since everyone seems to believe Social Security is your retirement account then let's make it your retirement account.

Increase the Social Security payment option to $3K per retiring per month. People in retirement can live off of $36K a year which is double what SS pays right now.

To make this work, we need to increase the SS tax and contribution. So move it to 25%. Employer pays 15% and Employee pays 10%. This funds the increases the solvency issue of SS and increases the payouts to make it a real retirement account.
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Johnson345Texan
Life is nothing but entertainment for the living!
08:31 AM on 09/04/2013
That wouldn't work for poor Americans as they barley can afford the taxes know dude thought if you raised minumm wage a bit then I could see something like that happening...
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hogman
Some people without brains do a lot of talking.
04:05 AM on 09/04/2013
A 401(k) plan is a trap. When one retires, he/she will pay around 40% in taxes.
401(k) plans are taxed as ordinary income. The employee has little control.
Look up IRC 7702-A (IRC stands for Internal Revenue Code.)
Cash value life insurance in the form of an IRC 7702-A is distributed tax free (the life benefit.) The death benefit (it is a life insurance product) is inherited by the beneficiaries 100% tax free. The money grows without a possibility of loss (unlike the 40% plunge in the S&P500 2007/2008 that turned 401(k) plans into 201(k) plans, or to put it another way, 401(k) plans became 40lose(k) plans.) Most floors for IRC 7702-A is 0 to 1% but it captures S&P 500 gains up to 12-15%. Can't lose.
Roth IRA's (tax free) have restrictions, 10% penalty if withdrawn before age 59 1/2, forced distribution at age 70 1/2, $5,000 year max contribution ($6000 if over age 50.) IRC 7702-A has a far higher contribution limit, no penalties, interest free loans using the cash value as collateral (doesn't have to be paid back), the money can be used for long-term care, college education, down payment on a house, medical expenses, whatever, it's universal.
Look into it.
08:45 AM on 09/04/2013
Pending on income in retirement, taxes will be no where near 40%. But in any case, that's why you need to have a ROTH. Sometimes it's better to pay taxes now than later.
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hogman
Some people without brains do a lot of talking.
12:07 PM on 09/04/2013
I probably should have mentioned that the states vary in income taxes by a wide margin.  I live in California, run by the kleptocrats.  We can surmise that taxes will rise, 40% might be a best case scenario.
The tax-free cash value life insurance approach makes far more sense than the limited capabilities of a Roth IRA.