It is easy to forget that 401(k) plans have only been around for three decades. We have learned a lot in that period, and the jury is now in: The 401(k) experiment has failed. This system does a better job of enriching the financial sector than in providing retirement security to Americans.
401(k) plan investments are a primary driver of the investment markets. They are also the reason that many people are pacing the floors at night, worrying if their retirement will get delayed or destroyed.
When a Wall Street broker is asking you "What is your risk tolerance," you should replace "risk" with "loss;" he is asking you: "How much money are you willing to lose?" These days you'd have more fun going to Vegas.
The majority of taxpayers file their federal income tax on a calendar year basis, which means that the opportunity for tax planning ends on December 31. After this date it is too late to make any decisions that could possibly reduce your taxes.
Full disclosure of 401(k) fees, while a step in the right direction, will do little to remedy a system that practically insures most Americans will retire, if at all, with a sharply diminished quality of life.
You'd think the stock market's 25% drop from its 2007 peak, not to mention the suspension of matching contributions at scores of 401(k) sponsors, was apocalyptic enough to keep the conspiracy theorists busy. But apparently not.
This could be your first opportunity to trust your life savings to a company that is fighting an SEC fraud lawsuit, that has little experience in the 401(k) market and that has no demonstrable skill in investing other people's money.