Retirement Plan Unpredictability is a Major Wealth Killer

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I have written at length about my research into the wealth-killing traps of 401(k)s, IRAs, 403(b)s, and Roth plans… and how to avoid them.

In this post, I’m going to talk about the trap of retirement plan unpredictability, and I’ll start by asking you a critical question:

Do you know what the value of your retirement account(s) will be on the day you plan to tap into them… and in 20 or 30 years?

If your answer to that question is “no,” then you don’t have a plan – you’re gambling.

Yet isn’t the money you’ve earmarked for retirement money you can’t afford to lose? On top of all of life’s stresses, do you really want to have to worry about when the next market crash could wipe out 50% or more of your life’s savings – as has happened twice just since the year 2000?

Market Volatility Has Proven to be a Cause of Health Problems and Even Early Death

[Read more…] “Retirement Plan Unpredictability is a Major Wealth Killer”

Coronavirus Pandemic Exposes Cracks in 401(k) Plans

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I’ve written extensively about why more and more experts are warning that the 401(k) is an experiment that’s failed, and why the man considered to be the “father” of the 401(k) says it’s a monster that should be destroyed.

But the pandemic, shutdown and resulting economic downturn have exposed dangerous cracks in the 401(k) system. I’ll explain three of them here and show you how to protect yourself…

New 401(k) Problem #1: Companies are Suspending Matching Contributions

Tens of millions of workers have already been affected, and more companies have announced their plans to suspend the 401(k) match.

That’s a real blow for employees who’ve come to think of the match as “free money” and assumed it’s a perk that won’t be yanked with little warning.

But the reality is that the employer match isn’t really “free money” at all. According to a study by the Center for Retirement Research, for every dollar an employer contributes to your 401(k) match, they pay 90 cents less in salary to men and 99 cents less to women!

Translation: For every matching dollar you’re given, you really only receive 10 cents or less in total compensation. [Read more…] “Coronavirus Pandemic Exposes Cracks in 401(k) Plans”

How to Avoid the Pitfalls of 401(k)s and IRAs: Pamela Yellen’s Interview on Beyond 50 Radio

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I was just interviewed on Beyond 50 Radio about the wealth-killing traps of 401(k)s and IRAs and how to avoid them.

When you listen to the replay of this interview by clicking on the play arrow below, you’ll discover:

  • How the pandemic has exposed the shortcomings of traditional retirement accounts
  • Why the 401(k) employer match isn’t really “free money” at all
  • Why you should never let your employer choose where to invest your 401(k) contribution – most employers now automatically invest your money, and almost no one questions it!
  • Why you’re likely to retire in the highest tax brackets of your life – and how to legally slash your tax bill
  • How the fees hidden in 401(k)s can devour 40% or more of your hard-earned money
  • The critical difference between saving and investing for retirement
  • Why you need an emergency fund equal to two years of your household expenses
  • How to have quick and easy access to the money you need to weather the challenges life unexpectedly throws at you – and how you can get the exact same growth on that money as though you never touched it
  • The real reason many financial representatives will steer you away from the Bank On Yourself strategy
  • What the Bank On Yourself strategy is in a nutshell

You can listen to the interview by pressing the play arrow below…

[Read more…] “How to Avoid the Pitfalls of 401(k)s and IRAs: Pamela Yellen’s Interview on Beyond 50 Radio”

Pros, Cons and Why the SECURE Act WON’T Make Your Retirement More Secure

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The SECURE Act of 2019 is supposed to help more Americans save for retirement. The new legislation will have an impact on retirement plans – and not all of them are good.

In December of 2019, Congress passed H.R.1994 – the SECURE Act of 2019 – which contains the most sweeping changes to government-controlled retirement accounts – such as 401(k)s, 403(b)s, and IRAs – in more than a decade.

The SECURE legislation – which stands for “Setting Every Community Up for Retirement Enhancement” – put into place several provisions supposedly intended to strengthen retirement security.

Not surprisingly, the financial services industry spent many millions of dollars lobbying Congress to ensure passage.

So is the new legislation in your best interests? Is the SECURE Act really likely to increase your retirement security?

[Read more…] “Pros, Cons and Why the SECURE Act WON’T Make Your Retirement More Secure”