Two New 401k Revelations

If you’ve been a subscriber for a while or you’ve read my new best-selling book, The Bank On Yourself Revolution, it’s no secret that at the end of the day, I’m not a big fan of the 401(k).

Or the IRA, 403(b), or any other government “blessed” and controlled retirement account. There are many reasons for that. This recent blog post I wrote reveals one big problem – mutual fund fees, which are likely devouring far more of your savings than you realize.

Broken 401k nest egg

But in the last couple of weeks, there have been new studies revealing just how devastating to your financial health a 401(k) can be:

Broken 401k nest egg

Recent 401(k) Wealth-Killing Revelation #1: 

A new academic study by two Yale and University of Virginia professors argues that millions of workers have been ripped off by excessive fees charged by plan sponsors and advisors to these plans.

The study concluded that…

[Read more…] “Two New 401k Revelations”

The good, bad and the ugly of the new myRA

You’ve probably been hearing about the new “myRA,” a new government-run retirement account that President Obama unveiled at his State of the Union address and plans to create with a stroke of his pen.

Obama State of the Union Address

Its primary purpose is to offer a savings option to the 50% or so of U.S. workers who have no access to employer-sponsored retirement plans and have little saved for retirement.

Obama State of the Union Address

The appeal is that it “guarantees a decent return with no risk of losing what you put in,” according to Obama.

Sounds okay so far, right?

I did some digging into the details to understand more about how this program will actually work… and to help you sort through the pros and cons of programs like this.

Below I’ve listed the good, the bad, and the ugly about this new program. But really, most of the bad and the ugly points apply to all government-run retirement accounts, including 401(k)’s, 403(b)’s, IRA’s, etc. So if you have one of these plans, I urge you to read this today.

The good…

[Read more…] “The good, bad and the ugly of the new myRA”

Are you putting your retirement savings in prison?

Ted Benna, "Father of the 401(k)"

Ted Benna is known as the “Father of the 401(k).” In the late ‘70’s, he worked as a consultant to business owners whose main agenda was “How can I get the biggest tax break, and give the least to my employees, legally?”

Ted Benna, "Father of the 401(k)"

Tax nerd that he was, Benna discovered an obscure part of the tax code – section 401(k). Voila! By 2012, nearly 75% of all company pension plans had disappeared!

What does Mr. Benna say about his beautiful 401(k) baby today?

If I were starting over from scratch today with what we know, I’d blow up the existing structure and start over!”1

Uh oh.

Per the US Senate Committee on Health, Education, Labor, & Pensions: “After a lifetime of hard work, many seniors will find themselves forced to choose between putting food on the table and buying their medication.” The U.S. Census Bureau says the average value of 401(k) accounts of pre-retirees between 55 and 64 is only $170,645; the average value of their IRAs is only $147,345. And half of all those close to retirement age have less than $50,000 in these plans.

Something went horribly wrong. Actually, several things went horribly wrong, not only with 401(k)’s but also their kissing cousins: IRA’s, Roth Plans, 403(b)’s, SEP-IRA’s and so on.

And the problems with these government-controlled plans are in these five key areas:
[Read more…] “Are you putting your retirement savings in prison?”

Shouting about Bank On Yourself from the rooftops

Dan Proskauer recently sent me a chart showing how his family’s net worth has grown since he started his first Bank On Yourself plan 3 1/2 years ago, and how that compares to the previous 10 years.

When Dan saw this chart on his financial tracking software program, he said his jaw dropped so hard it left a dent on his keyboard and that “we should be shouting about this from the rooftops.”

They say a picture is worth a thousand words, so take a look for yourself and note how you’ll see a more detailed version of the chart when you place your mouse over it…

Bank On Yourself

Why would Dan be willing to reveal and discuss something as personal as his net worth for the whole world to see? Because, in Dan’s words…

[Read more…] “Shouting about Bank On Yourself from the rooftops”

Best retirement plan alternative?

I can’t afford to be a risk taker any more”

Worried Senior

…says 75-year-old Margie Alford of Austin, Texas.  Yet, Margie’s financial planner is moving her CD money into stocks instead, after fruitlessly waiting for three years for interest rates to rise.

Worried Senior

Low interest rates of the past several years have taken a toll on U.S. savers.  “The Fed has removed the last shred of possibility that interest rates will revert to normal in the near future,” according to Christopher Carroll, profession at Johns Hopkins University.1

As a result, retirees are taking on more risk… at a time they can least afford to.

With interest rates on CD’s, saving and money market accounts not even keeping up with inflation, what other options do you have?

The Bank On Yourself solution…

[Read more…] “Best retirement plan alternative?”

The Ultimate Wealth-Building and Retirement Strategy… Whether the Market Goes Up, Down or Sideways

Have you been disappointed by your 401(k), IRA or other retirement plan?  Conventional wisdom tells us these plans are the best way to save and invest for retirement. Yet following this advice has resulted in financial insecurity for most Americans.

Because of this, most baby boomers have been forced to postpone retirement an average of five years.1

I’m often asked how using the Bank On Yourself method to save for retirement compares to traditional plans, so I put together this short video that reveals seven reasons Bank On Yourself makes an excellent retirement plan alternative.

Click the play button in the video below and see how many of these seven advantages you’d like to have in your financial plan…

n5pumZ8Updg

The Ultimate Wealth-Building and Retirement Strategy… Whether the Market Goes Up, Down or Sideways

Would you like to find out how big your nest-egg could grow – guaranteed – if you added Bank On Yourself to your financial plan? No two plans are alike – yours would be custom-tailored to your unique situation, goals and dreams. To find out what your bottom-line numbers would be, request a FREE, no-obligation Analysis today.
Request Your Analysis Button
If you’re wondering where you’ll find the money to fund your plan, keep in mind the Bank On Yourself Authorized Advisors are masters at helping people restructure their finances to free up money to fund a plan. Here are the eight most common places they look.

When you request your FREE Analysis, you’ll get a referral to one of only 200 advisors who have met the rigorous training and requirements to be a Bank On Yourself Authorized Advisor. They’ll show you why Bank On Yourself is the ultimate wealth-building and retirement strategy… whether the market goes up, down or sideways.

1.  Bankers Life and Casualty Center for a Secure Retirement, May 2011

Test Your Money and Investing IQ

You can win one of six valuable prizes by participating in our “Test Your Money and Investing IQ” blog contest – just enter your answer in the comments box below by midnight Monday, November 14. Bank on Yourself financial questions to answer

At a dinner party recently, I sat next to a retired business owner and we got into a conversation about money and finances.

In response to one of his questions, I mentioned an important principle of finance, at which point he turned to me and said, “I’m a CPA and an MBA and I’ve never heard of that!”

Actually, it’s fairly common that I meet highly educated people who are unaware of some of the really critical basics of how money and finances work.

Funny thing is that I think many of our subscribers know these principles, even if they don’t have alphabet soup after their names.

Applying a little logic and common sense (which is admittedly in short supply in our society today) is usually all that’s needed.

And to prove my point, I’m holding a contest to see how many of our subscribers can answer the questions below correctly.

If you answer even one of these questions correctly and/or insightfully, you can win a prize.

I know that people deepen their understanding more when they participate and articulate their thoughts, so I decided to “ethically bribe” you to take a shot at it by holding a contest.

Here’s all you have to do to enter the contest…

Bank on Yourself Test Your Money and Investment IQ contest winners and their prizes

Just type in your answer to any one or more of the five questions below, no later than Monday, November 14, at midnight.  If you want, you can comment on someone else’s answer to qualify to win.

After the contest ends, our team will pick the best entry (best because it’s correct, insightful, entertaining or a combination of those).  That person will win a $100 Amazon Gift Certificate.  And two runners-up will be chosen to receive their choice of a $25 Dining Gift Certificate, or a personally autographed copy of my best-selling book.

Three more winners will be chosen at random – all entries containing at least one correct answer will be entered into a random drawing for another $100 Amazon Gift Certificate and two prizes of your choice of a $25 Dining Gift Certificate or autographed book.  (Sorry – U.S. residents only.)

Although there are five questions, you don’t have to answer all of them to qualify.

So test your money IQ now by answering as many of these five questions as you want:

number1If you finance a $30,000 car through a finance company, your actual cost for the car is the money you spend on it, plus the interest you pay, less the value of your trade-in at the end of your loan repayment period.

Question:  If you pay cash for a car, what’s your actual cost for the car?

If you have a $20 stock and it goes up by 40%, how much money did you make on that stock?  (Hint:  This is about a key financial principle, not a math question.)

number3 According to Morningstar, Inc., the top-performing mutual fund for the last decade (ending December 31, 2009) enjoyed an 18% annual return.

However, the typical investor in that fund wasn’t so fortunate.

Question:  What was the annual return of the typical investor in that top-performing fund?  And why was their return so different from the return reported by the fund?

TIRED OF WATCHING YOUR FINANCIAL PLAN GO NOWHERE?

Find out how the Bank On Yourself method can give you the financial security and predictability you want and deserve.  It’s NEVER had a losing year in 160 years!  Take the first step right now by requesting a FREE Bank On Yourself Analysis.

Wondering where you’ll find the funds to start a plan?  Don’t worry!  You’ll receive a referral to one of only 200 advisors in the country who have met the rigorous requirements to be a Bank On Yourself Authorized Advisor and can show you where to find money you didn’t know you had to fund your plan.

number4 What percentage of mutual funds, financial advisors and investment advisory services underperform the overall market?  And why?

number5 You could have $10,000 in a mutual fund that reports an average annual return of 25% for four years… and at the end of the fourth year end up with only the $10,000 you started with.

How is that possible?

So there you have it – just answer one or more of these questions, or comment on someone else’s answer, no later than midnight, Monday, November 14, to get in the running to win one of the six prizes!

Comments

We’ll announce all the winners in a blog post later this month.

So scroll down to the comments box below and start typing!  (Note – all comments are moderated, so there will be some delay before your comment appears.)

Compare your Fear Factors choices to the rest of America

Financial Pumpkin With more than 500 responses in so far to The Bank On Yourself Fear Factors Challenge, you may be interested in knowing how your choices compare to the rest of America.

Here is how the responses to each of our 10 survey questions have broken down.  The percentages reveal which option our survey-takers find more scary!

You’ll see that snakes, blood, public nudity, eating fire-hot peppers, and even close proximity to a psychotic killer caused far fewer trembles than did the terrifying prospect of winding up in a serious financial jam.

Here’s what Americans find most scary…

1. Which of the following is more frightful to you?

  • 22.2% – Death
  • 78% – Outliving Your Money

Question 1

2. Which of the following is more frightful to you?

  • 28.6% – Having all of your investment decisions — good and bad — published in your local newspaper
  • 71.4% – Walking naked down a fashion runway while being photographed

Question 2

3. Which of the following is more frightful to you?

  • 17.5% – Having to remain awake for 48 uninterrupted hours
  • 82.5% – Having to memorize all the fine print on your 401(k) plan in no more than 48 hours

Question 3

4. Which of the following is more frightful to you?

  • 64.3% – Watching your stock portfolio lose 40% of its value in only a few weeks
  • 36.4% – Ingesting 40 habanero peppers within 24 hours

Question 4

The ultimate financial security blanket

Did you know that the Bank On Yourself wealth-building method has NEVER had a losing year? Used by Walt Disney and J.C. Penney, it has stood the test of time for more than 160 years.

To find out how you can grow your nest-egg safely and predictably, even when stocks real estate and other investments tumble… and how much money you could have – GUARANTEED – on the day you plan to retire, request your FREE no-obligation Analysis and Recommendations now.

5. Which of the following is more frightful to you?

  • 58.8% – Sitting for 30 minutes in a tub of live snakes
  • 41.7% – Explaining to your family or other loved ones that you’ve lost your home to foreclosure

Question 5

6. Which of the following is more frightful to you?

  • 49.2% – Having to pick the one mutual fund (among hundreds) that will outperform all others during the year
  • 52.1% – Bobbing for a 10 oz gold bar in a vat containing 50 gallons of cow’s blood

Question 6

7. Which of the following is more frightful to you?

  • 9.4% – Going on twelve once-a-month blind dates with a randomly selected bachelor or bachelorette
  • 91% – Entrusting your retirement portfolio to an anonymous fund administrator, who may or may not have any special education or training

Question 7

Editors Note: Although 9 out of 10 Americans fear entrusting their retirement to an incompetent administrator, millions of Americans may unknowingly be doing exactly that right now! Read our shocking exposé and learn the facts!

8. Which of the following is more frightful to you?

  • 64% – Having my personal tax returns audited by the IRS
  • 37.3% -Walking around for a week wearing pants with pockets overflowing with live worms

Question 8

9. Which of the following is more frightful to you?

  • 31.7% – Be strapped atop a vintage stunt plane while it performs a typical aerobatics routine
  • 70.% – Be tied to the Social Security program as your sole source of retirement income

Question 9

10. Which of the following is more frightful to you?

  • 66.1% – Losing my job and having to live only off of my current savings for a year
  • 34.6% -Renting an extended-stay room in the Bates Motel and sharing a shower with Anthony Perkins

Question 10

Were you surprised by any of your responses?

These results are a sad commentary on the financial condition and current state of mind of so many of our family members, friends, neighbors and colleagues.

The definition of insanity is doing the same things in the same way and hoping for different results.  So, if you’re ready to find a better way to save and invest for your financial future that gives you peace of mind and lifetime financial security, check out the Bank On Yourself method.
Request Your Analysis Button
To find out how much brighter your financial picture could be if you added Bank On Yourself to your financial plan, request your free, no-obligation Analysis now, while it’s fresh on your mind!

Bank On Yourself Round-Up for Week of June 3, 2011

roundupHere are summaries of four of the most interesting and thought-provoking items that have crossed my desk this week…

Forbes Magazine Shocker:  Why your 401(k) isn’t what it’s cracked up to be!

A stunning article appeared in this week’s Forbes.1 Here are a few of the revelations you absolutely must know about, if you participate in a 401(k):

  • On average, participants in small plans (which includes 90% of all employees) pay 1.9% in fees annually!
  • Even paying fees of just 1.5% could wipe out one-third of your nest-egg
  • In spite of all the noise about “fixing” the 401(k) through new disclosure rules that will be going into effect, they “could cause some 401(k) services to get even more costly.”

 

Why you need an 8-10% annual return just to break even in your 401(k)…

It’s all documented in this 401(k) exposé I co-wrote with Pulitzer Prize-nominated journalist Dean Rotbart. You owe it to yourself to have the facts!

[Read more…] “Bank On Yourself Round-Up for Week of June 3, 2011”

How Everyone Can Love Paying Bills and Taxes: No, We’re Not Crazy!

A core tenet of the Bank on Yourself Nation is that money should always bring pleasure or satisfaction, never regret or guilt.

overwhelmed by bills

For so many people, that principle seems unrealistic, especially considering how very hard it is most months just to stay afloat – paying for necessities such as groceries, medicines, utilities, transportation, insurance and the like.  Oh yes, let’s not forget the always hungry tax monster!

overwhelmed by bills

Seems to so many of us that our paychecks are swallowed whole by our obligations before we ever get the chance to even sample the flavor of having some accumulated cash in our pockets and bank accounts.

To which we can only respond… how wonderful!

Wonderful? Really? Paying Bills! And Taxes?”

Absolutely.

[Read more…] “How Everyone Can Love Paying Bills and Taxes: No, We’re Not Crazy!”