Sunday, June 7, 2009

Leave our 401(k) alone

The following is a re-post from my FB page January 8th 2009.

Big Slide in 401(k)s Spurs Calls for Change -
Source: "The stock-market rout has ignited a crisis of confidence for millions of Americans who manage their own retirement savings through 401(k) plans."

Very strange...every time I ever take a allocation survey it always profiles your risk appetite and compares it to that of the 70's bear market. Now, I wasn't alive then and I am in my young 30's so while this does hurt I am willing to live with the short-term losses for the long-term gains. Congress should not touch or modify the 401(k) plans just because some people can't grasp the concept of doing their own research or hiring a financial planner (which I have not done nor do I have the resources to do so). In one sense it is very clear there is no 'true' educational program other than what I have learned from on what companies / funds to purchase. Therefore it is no surprise when employees make poor decisions we all think the system is bad because the people didn't make the right decision especially since they probably don't understand who they are investing in and why. We need to improve the education in our schools and workplaces of how to invest, why we should invest and forget about the late 90's and the high flying days of quick gains in a few days / months. Buffet probably has one of the best lines I have ever heard....I don't care what the market does today, tomorrow, or the next few years, invest in good companies (or in most 401(k)'s good funds) and periodically check on them and re-adjust as needed. Too many people are concerned with what happened in the market today vs. what is going to happen in the next 3 - 5 years. Oh and don't push me into SS considering as a previous poster stated it is no more than a type of ponzi scheme as I'm paying for my neighbors who are now retired...and given the current funding and plans for SS it will be bankrupt when I am ready to retire....and just for the naysayers...if that isn't true then why do we talk about reforming the SS system?!?! Stay out of our finances DC and leave the 401(k) system alone!!

No comments:

Post a Comment