Comments on: Is the 401(k) Broken? I’m Not So Sure

By: 401(k)

401(k) — Mon, 06 Jul 2009 07:31:15 +0000

My 401K investment strategy was simple, I moved my money to a safe haven, the stable value bond fund. After the market stopped bottoming out and I saw what I considered a sustained leveling off and some signs of life out there, I started incrementally moving money back into the stock index funds.

By: Jake

Jake — Wed, 24 Jun 2009 18:28:35 +0000

If you have decades until retirement, buying and holding is the best thing to do. Rebalancing or adjusting is simply market-timing. Most people cannot market-time. How do you know when to adjust? By watching the market? But by then, you’ve already either locked in your selling losses or missed the cheap buying opportunity. Buy a well-rounded index fund and hold it for the long run. The market will go back up. It always does.

By: Dan

Dan — Wed, 24 Jun 2009 18:12:00 +0000

There have been some quiet rumblings amidst the fat leeches in Congress to eliminate the 401k completely. Their problem with it isn’t lack of participation or people not saving enough; Congress detests the fact that it’s a tax shelter – especially so for the wealthy. How many hundreds of billions are locked safely away in the 401k system away from Congress’s greedy paws? “Lawmakers” can’t stand this.

By: Moneymonk

Moneymonk — Mon, 22 Jun 2009 19:08:37 +0000

“Buy and Hold is Not the Same as Buy and Forget”

Bravo!!!

I buy and rebalance personally

By: Rob Bennett

Rob Bennett — Wed, 17 Jun 2009 21:03:59 +0000

The biggest problem is that the vast majority of those recognized as investing “experts” have ties to The Stock-Selling Industry. Hardly the people you want to go to to learn whether stocks are the best place to invest your money at a particular time or not.

There has been academic research for 28 years showing that valuations affect long-term returns and that investors seeking long-term success need to lower their stock allocations when prices are at truly insane levels (as they were from 1996 through 2008). We need to get the word out to aspiring retirees.

I think a good case can be made that government intervention is needed on this one. The free market has failed us in the area of providing useful investment advice advice for aspiring middle-class retirees.

Rob

By: Miranda

Miranda — Wed, 17 Jun 2009 19:32:06 +0000

I agree that the 401k doesn’t necessarily have to be scrapped. In the end, some sort of investment is practically necessary in order to even come close to supporting someone in what we have come to expect as “retirement”. Maybe our expectations for retirement need a re-adjustment, as well as our expectations for our 401k performances. (But I’m not really qualified on this subject; I have a Roth IRA…)

By: J. Money

J. Money — Wed, 17 Jun 2009 17:38:16 +0000

I think it certainly depends on how each of us use it for sure. I’m crazy fortunate enough to have 100% of what I contribute (up to the legal max) matched, so I take advantage and max that bad boy out = lots of free money. If I didn’t have that match, it would be a totally different story…

I’ll agree there are some things wrong with it for sure, but as you mentioned there are some great perks that come with it as well.