Those with bigger salaries save in 401(k)s

http://feeds.bignewsnetwork.com/?sid=8d5f86080d7825d8

U.S. workers with the largest salaries are more likely to save for retirement via 401(k) and 403(b) plans, a survey found.

An online/Harris Interactive Personal Finance Poll of 2,025 U.S. adults found 22 percent of workers with annual household incomes of $35,000 or less participate in a 401(k) or 403(b) plan -- compared to 40 percent of workers with incomes of $35,000 to $49,999, 54 percent of workers with incomes of $50,000 to $74,999, and 66 percent of workers with incomes of $75,000 or more

more...

This is such a revelation!!! (being sarcastic)

SO UNPREDICTABLE!

The average investment choices in a 401(k) are flea-ridden dogs.

They don't account for the disastrous "new Bush economy" foisted on us.

Right now, most of my money's in very short term stable funds (not keeping pace with inflation) and international funds.

Click here for why my money's there. Even us "lucky duckies" are worried about our retirement.

I'm in my 40s, and have the dubious distinction of being the first generation since WWII to face retirement with no real pension.

Giving something almost worthless to the upper-middle class, while letting everyone else starve is the Republican agenda.

You better believe the Republican "base" doesn't have to worry about whether their 401k will be worth anything.

until you leave your job. The best you can do to maintain safety in a 401k is to diversify.

head over to the Personal Finance and Investing group for more ideas...

On EDIT: Sorry this was a reply to #13

You can control your future no matter who is presdient.
I suggest you avoid the pop authors like suze orman who works for insurance companies and stick with the classics.

My first suggestion is Andrew Tobias simply because he explains the difference between an index fund and a mutual fund. The rich dad poor dad books are a terrific start for beginners (yes a pop author), but beyond his first book - "Rich dad poor dad" I suggest you stop reading him. He gets to be an MLM person after that.

The point though, that you deserve any financial position you're in because you can get to a library, educate yourself, and do a whole lot better. You're simply choosing not to.

You assume I haven't????

Not everyone who isn't rich is ignorant.

"...the dubious distinction of being the first generation since WWII to face retirement with no real pension"

The economy goes in the tank, and because 401(k)s are uninsured annuities, you lose all your money.

Companies are ditching their defined benefit plans--the ONLY retirement plans worth a shit in private industry--in favor of these do-it-yourself ripoffs. People are screwed again.

People are losing well-paid jobs and have to take shit jobs in order to make ends meet and CAN'T save money.

People who work in government jobs are having their pensions under assault by the same fascists who want to destroy Social Security.

And despite temporary setbacks to gut Social Security, expect the crooks and con men to come back with more phony proposals to privatize it.

You are living in a fantasy world. Few people are in the income bracket to "diversify" or bother with nonsense such as an "index fund" or a "mutual fund."

And fewer still will be able to do it.

and at the same time recommend ANY book by Amway scheister and liar extrordinaire Robert Kiyosaki (Note: I don't agree with everything John Reed says, but after reading a few of Kiyosaki's books, he's right on the money with this one).

It's the same thing as telling someone they need to read up on politics by recommending a book by Anne Coulter.

with there. I know ppl passionately don't like Kiosaki, and I don't like him either, but I do like the way he presented finance in his first book.

I prefer any Market Wizards Book, Van Tharps first book and William O'neils how to make money in stocks. But the last thing I would do is recommend them to someone who's just starting investing. I also love peter Lynch but only for reading. The last thing I would do is recommend a fundamental investor approach to anyone. Motely Fool is easy for beginners and I really liked their tax book but still, he /she would get more out of Kiosakis book for a first time book.

I personally like his approach that a house is often a liability not an asset. Not what people want to hear but so fucking true.

- I have to throw in Stanley and Danke - I do love the millionaire next door but the hell if anyone I've ever bought it for would read it.

Btw, what would you recommend? I've only read several hundred financial tombs and hang on financial sites. WTF would I know. I'm a system trader. And, I have no debt. :)

it's gotten nowhere. Can you transfer that money to a personal IRA or does it have to stay there until you quit/retire from the company? If I could, I'd move it out of there so fast.

The company used to offer a 5% guaranteed income fund but soon after the coward-in-chief stole the election they pulled that as an option for investment. 5% over the past 5 years sure looked good to me.

i have ZERO dollars invested in a 401k. I've got a socially responsible mutual fund, a short term cd and savings.

To my limited understanding, it's mainly how you account for the savings on your taxes. An accountant can answer this.

a huge difference is that your employer might match at least some of your contribution. that's free money and that's hard to beat.

second, a 401(k) is tax-deferred. you don't pay taxes on the principal or earnings until its withdrawn. that's makes it hard to beat.

a deductible ira has the same tax-deferral, but is limited to, i think, $4,000/yr, vs. $14,000 this year for a 401(k).


on the flip side, you have many more choices in an ira and the expenses and fees can be dramatically lower.

Some (very few) employers offer this.

Basically, it works like this:
The employer partners with a brokerage firm (such as Schwab or Harris). You enroll in the 401(k) and sign up for the Self Directed Account (or Self Directed Window or Personal Choice Retirement Account). They open a special account for you with the brokerage firm. You transfer money from the 401(k) into that account. Then you can invest with any fund or stock the brokerage firm offers. But, you can't just put your own money into this account (it has to be transferred from the 401k) and you can't take money out of it (it has to be transferred back to the 401k and follow the plan rules/guidelines). You pay a separate fee for the account, but it is generally lower than if you just opened an account on your own. And it still grows tax deferred.

The thing is, most people can barely pay their bills as it is and are uneducated about making wise investment choices.

If so, it's foolish to throw away money like that.

But that is becasue I'm given TIAA-CREF as a choice (teachers). They are very good, and they have a few good funds. I have money in the TIAA annuity, social choice, and inflation-linked bonds. Some in real estate, but I worry that is gonna go bust fast...

:shrug:

except it's for public university, civil, and not-for-profit employees.

And I have made money even while Bush has been President. The stock market is the way to go for the long haul.

big taxable withdraws during retirement mean your social security check will be taxed at a higher bracket, a hidden cost of a 401(k).

the roth ira or roth 401(k) (coming soon) doesn't have this problem.

I'm in my mid-30s, and I am under no illusion that SS as we know it will exist 30 years hence.

Given that, does that make SS a hidden tax CUT? lol

These bastards have been fostering the idea that SS won't be there when the younger generations retire precisely to speak it into reality. Don't allow them to get you to believe that way. It has existed all this time because people believed in it and expected the politicians to obey their wishes and leave it alone. The only problem it faces is the political willpower to pay it back all the $$$ they've borrowed from it.

when you are retired than it is now so your taxes will be less. The Roth is after tax so you don't have to pay taxes later when you take money out of it.

Message removed by moderator. Click here to review the message board rules.

of course people with more expendable income save it .....or hopefully do so...

either lack of understanding or the option to participate.

Since the 401k deductions are pre-tax it is very likely your "take home pay" will be equal and sometimes even greater when you participate in the 401k versus not.

they are living on the edge of their income...even if it is $100K a year...

I know some of them...and I shake my head at how foolish they are...

I'm 36 and at 40k...

so far it has lost money...

I've always wondered...sure your avoiding taxes on your income, but how does that balance out with the rate you'll be taxed at in 35 years? surely the tax rate will go up right? how much of a benefit is it REALLY if you pay 10% more in taxes?

if I put in at least 6%...so I do that to not lose out on the company's contribution to my account.

I have lost and gained in the past 10 years...but mostly gained...although not as much as the "experts" would have people believe.

Welcome to DU!! :toast:

you are talking about specific borderline cases where the reduction of income from a 401(k) might cause someone's income to fall below a threshold where they'd otherwise lose some credit (e.g. child tax credit) or deduction. Those would be rare cases, however.

As mentioned by others, people worried about the cons of a 401(k) should looking into Roths. Despite these being post-tax accounts they have significant advantages over a 401(k). - K

I'm 41. My strategy is to pay off my remaining CC bills and my student loans, which I can probably do by the end of next year. Meanwhile, I'm saving up to buy some property hopefully in 2007.

Thanks to that no good sunuvanazi and his Enron+WorldCom buddies, my 401k crashed from $140k (already down from it's nearly $300k peak because of the dotcom bust) to $27k between 2000 and 2004. I finally had to cash the thing out, reinvest in real estate funds, and am STILL working to get it back to the $100k mark. Luckily for me, I'm young and still have a few decades to save, but Bush and his cronies wiped out every penny I saved in my 20's.

I won't do it again.

Rule number 1 of investing is to fully understand what you are investing in and how the market works. only 5% of the mutual funds performs at market value. That means you have a 95% better chance if you invest in an index fund. Most 401ks are mutual funds.
People go for the free stock match instead of the index fund. It's usually a bad move because they can't get out when their mutual fund loses money. they buy into Hold and Pray which is the worst stock advice of all time. Few financial instutions other than mutual funds will stay in a stock with over a 2% loss. Yep, thats why they all bailed and the stocks fell while the hold and pray - mutual fund investors held on.

Remember every stock bet long has someone betting it short on the reverse side of the bet. When you lose money it goes to the person who bet it short. I don't know any 401ks that let someone turn their bet around to short a stock going down. I do know the financial instutions did that and shorted every penny lost in the last 4 years out of people while telling them to hold.

I now invest with Sharebuilder and pull my money out at 3% reverse profit on any stock. I advise anyone who wants to invest to bother reading at least 2 books on it, if not 10. Not knowing and letting those crooks invest your money is screwing you out of it.

Mutual fund companies make money by switching stocks and billing you for it. That's it. Not by profit record on stocks. hence the mutual fund scandal that is continuing.

Learning to sell losers early is very good advice, and advice that is very difficult for most people to follow as the psychology is to hold and hope to break even (just like gamblers in LV).

However, I wouldn't characterize quite so negatively the "buy and hold" crowd. It's just that few people's time horizons are long enough to really make that work. You have to think 20 years vs. next year or even next quarter. Pick any 20 year period in the market and the gains will be positive.

That said, buying index funds is very smart relative to chasing mutual funds with recent large gains. As you say above, most mutual funds are not going to beat the index and they charge a lot more overhead for that privilege.

Most folks simply don't have the time to follow individual stocks, but they should at least diversify in order to protect themselves. Lots of basic books out there on these topics. - K

I have overcome the dot.com losses of the 90s and am making money. You cannot time the market. Stay in for the long haul after you are diversified and are using dollar cost averaging.

you guys are getting!!! Talk about getting screwed!!!

She wanted this to all of you she wants 401k plan too!!!

is self employed and she's allowed to donate much more and keep it untaxable till she draws out. It's one of the big advantages of being a business owner. I can't remember the name of the iras, off hand but they exist.

thats exactly what she is going to do !!! Thanks!!!

That's what I have. I'd have to check my records, but I think I can put up to 15 percent of my income annually. Before Bush got in office I made so much money I could put in the maximum every year. I still aim for that amount, but it's much more of a struggle now.

Thos "with larger salaries" usually do better ..who'd-a-thunk-it?

no shit Sherlock, I say.

The only people who would ever see anything worth a crap out of those crap accounts are those who are able to save anyway.

Everybody else is screwed.

And face it: the only reason 401(k)s exist is not to make workers rich but to save companies piles of money in pension costs by shifting risk from employer to employee.

pension plan which contributes another 6 % of your salary to the 401k. I am saving a total of 27% of my annual salary right now. Combined with my wife's 401k and pension which works like mine just nit as good #s we save $2500 a month. This helps make up for the money we had to withdraw when both of us lost our jobs abd we were over 55. Four fucking years we survived with never a period when both od us were employed and some times when neither of us were. I figure we have to work until age 69 bacause of that motherfucker.

look at the performance and look at what performance you are getting with the 401k.

Matching 50% sounds nice unless - unless your fund is being allowed to lose 50% of it's value (most mutual funds do this). Some 401ks are index funds and I really hope yours is.