muses of the moment

November 17, 2012

Advice about your 401k

Filed under: 401K and IRAs — totallygroovygirlfriday @ 6:52 pm

….from Yahoo Finance.

So groovygirl had to read this story just to see what bad advice they gave to investors.

Click here for Is It OK to Borrow from Your 401(k) Before You Retire?

Surprisingly, it wasn’t that bad. They must be trying to get people to stop borrowing from their 401k plans before the next cash flow panic in the system.

They suggested no, but they gave a few outrageous assumptions in their argument. For instance they claimed you could leave in the money and make 5% a year (getting to some high number by retirement).

Who in the world is making 5% a year return on their 401k? Especially over a 20-year period!!

Side musing: real inflation is running between 7-10% since 2000. Even if you got a 5% gain, which is totally bogus, you are losing money. In other words, your money will not buy the amount you though it would when you retire. But, better than social security…..only gaining 2-3% at best.

They also suggest that if you borrow money from your 401k for a house, you might make your money back in the capital gains on the property. Hoot!!

Or…..you could skip the 401k entirely, save money and invest in long-term investment cycles (one of which we are in now: physical gold and silver) and profit from it at the peak of cycle instead of age 59 and half, which might not coincide.

Groovygirl’s title: Is It OK To Have a 401k At All?

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3 Comments »

  1. Yes, good article.

    gg

    Comment by totallygroovygirlfriday — November 18, 2012 @ 6:34 pm

  2. gg,

    I agree with Jim Sinclair on this issue. I think IRAs, 401Ks, and even pensions are at great risk.

    November 20, 2012, at 12:09 pm
    by Jim Sinclair in the category Jim’s Mailbox

    Jim,
    Would you address the recent hearing sponsored by the Treasury and Labor Department’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRAs and 401k plans?
    Many thanks,
    CIGA Phil

    Phil,
    Yes, get out of them as fast as you can. Then get out of the system that would even consider such a thing.
    Jim

    ==
    (CNSNews.com) – Treasury Secretary Timothy Geithner said Friday that Congress should stop placing legal limits on the amount of money the government can borrow and effectively lift the debt limit to infinity.

    http://cnsnews.com/news/article/treasury-secretary-geithner-lift-debt-limit-infinity

    Comment by sw — November 20, 2012 @ 6:42 pm


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