I have a low regard for the 401(k) system. It’s supposed to provide a tax-deferred way for plan participants to save for retirement. Instead, it is a trough from which advisers, brokerage firms, and mutual fund families feed, depleting returns by billions of dollars of obscene fees every year. And they’re the ones who are [...]
It’s great that you’re saving for retirement. You’re probably taking advantage of a 401(k) plan, a traditional IRA, a Roth IRA, or some combination of these retirement plans. However, you can undo all the good by making a single bad decision with these accounts, costing you dearly in taxes and penalties. Fortunately, it’s easy to [...]
What’s your biggest fear as a retiree? Outliving your money. The securities industry is great at fearmongering. It wants you to believe you need it to avoid this fate. The harsh reality is that using brokers and advisers who tell you they can “beat the markets” makes running out of money a self-fulfilling prophecy. Unfortunately, [...]
Generally speaking, I am no fan of 401(k) plans. They are brimming with high costs, conflicts of interest, and poor investment choices. The primary beneficiaries of these plans are mutual funds and plan advisers who skim off billions in fees-money that should be going into the accounts of plan participants. The allure of these plans [...]
You have to feel sorry for anyone nearing retirement or those who have recently retired. They worked hard and saved enough to retire with dignity—or so they thought. In the stock market crash of 2008 and 2009, few were spared the market decline, and even fewer hung around for the rapid recovery beginning in 2009. [...]
The income constraints are gone: now anyone can convert a pre-tax IRA or 401(k) plan assets into a tax-free Roth IRA. All you have to do is pay ordinary federal and state income taxes on your pre-tax IRA, and you’ll have created a fund from which no taxes will ever be due. So should you [...]
What happens when you make after tax contributions to a 401(k) plan and you now need the money? Can you withdraw just the after tax contributions and not pay any tax? Or, will the IRS require you to withdraw the funds in a proportionate way, based on the total amount in the plan?
A reader sent me this question this week: Q: I have a growing concern that the Obama administration will seize all 401(k) accounts as a "fix" for soc...
What is a safe investment for retirement money in these uncertain times? Money market accounts and CDs offer the best investment for keeping your retirement money safe, available and earning some interest, without taking any real risk. But consider reinvesting in the stock market if you have more than 15 to 20 years to invest before retirement.
When you're nearing retirement should you invest in a Roth IRA or pay off your mortgage? What's the better choice? It depends on the interest rate on your mortgage and whether you can earn more by investing the money. Learn about Roth IRA investing and the benefits of paying off a mortgage early.
