12 Ways to Make the Most of Your 401(k)

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I was laid off after 9/11 from one of the big nationwide banks. The best thing I did was transfer my 401K and Cash Balance Plan (traditional retirement plan that was converted to a cash fund) balances to my own investment adviser for management. Returns have far exceeded what they would have yielded had I kept the funds with the bank and I certainly would not have gotten any personal financial planning advise.

Phillip McDowell of FL 12:23AM August 09, 2010

I retired in 2005, and have been traveling & living in third world countries since then. After a career in Federal law enforcement in the U.S., I now truely believe that many of these supposedly "backwoods" countries are much cheaper, safer, interesting, and more fun than living in the U.S. in retirement.
Your savings will buy a life in Central/South America or Asia, much easier than trying to pinch pennies in the U.S. Look into it; it might be the best move you have ever made!

traveler of CO 4:06PM June 29, 2010

The one factor they did not consider is medical costs. Just the premiums I pay will choke most people. Then if your spouse gets sick, whammo!!! their goes the savings and a good part of the 401K. Looking forward to being a burden to this society I have put so much of my life into. I worked hard, saved and invested and have very little to show for it. In 3 years I am retiring regardless of if I can afford it or not. We can spend so much money on curing the rest of the worlds ills but not our own.

Dave of AR 11:30AM June 28, 2010

You have missed the point entirely.
In this country, 5% of the population controls or owns close
to 60% of its wealth. As long as that stays the same, no matter
what you do(unless you win the lottery), you will always be
treading water.
The key is make certain that everyone who is able and willing to
work gets a fair share of the pie. The only profession that
warrants very high compensation is a surgeon.
Ball players, actors, etc. are drastically overpaid.
I will be that close to 2/3's of the US senators are millionaires.
Change that very easily by only allowing poor or middle class
people to run for office.
I many cases, these multi millionaires and billionaires were born
with a silver spoon in their mouths. They do not deserve to inherit the monies that their parents made. In Japan, inheritance
monies go to the state.
Unless things change radically, this country is headed in the
direction of a third world country.
Structural change is the only answer.

tobias tober of ME 8:07AM June 28, 2010

You might as well go to the gambling boat or whatever the chances of getting a return on your money is better. What fool would put his hard earned money in the stock market in this day and age? Either they fee you to death or some investment bank goes belly up or some CEO fills his pockets and you loose all your money. Interest rates are so darn low who in their right mind even think of putting their money there? If this is the best that America can do it is time to start looking elsewhere.

glen woker of IL 11:14PM June 27, 2010

401 K plans generally offer a small amount of funds to invest in. Why do employers feel they know what is best for my money. Ideally, employees should be given the option of investing a percentage of their 401 k contributions in a self directed portfolio. My current 401 K has realized a -1% loss while my self directed IRA from a former employer is current up 35% for the month. It is ridiculous that emploees have no say on where to invest their money. Afterall it is ours.

cwk of VA 8:31PM June 27, 2010

We have been hearing this same line for 20+ years. Makes me wonder who really benefits from a 401K. I think it's Wall Street. It's almost like a Ponzi scheme. With 87 million boomers retiring shortly then need more cash inflow--sound familiar?
Yeah the 'free money' match was an incentive for me. However, after 14 years in a 401k with inflation factored in I basically had 0% return. The 401k never beat the market and you still pay when they lose money. I can lose the money. Isn't that why I pay you to manage it? Wall Street firms see 401k money as gambling money. The only problem is if they win, they win big--you alittle. They bet wrong, guess who loses. That's right, you do.
Another problem is the gov't. Remember, the gobbermint can wield control of your money at anytime they decide to. In fact, there has been alot of talk this past year of nationalizing 401ks so the gobbermint can find a buyer for its T-bills. In return, the kind gov't will give you a annunity that pays what they think you should get each month. When you die do your heirs get the money that you worked so hard for. Well yes--50% of it and that 'it' will probably be determined by your caring Uncle Sam. Do you think people who had no 401k will be allowed in such a program. Of course, they will, that's Barry's 'spreading the wealth'.
Oh, don't forget the mantra: When retired your 401k will be taxed at a lower rate. In short, don't count on it. We'll get a taste of it on Jan 1 2011 when the Bush Taxes cuts sunset and new taxes are enacted at the Fed, State and local gov'ts. The gov't says the debt is over 13 trillion. The only problem with that figure is they leave out many unfunded liabilities: Fanny and Freddie Mac (~6-9 trillion), state and local debt, Social Security (paper IOUs), Medicare, Medicad. Add these figures to the math and the total is nearly 80 trillion or the total GDP of the planet for a year. How do you think the gobbermint will pay for this? That's right with more taxes and higher tax rates.
Don't forget the hugh increases coming to health insurance too. Barry lied about that too.
By the end of the year, the Dems will probably, in a scorched earth policy, will cramp down our throat Cap and Trade (or by some other alias) and introduce us to a VAT tax. We will look more like Europe. Is Europe setting the world on fire?
My suggestion at the very least is stop contributing to 401k. Use that money for a food cache, water supply, farm land, solar generators, weapons, silver and gold. If Barry's scorched Earth policy gets swallowed, it will get alot worse and your money in your 401k will be gone. A 30% penalty is nothing compared to 100%. The 401k is not what we have been lead to believe.
Hope for the best, prepare for the worse. DCD

Dave of IN 2:10PM June 27, 2010

I was a waitress for about 8 years before becoming a nurse recently. This article is so helpful, for me, because of the lack of experience I have in financial planning. Going from a place where it was check to check, to now being in a place that can afford to be proactive is wonderful! I'm still new to all of this financial jargon, but this article definitely helps me understand what I need to learn about, so that I can accomplish my goals.

barbie of TX 11:43AM June 27, 2010