Comments on: 5 Reasons to Throw Away Your 401K http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/ Saving, Earning, and Investing Money Sat, 11 Feb 2012 03:58:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tom http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-593826 Tom Thu, 04 Aug 2011 05:06:33 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-593826 1) A large majority of 401(k) plans have a match. You did say we are considering those without, so let's move on. 2) Why are you assuming a higher rate of return for the regular account? There are plenty of choices in a 401 (k), and even so, most index funds beat mutual funds and individual stock pickers. 3) You have failed to account for the fact that any realized capital gains and dividends paid to your 401 (k) will be tax free. Every year. 4) I guess tax rates could be raised sometime in the future, but not nearly high enough to offset the huge plus side on the front end which will accumulate at compound interest for 40 years, nor the dividends and capital gains that will not be taxed during that time (also accumulating in a compound manner). The only downside to the 401 (k) is the penalty for taking it out early. Plan accordingly. You really just show that you don't understand compound interest, something which Einstein called the most powerful force in the universe. Please don't spread any more uneducated drivel. 1) A large majority of 401(k) plans have a match. You did say we are considering those without, so let’s move on.
2) Why are you assuming a higher rate of return for the regular account? There are plenty of choices in a 401 (k), and even so, most index funds beat mutual funds and individual stock pickers.
3) You have failed to account for the fact that any realized capital gains and dividends paid to your 401 (k) will be tax free. Every year.
4) I guess tax rates could be raised sometime in the future, but not nearly high enough to offset the huge plus side on the front end which will accumulate at compound interest for 40 years, nor the dividends and capital gains that will not be taxed during that time (also accumulating in a compound manner).

The only downside to the 401 (k) is the penalty for taking it out early. Plan accordingly. You really just show that you don’t understand compound interest, something which Einstein called the most powerful force in the universe. Please don’t spread any more uneducated drivel.

]]> By: time to fly http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-353283 time to fly Fri, 25 Feb 2011 03:09:55 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-353283 AVOID TAXES AND USE ONLY CASH!!!!!!!! It is simple. If you put your money into any retirement account under someone else's control, you will lose it, or its value. Follow my logic. If you give a company money or invest, the amount of time you give those companies to hold your money is more time they can figure a way to cheat you and run off with your hard earned money. Never invest in American anything, they are crooks. Mankind is a bunch of crooks it is in our nature. Keep your money in a safe account of buy something like metals or valuables that appreciate over time. Next, we know Uncle Sam has cheated us all, and they do not deserve your tax money. All of us need to start using cash. Cash is untraceable and helps people not pay taxes. Now you may work for an employer and be forced to pay taxes and may think you should be against it, but ... The quicker you can cause our crappy cheating U.S. government from functioning and ripping us off, the sooner we can get it back on track. When using cash or accruing it, make sure you take the cash out of the U.S. on trips and deposit it in a non-America based area like the Cayman Islands. Never put money or use credit that traces the money. You get cash in your business, simply pocket it and take it with you on your next trip. Alternately, you can buy precious metals where you don't give your name and it may make it easier to transport. Forget all these 401K schemes and other investing boolsheet. They are distractions on how you can really save for your future. It takes less than one penny out of one dollar for everything we need from roads to infrastructure. Everything else is someone else's agenda or waste. AVOID TAXES AND USE ONLY CASH!!!!!!!!

It is simple. If you put your money into any retirement account under someone else’s control, you will lose it, or its value. Follow my logic. If you give a company money or invest, the amount of time you give those companies to hold your money is more time they can figure a way to cheat you and run off with your hard earned money. Never invest in American anything, they are crooks. Mankind is a bunch of crooks it is in our nature. Keep your money in a safe account of buy something like metals or valuables that appreciate over time.

Next, we know Uncle Sam has cheated us all, and they do not deserve your tax money. All of us need to start using cash. Cash is untraceable and helps people not pay taxes. Now you may work for an employer and be forced to pay taxes and may think you should be against it, but … The quicker you can cause our crappy cheating U.S. government from functioning and ripping us off, the sooner we can get it back on track.

When using cash or accruing it, make sure you take the cash out of the U.S. on trips and deposit it in a non-America based area like the Cayman Islands. Never put money or use credit that traces the money. You get cash in your business, simply pocket it and take it with you on your next trip. Alternately, you can buy precious metals where you don’t give your name and it may make it easier to transport. Forget all these 401K schemes and other investing boolsheet. They are distractions on how you can really save for your future. It takes less than one penny out of one dollar for everything we need from roads to infrastructure. Everything else is someone else’s agenda or waste.

]]> By: SEP IRA: Self-Employed Retirement Plans http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-352836 SEP IRA: Self-Employed Retirement Plans Mon, 14 Feb 2011 20:58:14 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-352836 [...] income. The life of a contractor is often one without a 401k. Despite my Devil's Advocate post of throw away your 401k, having the option for automatic savings is great when you are as Lazy as I am. Well I'm not going [...] [...] income. The life of a contractor is often one without a 401k. Despite my Devil's Advocate post of throw away your 401k, having the option for automatic savings is great when you are as Lazy as I am. Well I'm not going [...]

]]> By: Gargamel http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-171806 Gargamel Fri, 05 Mar 2010 17:32:53 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-171806 I concur. The 401k distorts the market and isn't a good proposition. I would say put in the matching amount and become a disciplined saver/investor. The tax penalty for taking out your own money is criminal. Having retirement age around the time of the average death age is not coincidental. I know now the life expectancy is higher but they are already adjusting it to match. The whole system is one giant ponzi scheme. I concur. The 401k distorts the market and isn’t a good proposition. I would say put in the matching amount and become a disciplined saver/investor. The tax penalty for taking out your own money is criminal. Having retirement age around the time of the average death age is not coincidental. I know now the life expectancy is higher but they are already adjusting it to match. The whole system is one giant ponzi scheme.

]]> By: Jason http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-110614 Jason Sun, 26 Oct 2008 06:24:34 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-110614 Looks good on paper. You're missing one aspect though. You are not taking in to consideration that most people are not putting a (1) time, lump deposit into there account. Most people are contributing to there 401.k on a monthly or even weekly basis. Therefore, every deposit made after year (2) will not have enough time to overcome the initial tax burden. In addition, your senerio only works for people in a 15% tax bracket. Many americans are in the 28% tax bracket. Looks good on paper. You’re missing one aspect though. You are not taking in to consideration that most people are not putting a (1) time, lump deposit into there account. Most people are contributing to there 401.k on a monthly or even weekly basis. Therefore, every deposit made after year (2) will not have enough time to overcome the initial tax burden. In addition, your senerio only works for people in a 15% tax bracket. Many americans are in the 28% tax bracket.

]]> By: NewSunSEO Inc http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-89258 NewSunSEO Inc Tue, 17 Jun 2008 20:23:47 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-89258 I have to somewhat agree with what you are saying. With the economy the way it is now investing money by itself maybe the safest way to go about investing. Also I believe that you shouldn't put all your eggs in one basket and still invest into your 401K for your own personal investing safety. This is a really nicely written blog and I look forward to reading more of your great work. I have to somewhat agree with what you are saying. With the economy the way it is now investing money by itself maybe the safest way to go about investing. Also I believe that you shouldn’t put all your eggs in one basket and still invest into your 401K for your own personal investing safety. This is a really nicely written blog and I look forward to reading more of your great work.

]]> By: Robert http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-85492 Robert Sun, 11 May 2008 13:48:08 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-85492 My reason for steering clear of 401ks is the ponzi scheme they get invested in, the US stock market. My employer's investment options are a$$ and then some. I might as well invest in apples and leave them out in the sun and hope they are good to eat when I 75 (I am 33 now), which ain't happening. The reality is most Gen X and Gen Y people that have been shoved into this ownership society scam by the republicans will be living a life of work and misery unless they hit a lottery or have some rich uncle they do not know about with a large inheritance. I have already accepted I will die at some job when I am in my 70s or 80s when I praying for some dignified death. Maybe I'll save something in a CD so I can go part time and sleep in late a couple days a week. What will really happen is millions of Gen X and Y people are going to be wandering around broke and homeless in their 70s and I hope the government has some plan to take care of all those people (I'll likely be there with them with age discrimination the way it is in the US). Only then will they see the failure of this ownership society ponzi scheme. My reason for steering clear of 401ks is the ponzi scheme they get invested in, the US stock market. My employer’s investment options are a$$ and then some. I might as well invest in apples and leave them out in the sun and hope they are good to eat when I 75 (I am 33 now), which ain’t happening.

The reality is most Gen X and Gen Y people that have been shoved into this ownership society scam by the republicans will be living a life of work and misery unless they hit a lottery or have some rich uncle they do not know about with a large inheritance.

I have already accepted I will die at some job when I am in my 70s or 80s when I praying for some dignified death. Maybe I’ll save something in a CD so I can go part time and sleep in late a couple days a week.

What will really happen is millions of Gen X and Y people are going to be wandering around broke and homeless in their 70s and I hope the government has some plan to take care of all those people (I’ll likely be there with them with age discrimination the way it is in the US). Only then will they see the failure of this ownership society ponzi scheme.

]]> By: How Not To Become a Millionaire · Money Millionaire http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-85222 How Not To Become a Millionaire · Money Millionaire Thu, 08 May 2008 22:23:36 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-85222 [...] by never asking for a raise, doing crappy work, and staying in the same job. You might as well throw away your 401k as well. Muttering about your red stapler can’t hurt [...] [...] by never asking for a raise, doing crappy work, and staying in the same job. You might as well throw away your 401k as well. Muttering about your red stapler can’t hurt [...]

]]> By: Stix http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-80769 Stix Mon, 07 Apr 2008 07:18:10 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-80769 http://money.howstuffworks.com/401k2.htm http://money.howstuffworks.com/401k2.htm

]]> By: Stix http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-80768 Stix Mon, 07 Apr 2008 07:16:33 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-80768 Obviously a Traditional IRA and a lot of assumptions about loads and fees. You could easily invest in a ROTH IRA and for go the Tax problem. Also you can invest where you do not have those fees for maintaining and loads. especially at 15K initial - many firms offer 10K free servicing. As for the funds - buy stocks that pay dividends. Obviously a Traditional IRA and a lot of assumptions about loads and fees.

You could easily invest in a ROTH IRA and for go the Tax problem. Also you can invest where you do not have those fees for maintaining and loads. especially at 15K initial – many firms offer 10K free servicing. As for the funds – buy stocks that pay dividends.

]]> By: Weekend Links - Things Aren’t Always What They Seem Edition http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-74233 Weekend Links - Things Aren’t Always What They Seem Edition Sun, 09 Mar 2008 19:03:34 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-74233 [...] Finance asks if 401Ks are a bad deal. This is a discussion of a CNN Money article that mirrors my 5 reasons to throw away your 401k article. The Money magazine article doesn’t seem to factor in freedom of investments. I still [...] [...] Finance asks if 401Ks are a bad deal. This is a discussion of a CNN Money article that mirrors my 5 reasons to throw away your 401k article. The Money magazine article doesn’t seem to factor in freedom of investments. I still [...]

]]> By: How to Get More of YOUR Money from Your Employer http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-51923 How to Get More of YOUR Money from Your Employer Mon, 04 Feb 2008 13:03:58 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-51923 [...] next change you can make is to lower the proportion going to your 401(k). You might be asking yourself why a finance guy would be telling you to lower your contribution rate. [...] [...] next change you can make is to lower the proportion going to your 401(k). You might be asking yourself why a finance guy would be telling you to lower your contribution rate. [...]

]]> By: Brian http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-34648 Brian Tue, 15 Jan 2008 03:46:13 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-34648 Here is another reason to forget about the 401K. I work for a Fortune 500 company off the bat. Not liking their current track record on their investments in the 401K optional funds I decided to take an early withdrawal (even with the 10% hit). They are trying to say I cannot touch my own money unless I retire or quit the company! Here is another reason to forget about the 401K. I work for a Fortune 500 company off the bat. Not liking their current track record on their investments in the 401K optional funds I decided to take an early withdrawal (even with the 10% hit). They are trying to say I cannot touch my own money unless I retire or quit the company!

]]> By: Investment Guru http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-3379 Investment Guru Wed, 28 Feb 2007 10:45:48 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-3379 I struggle with this all the time. I have the ability to consistently generate 25%-40% returns with my investments, and I sit there watching these fund managers get me a paltry 6%-10% and take huge fees for it. I really don't want to leave my company just to roll over the 401K to an IRA. I wish there were some law that allowed sophisticated investors to manage their own 401K funds. It is very frustrating to watch my other accounts grow and 3x to 4x the rate of the large lump sum in my 401K and I can't do anything to change it. I've even considered borrowing from my 401K to invest it, but even then I can only get out $50K and have to start paying it back right away. Does anyone know a a movement to force employers to allow people to choose their own investments in a 401K? I struggle with this all the time. I have the ability to consistently generate 25%-40% returns with my investments, and I sit there watching these fund managers get me a paltry 6%-10% and take huge fees for it. I really don’t want to leave my company just to roll over the 401K to an IRA. I wish there were some law that allowed sophisticated investors to manage their own 401K funds. It is very frustrating to watch my other accounts grow and 3x to 4x the rate of the large lump sum in my 401K and I can’t do anything to change it. I’ve even considered borrowing from my 401K to invest it, but even then I can only get out $50K and have to start paying it back right away. Does anyone know a a movement to force employers to allow people to choose their own investments in a 401K?

]]> By: mbhunter http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-3368 mbhunter Wed, 28 Feb 2007 05:11:15 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-3368 I'm leery of tax-advantaged accounts, mainly for reason #1. I get up to 4% of my salary matched so that offsets the risk a little, but I don't contribute beyond that. Another reason to be leery is that the rules governing the accounts can change. How about a 20% penalty for early withdrawal? No reason it can't happen. I’m leery of tax-advantaged accounts, mainly for reason #1. I get up to 4% of my salary matched so that offsets the risk a little, but I don’t contribute beyond that.

Another reason to be leery is that the rules governing the accounts can change. How about a 20% penalty for early withdrawal? No reason it can’t happen.

]]> By: Free Money Finance http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-3112 Free Money Finance Fri, 23 Feb 2007 11:21:34 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-3112 <strong>Star Money Articles for the Week of Feb. 19...</strong> Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: AllFinancialMatters wonders if anyone should use a credit counseling service. MightyBargainHunter got a great deal on wings. Five Cent Nickel details how to get... Star Money Articles for the Week of Feb. 19…

Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: AllFinancialMatters wonders if anyone should use a credit counseling service. MightyBargainHunter got a great deal on wings. Five Cent Nickel details how to get…

]]> By: So Why Aren’t You Opening A 401K? » Silicon Valley Blog About Money http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-3062 So Why Aren’t You Opening A 401K? » Silicon Valley Blog About Money Thu, 22 Feb 2007 18:24:42 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-3062 [...] as I mentioned earlier, there are other reasons for arguing against a 401K, particularly those touching on taxes. Let me tell you now that this won’t apply to our [...] [...] as I mentioned earlier, there are other reasons for arguing against a 401K, particularly those touching on taxes. Let me tell you now that this won’t apply to our [...]

]]> By: Posts I Enjoyed Last Week - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-2801 Posts I Enjoyed Last Week - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time Sun, 18 Feb 2007 21:02:51 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-2801 [...] how to invest in a 401(k) plan.  On the other end, Lazy man stirs quite some debates when he says he may want to dump his 401(k) plan. I know I won’t, for the reasons of 1) getting tax-deferred growth of distributions and 2) [...] [...] how to invest in a 401(k) plan.  On the other end, Lazy man stirs quite some debates when he says he may want to dump his 401(k) plan. I know I won’t, for the reasons of 1) getting tax-deferred growth of distributions and 2) [...]

]]> By: The Sunday Review #8 » Money, Matter, and More Musings http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-2783 The Sunday Review #8 » Money, Matter, and More Musings Sun, 18 Feb 2007 15:34:00 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-2783 [...] 5 Reasons to Throw Away Your 401K by Lazy Man @ Lazy Man and Money: An interesting numerical take on whether 401K is the only answer to retirement savings. Before you conclude anything from this article, you must read all the comments. On similar lines, read about what Jim @ Blueprint for Financial Prosperity has to say about Roth IRAs in his post Why Roth IRAs Are Bad. [...] [...] 5 Reasons to Throw Away Your 401K by Lazy Man @ Lazy Man and Money: An interesting numerical take on whether 401K is the only answer to retirement savings. Before you conclude anything from this article, you must read all the comments. On similar lines, read about what Jim @ Blueprint for Financial Prosperity has to say about Roth IRAs in his post Why Roth IRAs Are Bad. [...]

]]> By: Money Blog Articles Sick Week Edition, Carnival Of Money Stories » Silicon Valley Blog About Money http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/comment-page-1/#comment-2646 Money Blog Articles Sick Week Edition, Carnival Of Money Stories » Silicon Valley Blog About Money Fri, 16 Feb 2007 15:38:51 +0000 http://www.lazymanandmoney.com/5-reasons-to-throw-away-your-401k/#comment-2646 [...] tossing out your IRA for several reasons. And what do you know, Lazy Man @ Lazy Man And Money has also given reasons to toss that 401K! What, could our retirement accounts be [...] [...] tossing out your IRA for several reasons. And what do you know, Lazy Man @ Lazy Man And Money has also given reasons to toss that 401K! What, could our retirement accounts be [...]

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