The 401k Sucks

[OfficePants]

We're getting fucked beyond belief.

Do you know that if you earn an average of 7% a year return and pay a 2% fee on that fund that you're going to lose 2/3 of what your return would have been?

Basically, most of your retirement goes into the pocket of someone else.

Discuss.

 

[OfficePants]

Is this something above and beyond a fund's normal expense fee?? 2% seems high for most domestic funds.

Yes. 2% seems high, that's what you think -its normal. This shit has gotten so opaque you can't tell anymore. They have hidden fee after hidden fee, almost all funds collect more than what they claim.

 

[OfficePants]

Watch this:

http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

Transcript:

http://www.pbs.org/wgbh/pages/front...ncial-crisis/retirement-gamble/transcript-43/

 

[OfficePants]

I take a loan out on my 401k and then put the $ in an IRA and SEP IRA and invest it myself. I'm paying interest back to myself in the 401k and then do the same the following year. Basically this allows me to skim it out so I don't pay fees.

 

[ter1413]

I take a loan out on my 401k and then put the $ in an IRA and SEP IRA and invest it myself. I'm paying interest back to myself in the 401k and then do the same the following year. Basically this allows me to skim it out so I don't pay fees.

:goodpost:

 

[OfficePants]

Actually that's not at all a bad idea.

You run your own show or are you a weaksauce "partner" type in a firm? If you're a real man then you can contribute up to 25% of your gross revenue into a SEP IRA.

 

[OfficePants]

Do you have a side business? This only really works if you do since the IRA limit is 5k. 5k is better than nothing, but you get it.