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Subscribe to RSSWith most retirement accounts battered and bruised by the financial turbulence of the past few years, many of us could use some helpful advice on how to stash away more money for our twilight years.
Mary Beth Franklin, senior editor at Kiplinger's Personal Finance, appeared on CNBC Thursday offering three simple changes to a 401(k) plan that she says can double (yes double) your prospective nest egg. Click below for the video:
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If you are already contributing the max to your 401k how can you put in more. Also most plans are not well diversified so that you can split your choices. I had 5 different mutual funds that all claimed to be different from each other and they all had about 60% of the same stocks. Even a European fund had mostly American companies. lastly working longer is difficult for some people to do. I have a friend who is a construction worker, and at 50 he already has a bad back. What will he do at 67?
Mary Beth - are you SERIOUS? Someone PAYS YOU to offer advice like that? If I were you, I'd be polishing up my resume and looking for another job. Sounds a lot like the typical Obama speech - pretty words, lofty ideas - NO SUBSTANCE. Most people with 401(k)'s do have IQ's above 50, Mary Beth. Good thing I'm not your boss, 'cause you'd be out of a job. The CNBC folks asked you to be more specific (eh Barack?) and you couldn't do it. Plus - I find it disturbing that everyone's turning a blind eye to the coming government debt and U.S. dollar crises right around the corner. This is not a 'down market cycle.' The economy is evolving -- not going through a cycle. You are a typical money pundit that can't see past next month's statement. Do yourself and the rest of us a favor -- buy a farm, and STAY THERE. Give your advice to the chickens....they'll give the attention it merits.
That was hilarious ! I decided not to even view the video based on your review
Solidpiwo, you couldn't be more right! I was thinking the exact same thing! I could give better advice than that, and certainly be more specific. Maybe she was afraid that she would get sued if she gave any specifics that later turned out to cause a 401(k) participant to lose money. More likely, she's full of crap and doesn't know what she's talking about :-) Wow! The crap they put on the internet on supposedly reputable sites...
Wow, shes an idiot and you find a way to take shots at the President.
Wow. Deep Advice Lady. Up your contributions and work longer. Really? Really? They pay you for this? I just wasted 3 minutes of my life on this sage advice?
Looks to me, Like she has the working till your 70 part allready.
Comment as you may, but personally my 401k has a return over last year-to-date (just checked) of 16.78%. 70% of my money is in aggressive stocks (large cap, venture funds, euro stock) and 30% in conservative.
And what did it do the year before?
Mine's not quite as good, but it's still got a positive return YTD as well. As for those deriding this lady for her advice - most of them are pissed because they didn't take it when they should've, and now they're up crap creek without a paddle.
To whoever posted the video: I need to be able to read the text. Where is it? I want a reply from cnbc.
Good luck depending on those "employer match" 401(k)s. Or even finding such a "liberal" employer. (A nonsequiter if there ever was one). Too many employers stole or abandoned defined benefit pension funds in the 80s & 90s and too many are now not matching the match. NB, you chump employees, of any age: The average 401(k), after 10 to 20 years with same employer (isn't that a hoot) is just a tad over $40,000. Scammed and work 'til you drop dead. Mary Beth, you oughta be ashamed, but somehow I know shame isn't in your shill's DNA. Even Krudlow was a little incredulous !
The average is only 40K because most people don't put much in and many cash it out when they change jobs. Only like 5% contribute the maximum amount and many of them are people on the verge of retirement who suddenly realized they never saved enough. The vast majority barely put in enough cash to get the employer match. That doesn't mean the system is broken. It just shows how people aren't utilizing it.
This was real dumb advice. My IRA is worth less today than it was on March 24, 2000 despite 10 years of yield and maximum deposits. The 2001 recession wiped it down 36%. The S&P index was 1527 on March 24, 2000, today it is 1125; can you not do the math? As long as Ben Benneke at the Federal Reserve micromanages the economy with 0% interest yields and the government spends money they don't have, we will never have a healthy growing economy. Those companies and people who actually participate in the economy do not feel safe to expand or invest, not knowing what the government is going to do to them.
My biggest problem with this article is the title. It is misleading and bogus. It should be "Three easy ways to boost your 401(k), if you are under 45 and an idiot".
Even an idiot with a 401(k) knows the more you put in, the more it will be worth when you retire, at least in theory.
I agree with FOGRAT, the video was an absolute waist of time; the advice was worthless and if Ms Franklin is the senior editor for Kiplingers, rest assured I will not waist any of my money on their publications, I'll just put it in my 401(k).
Oh, and for E.G.-137685, my 401(k) is fairly average, a little more than 20 years old with the same employer and has a boat load more than $40,000 in it...
I think that 40K figure may just be the average for 401K accounts and not the average person's 401k balance. Many people have lots of 401ks from all the jobs they've had. I personally have three. Taking that into account would tend to boost the average balance significantly, but since the median household wealth in this country is only like 100K and many jobs don't even offer a 401k its pretty clear there's a lot of people in this country who are setting themselves up for a retirement paid for almost totally with social security checks.
That's three worthless minutes of my life I'll never get back.
Solidpiwo, you couldn't be more right! I was thinking the exact same thing! I could give better advice than that, and certainly be more specific. Maybe she was afraid that she would get sued if she gave any specifics that later turned out to cause a 401(k) participant to lose money. More likely, she's full of crap and doesn't know what she's talking about :-) Wow! The crap they put on the internet on supposedly reputable sites...
I'm very disappointed in some of the comments, some of you are very self-centered. Most of you with the negative comments already knew the editors points and suggestions, many of your co-workers do not. After just under 10 years of contributions, today I have over 200 thousand in my 401K, so I know what I am talking about. I already knew her 3 suggestions, but I think everybody should know. Teach your friends and coworkers or else they will be living poorly in the future off your taxes.
1. Contribute more - Many of my coworkers don't put anything in their 401K. Anything is better than nothing. Some employers match contributions, mine matches 3% of my salary) The max contribution is 16,500 this year, so that's what I put in. Tell your employer to take out whatever percentage per week you can live with. (Max is $21,500 if you're over 50 - I'm not)
2. Don't be too conservative, have a good portfolio mix. Now many people are afraid of stocks - Be not afraid, it always comes back - (I think it has averaged at least 8% in any 10 year period). If the stock market went to zero (impossible anyway), money would be worth nothing and would be the least of your worries - basic survival would be the greatest. Just don't put all your eggs into guaranteed money (ie money market, GIC, Treasury bills) which will make you about 3%. If you're more than 5-10 years away from retirement, most of your 401K should be in various stock (one old adage for percentage is the result of 100 minus your age, I think you should put in as much as you can feel comfortable with.
3. Plan to work 2 years longer to age 67. This is good advice if you didn't plan for the future cause you have more years for your money to make money and to add to your 401K. If I had 2 more years to contribute and 200 thousand (although I'm 36), at 8% interest, at 67 I would have an additional $67, 600 ($33,000 of additional contributions and $34,600 in investment interest) Total of $267,600 at age 67 instead of $200,000 at age 65.
Just be nicer to people and pass on some of your knowledge. You don't have to listen to me but we'll be in a better country if you did. :)