choices I mentioned in my previous post. And like I said, 401k's should be mandated to provide the full range of safe and fixed income alternatives. I don't get what's wrong with that?
Some 401k's charge high administrative fees. That should be illegal too.
On the other hand, most I think have a company match up to like 4 to 8% of salary. And they accumulate tax-deferred, with a tax deduction for the amount put in. (In a Roth 401k, there's no up front tax deferral, but they are tax free).
As a woman, the thing I hate most about my 401k and IRAs is that I have to ask my financial advisor for money, when I'm the one who earned that money!
It's been a long time since I had a 401k (I rolled it over into an IRA), but I could withdraw without talking to anybody. I could also reallocate to a guaranteed interest contract or fixed income alternatives. I'm surprised when some imply that 401k's allow only equity investments. I think that is very rare, and should be illegal. But for some people "401k" is synonymous with the stock market. I don't get where that meme comes from.
As for IRA's I don't have to talk to a financial advisor because I don't have one. I can allocate it to just about anything as I see fit, including bank savings accounts, FDIC-insured CD's, Treasury notes and bonds. (There are a few things one can't have in an IRA but those are all on the exotic high-risk end which I'm not interested in).
One reason I don't have a financial advisor is, among many other reasons, that they seem to think it is THEIR money. It's not of course, its my choice to move money contrary to advice. But it is irritating to listen to their lamentations and pushback when I want to do something else with my money.
My 401k and IRAs have lost almost $1million in the past 14 months due to stock market fluctuations. At my age there is likely not enough years left in my life to recoup that amount, especially since more stock market loss is expected.
Bond funds have also fallen almost as much as the S&P 500 since the start of 2022, so, unfortunately its not just stock market. I'm very sorry to hear about those extraordinary losses. As for equity portion, I invest in broad-based mutual funds, so they tend to do not much better and not much worse than the S&P 500 which is down 16.3% from its 1/3/22 all-time high, as of yesterday. I accept that for extraordinary returns over the long run, there is going to be an occasional pullback.
If I had lost nearly $1 million on a 16.3% pullback, that would mean I had nearly $6 million (which I don't).
However, I'm not an all-equity fanatic. Of my easily reinvestable assets, I'm about 60% equity and 40% fixed income. As for my non-reinvestable assets and income streams, such as my annuity and Social Security and my house, none are tied to the stock market (though my house's value fluctuates with the economy).
Don't tell me that 401ks and IRAs are not a ponzi scheme created by Congress for their Wall Street donors. If it isn't why won't Congress allow people to handle their own retirement accounts??
As I said, 401ks should allow all safe investment choices that I enumerated in my last post. I think they virtually all allow fixed income choices.
No one is forced to put money in a 401k or IRA. So if one doesn't like the restrictions, one is free to pass them by, last I've heard.
I've addressed the ponzi scheme b.s. in this forum innumerable times. The latest:
https://www.democraticunderground.com/111695035#post8
and this from Peter Lynch in 2001:
Since World War II, despite nine recessions and many other economic setbacks, corporate earnings are up 63 fold and the stock market is up 71 fold. Corporate profits per share have grown over 9% annually despite the down years. Nine percent may not sound like a lot but consider that it means that profits mathematically double every 8 years, quadruple every 16, are up 16 fold every 32 years, and are up 64 fold every 48 years."
I accept that sometimes after several doublings, there might be an occasional 50% pullback (there's been 3 of those since WWII). I see pullbacks as an opportunity to buy stocks on sale.
As for IRA's, one can invest in just about anything except some complex exotic choices, which is fine with me. I don't get how IRA's are bad. Particularly the Roth IRA - to me that's a free gift allowing one to put some of their money into a tax-free account. Not tax-deferred like a traditional IRA, but tax free.
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