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CoronitaParticipant401k, like social security, is a pyramid scheme. it depends on constant, unceasing growth.
a small percentage of the population own a majority of the wealth. your 401k is influenced by the financial decisions of a small minority of people.
the financial markets are not free and efficient. they are manipulated by the likes of banks, hedge funds and even the federal reserve.
there's no safety in foreign markets or commodities. all assets are open for manipulation, speculation and crisis.
retirement. the whole reason for the existence of the 401k is itself a threat to the 401k. growth in the stock market correlates with the creation of the 401k in the early eighties. retirement of the boomers who are followed up by the less numerous and less wealthy gen x are going to drain the money invested into the markets right back out. whether the rate of extraction exceeds the rate of capital influx is to be seen, but that's a significant risk that's glossed over by 401k pushers.
401k is a panacea to most people. by using contrarian "logic", a la buying what no one else wants or housing is a bubble because your neighbor's dog just bought a house, 401k's should at least be criticized and carefully weighed.
401k's are tax deferred, not tax exempt. big difference and the rate of taxation in the future may change, your income in the future may make tax deferment moot.
401k's have grown because of the ease of investment. that passivity of people has allowed markets to grow unregulated, unchecked and unrestricted. financial services are one of the biggest industries in the country because more people are investing. and yet, people are not generally being active in their fund management, they are letting things ride and they are assuming the best. it's seems to me that that is exactly the most dangerous time to be involved with something.
Drunkle, mind if I ask
1) what do you do for a living?
2) what are you doing in lieu of a 401k?
CoronitaParticipant401k, like social security, is a pyramid scheme. it depends on constant, unceasing growth.
a small percentage of the population own a majority of the wealth. your 401k is influenced by the financial decisions of a small minority of people.
the financial markets are not free and efficient. they are manipulated by the likes of banks, hedge funds and even the federal reserve.
there's no safety in foreign markets or commodities. all assets are open for manipulation, speculation and crisis.
retirement. the whole reason for the existence of the 401k is itself a threat to the 401k. growth in the stock market correlates with the creation of the 401k in the early eighties. retirement of the boomers who are followed up by the less numerous and less wealthy gen x are going to drain the money invested into the markets right back out. whether the rate of extraction exceeds the rate of capital influx is to be seen, but that's a significant risk that's glossed over by 401k pushers.
401k is a panacea to most people. by using contrarian "logic", a la buying what no one else wants or housing is a bubble because your neighbor's dog just bought a house, 401k's should at least be criticized and carefully weighed.
401k's are tax deferred, not tax exempt. big difference and the rate of taxation in the future may change, your income in the future may make tax deferment moot.
401k's have grown because of the ease of investment. that passivity of people has allowed markets to grow unregulated, unchecked and unrestricted. financial services are one of the biggest industries in the country because more people are investing. and yet, people are not generally being active in their fund management, they are letting things ride and they are assuming the best. it's seems to me that that is exactly the most dangerous time to be involved with something.
Drunkle, mind if I ask
1) what do you do for a living?
2) what are you doing in lieu of a 401k?
CoronitaParticipant401k, like social security, is a pyramid scheme. it depends on constant, unceasing growth.
a small percentage of the population own a majority of the wealth. your 401k is influenced by the financial decisions of a small minority of people.
the financial markets are not free and efficient. they are manipulated by the likes of banks, hedge funds and even the federal reserve.
there's no safety in foreign markets or commodities. all assets are open for manipulation, speculation and crisis.
retirement. the whole reason for the existence of the 401k is itself a threat to the 401k. growth in the stock market correlates with the creation of the 401k in the early eighties. retirement of the boomers who are followed up by the less numerous and less wealthy gen x are going to drain the money invested into the markets right back out. whether the rate of extraction exceeds the rate of capital influx is to be seen, but that's a significant risk that's glossed over by 401k pushers.
401k is a panacea to most people. by using contrarian "logic", a la buying what no one else wants or housing is a bubble because your neighbor's dog just bought a house, 401k's should at least be criticized and carefully weighed.
401k's are tax deferred, not tax exempt. big difference and the rate of taxation in the future may change, your income in the future may make tax deferment moot.
401k's have grown because of the ease of investment. that passivity of people has allowed markets to grow unregulated, unchecked and unrestricted. financial services are one of the biggest industries in the country because more people are investing. and yet, people are not generally being active in their fund management, they are letting things ride and they are assuming the best. it's seems to me that that is exactly the most dangerous time to be involved with something.
Drunkle, mind if I ask
1) what do you do for a living?
2) what are you doing in lieu of a 401k?
CoronitaParticipant401k, like social security, is a pyramid scheme. it depends on constant, unceasing growth.
a small percentage of the population own a majority of the wealth. your 401k is influenced by the financial decisions of a small minority of people.
the financial markets are not free and efficient. they are manipulated by the likes of banks, hedge funds and even the federal reserve.
there's no safety in foreign markets or commodities. all assets are open for manipulation, speculation and crisis.
retirement. the whole reason for the existence of the 401k is itself a threat to the 401k. growth in the stock market correlates with the creation of the 401k in the early eighties. retirement of the boomers who are followed up by the less numerous and less wealthy gen x are going to drain the money invested into the markets right back out. whether the rate of extraction exceeds the rate of capital influx is to be seen, but that's a significant risk that's glossed over by 401k pushers.
401k is a panacea to most people. by using contrarian "logic", a la buying what no one else wants or housing is a bubble because your neighbor's dog just bought a house, 401k's should at least be criticized and carefully weighed.
401k's are tax deferred, not tax exempt. big difference and the rate of taxation in the future may change, your income in the future may make tax deferment moot.
401k's have grown because of the ease of investment. that passivity of people has allowed markets to grow unregulated, unchecked and unrestricted. financial services are one of the biggest industries in the country because more people are investing. and yet, people are not generally being active in their fund management, they are letting things ride and they are assuming the best. it's seems to me that that is exactly the most dangerous time to be involved with something.
Drunkle, mind if I ask
1) what do you do for a living?
2) what are you doing in lieu of a 401k?
CoronitaParticipantFLU, generally speaking, it's better to rollover your 401k into a rollover IRA when you leave the company and then convert it to a ROTH IRA if you can handle the tax, than leaving it in a 401k. The reason why I say this is because you have much more options to invest in an IRA vs a 401k. For every fund type you chose in your 401k, I'm sure there are better performing one out there in the same category. The reason I say convert it to ROTH is because the $ you make will be tax free. Base on your past 11 years, that's a large amount of $ that would be tax free. I'm with you though on the point of automatic contribution. That's the easiest way to accumulate $ for the future with very little thinking involve. You tend to spend less too when you see that you have less in your savings/checking.
I guess I'm old fashion in this regards. I view having a vast area of fund selection a double edge sword. Yes, you have the ability to pick funds that are better than indexes. But at the same time you have the ability to pick funds that perform worse than the market. I don't have data, but I would guess most average people would end out doing doing just about the same as the market (being they probably are right and wrong roughly the same number of times over a long period of time). For example ,401k plans have boundaries on what can and can't be included in a plan. Perhaps it filters out a lot of good performing fund, but I would assume it also filters out a lot of poor performing funds.
Also, what I'm going to do when I have free time is figure out what my approximate tax rate was each year for the past 11 years, and figure out if I had done an after tax contribution to say a Roth (either through conversion or direct contribution), what the difference would be. This isn't entirely fair because Roth was relatively new, and roth contributions were limited to a some amount if you make above a certain amount. But for this exercise, I'll assume those limits don't exist. I think it's also a more fair comparison if you use a pre-tax amount to a 401k to match with an after tax amount to a Roth. For example putting $15k into a 401k isn't exactly fair comparison to putting $15k to a Roth. I think you need to figure out what the tax adjusted amount of $15k would be for your particular case each year. But what do I know about crunching these numbers..
CoronitaParticipantFLU, generally speaking, it's better to rollover your 401k into a rollover IRA when you leave the company and then convert it to a ROTH IRA if you can handle the tax, than leaving it in a 401k. The reason why I say this is because you have much more options to invest in an IRA vs a 401k. For every fund type you chose in your 401k, I'm sure there are better performing one out there in the same category. The reason I say convert it to ROTH is because the $ you make will be tax free. Base on your past 11 years, that's a large amount of $ that would be tax free. I'm with you though on the point of automatic contribution. That's the easiest way to accumulate $ for the future with very little thinking involve. You tend to spend less too when you see that you have less in your savings/checking.
I guess I'm old fashion in this regards. I view having a vast area of fund selection a double edge sword. Yes, you have the ability to pick funds that are better than indexes. But at the same time you have the ability to pick funds that perform worse than the market. I don't have data, but I would guess most average people would end out doing doing just about the same as the market (being they probably are right and wrong roughly the same number of times over a long period of time). For example ,401k plans have boundaries on what can and can't be included in a plan. Perhaps it filters out a lot of good performing fund, but I would assume it also filters out a lot of poor performing funds.
Also, what I'm going to do when I have free time is figure out what my approximate tax rate was each year for the past 11 years, and figure out if I had done an after tax contribution to say a Roth (either through conversion or direct contribution), what the difference would be. This isn't entirely fair because Roth was relatively new, and roth contributions were limited to a some amount if you make above a certain amount. But for this exercise, I'll assume those limits don't exist. I think it's also a more fair comparison if you use a pre-tax amount to a 401k to match with an after tax amount to a Roth. For example putting $15k into a 401k isn't exactly fair comparison to putting $15k to a Roth. I think you need to figure out what the tax adjusted amount of $15k would be for your particular case each year. But what do I know about crunching these numbers..
CoronitaParticipantFLU, generally speaking, it's better to rollover your 401k into a rollover IRA when you leave the company and then convert it to a ROTH IRA if you can handle the tax, than leaving it in a 401k. The reason why I say this is because you have much more options to invest in an IRA vs a 401k. For every fund type you chose in your 401k, I'm sure there are better performing one out there in the same category. The reason I say convert it to ROTH is because the $ you make will be tax free. Base on your past 11 years, that's a large amount of $ that would be tax free. I'm with you though on the point of automatic contribution. That's the easiest way to accumulate $ for the future with very little thinking involve. You tend to spend less too when you see that you have less in your savings/checking.
I guess I'm old fashion in this regards. I view having a vast area of fund selection a double edge sword. Yes, you have the ability to pick funds that are better than indexes. But at the same time you have the ability to pick funds that perform worse than the market. I don't have data, but I would guess most average people would end out doing doing just about the same as the market (being they probably are right and wrong roughly the same number of times over a long period of time). For example ,401k plans have boundaries on what can and can't be included in a plan. Perhaps it filters out a lot of good performing fund, but I would assume it also filters out a lot of poor performing funds.
Also, what I'm going to do when I have free time is figure out what my approximate tax rate was each year for the past 11 years, and figure out if I had done an after tax contribution to say a Roth (either through conversion or direct contribution), what the difference would be. This isn't entirely fair because Roth was relatively new, and roth contributions were limited to a some amount if you make above a certain amount. But for this exercise, I'll assume those limits don't exist. I think it's also a more fair comparison if you use a pre-tax amount to a 401k to match with an after tax amount to a Roth. For example putting $15k into a 401k isn't exactly fair comparison to putting $15k to a Roth. I think you need to figure out what the tax adjusted amount of $15k would be for your particular case each year. But what do I know about crunching these numbers..
CoronitaParticipantFLU, generally speaking, it's better to rollover your 401k into a rollover IRA when you leave the company and then convert it to a ROTH IRA if you can handle the tax, than leaving it in a 401k. The reason why I say this is because you have much more options to invest in an IRA vs a 401k. For every fund type you chose in your 401k, I'm sure there are better performing one out there in the same category. The reason I say convert it to ROTH is because the $ you make will be tax free. Base on your past 11 years, that's a large amount of $ that would be tax free. I'm with you though on the point of automatic contribution. That's the easiest way to accumulate $ for the future with very little thinking involve. You tend to spend less too when you see that you have less in your savings/checking.
I guess I'm old fashion in this regards. I view having a vast area of fund selection a double edge sword. Yes, you have the ability to pick funds that are better than indexes. But at the same time you have the ability to pick funds that perform worse than the market. I don't have data, but I would guess most average people would end out doing doing just about the same as the market (being they probably are right and wrong roughly the same number of times over a long period of time). For example ,401k plans have boundaries on what can and can't be included in a plan. Perhaps it filters out a lot of good performing fund, but I would assume it also filters out a lot of poor performing funds.
Also, what I'm going to do when I have free time is figure out what my approximate tax rate was each year for the past 11 years, and figure out if I had done an after tax contribution to say a Roth (either through conversion or direct contribution), what the difference would be. This isn't entirely fair because Roth was relatively new, and roth contributions were limited to a some amount if you make above a certain amount. But for this exercise, I'll assume those limits don't exist. I think it's also a more fair comparison if you use a pre-tax amount to a 401k to match with an after tax amount to a Roth. For example putting $15k into a 401k isn't exactly fair comparison to putting $15k to a Roth. I think you need to figure out what the tax adjusted amount of $15k would be for your particular case each year. But what do I know about crunching these numbers..
CoronitaParticipantFLU, generally speaking, it's better to rollover your 401k into a rollover IRA when you leave the company and then convert it to a ROTH IRA if you can handle the tax, than leaving it in a 401k. The reason why I say this is because you have much more options to invest in an IRA vs a 401k. For every fund type you chose in your 401k, I'm sure there are better performing one out there in the same category. The reason I say convert it to ROTH is because the $ you make will be tax free. Base on your past 11 years, that's a large amount of $ that would be tax free. I'm with you though on the point of automatic contribution. That's the easiest way to accumulate $ for the future with very little thinking involve. You tend to spend less too when you see that you have less in your savings/checking.
I guess I'm old fashion in this regards. I view having a vast area of fund selection a double edge sword. Yes, you have the ability to pick funds that are better than indexes. But at the same time you have the ability to pick funds that perform worse than the market. I don't have data, but I would guess most average people would end out doing doing just about the same as the market (being they probably are right and wrong roughly the same number of times over a long period of time). For example ,401k plans have boundaries on what can and can't be included in a plan. Perhaps it filters out a lot of good performing fund, but I would assume it also filters out a lot of poor performing funds.
Also, what I'm going to do when I have free time is figure out what my approximate tax rate was each year for the past 11 years, and figure out if I had done an after tax contribution to say a Roth (either through conversion or direct contribution), what the difference would be. This isn't entirely fair because Roth was relatively new, and roth contributions were limited to a some amount if you make above a certain amount. But for this exercise, I'll assume those limits don't exist. I think it's also a more fair comparison if you use a pre-tax amount to a 401k to match with an after tax amount to a Roth. For example putting $15k into a 401k isn't exactly fair comparison to putting $15k to a Roth. I think you need to figure out what the tax adjusted amount of $15k would be for your particular case each year. But what do I know about crunching these numbers..
CoronitaParticipantI'm not trying to pick an argument here, I'm but I'll admit I'm trying hard to understand how people over a long period think that 401ks are a bad idea and are so concerned about losing money in a 401k versus a self-managed account, even if they just banked on index funds/bonds/international diversified, and how they would do better if they just contributed to an after tax account that gave them
Aside from the raw performance (or lack there of ) of fund selections outside a 401k plan, how often would most people have the discipline to regularly contribute to an account? Also, even if you do select funds yourself in an after tax account that does a few percents better than your companies 401k plan, aren't you paying a pretty hefty amount in taxes from dividends/cap gains/distributions in an after tax-account?
Again, not trying to argue here. But if you are one of the people that chose to not participate in a 401k but rather invested in an after-tax account. could you post some data to allow me to see what your effective return really was over say a 10 year period?
I can post some of my own data here, as needed if someone(s) are willing to participate in this.
Roughly, I started working in 96, and have maxed out every year on 401k, and switched companies several times.While a few employers matched up to a small amount, most didn't match. Also, being that i switched so many times, I didn't get to keep most of the company's matching. In all cases, I still have the original 401k accounts from each employer, since above a certain amount you aren't required to rollout (at least my ex-employers). So as a reference point, I maxed out 401k contributions from 1996 to now. Using the maximum contribution tables below:
2007 15,500
2006 $15,000
2005 $14,000
2004 $13,000
2003 $12,000
2002 $11,000
2001 $10,500
2000 $10,500
1999 $10,000
1998 $10,000
1997 $ 9,500
1996 $ 9,500This is a total of $140.5k of contributions.The current value is $240k, including $20k that I'm taking out related to employer match. Ok, so I know the returns aren't that great over 11 years, but this includes the period of dot.bomb bust and the market corrections that are going on right now. And the only thing I did was to divide my contributions into the standard large cap/mid cap/small cap/bond and fixed income/international (index when possible), staying away from specialty funds like "tech funds", "gold/silver"(grrrr). (I did do some of these specialities in non-401k accounts, but I'm not counting them here). Oh, and occasionally rebalancing among the mixes (like right now, I'm slightly more heavy on the international than domestic).
Yes, I know some of you think these returns suck, but these 401k accounts for me are suppose to be more conservative in my portfolio.
Can someone who is over average financial capability who choose not to participate in a 401k plan for the past 10-11years but instead deposited that net taxed amount each year to either an after-tax account and/or IRA provide some insight into how you did? I'm mainly interested in the people who have average financial capabilities (not someone who trades for a living). Professional traders, please excuse yourself from posting. I understand if you are a financial guru and can make a living trading why you might be inclined to "do it yourself". But I would think that most people aren't "pro" (including me), and I'm mainly looking for the average person with reasonably financial intelligence to post some numbers going the other non-401k route.
Please be honest. I'm not trying to "eball" here. i really would like to get some information about the pros and cons of 401k in real world examples. If you don't feel comfortable using absolute numbers, feel free to post percentages (provided you are honest about them). Also ,if you could, provide a rough detail of your asset distribution (type of funds-don't need to be specific).
Again, I'm more curious about finding the true answer than being right or wrong here. If there is sufficient data to suggest the possibility of being better off outside of a 401k, I definitely would be open to it.
CoronitaParticipantI'm not trying to pick an argument here, I'm but I'll admit I'm trying hard to understand how people over a long period think that 401ks are a bad idea and are so concerned about losing money in a 401k versus a self-managed account, even if they just banked on index funds/bonds/international diversified, and how they would do better if they just contributed to an after tax account that gave them
Aside from the raw performance (or lack there of ) of fund selections outside a 401k plan, how often would most people have the discipline to regularly contribute to an account? Also, even if you do select funds yourself in an after tax account that does a few percents better than your companies 401k plan, aren't you paying a pretty hefty amount in taxes from dividends/cap gains/distributions in an after tax-account?
Again, not trying to argue here. But if you are one of the people that chose to not participate in a 401k but rather invested in an after-tax account. could you post some data to allow me to see what your effective return really was over say a 10 year period?
I can post some of my own data here, as needed if someone(s) are willing to participate in this.
Roughly, I started working in 96, and have maxed out every year on 401k, and switched companies several times.While a few employers matched up to a small amount, most didn't match. Also, being that i switched so many times, I didn't get to keep most of the company's matching. In all cases, I still have the original 401k accounts from each employer, since above a certain amount you aren't required to rollout (at least my ex-employers). So as a reference point, I maxed out 401k contributions from 1996 to now. Using the maximum contribution tables below:
2007 15,500
2006 $15,000
2005 $14,000
2004 $13,000
2003 $12,000
2002 $11,000
2001 $10,500
2000 $10,500
1999 $10,000
1998 $10,000
1997 $ 9,500
1996 $ 9,500This is a total of $140.5k of contributions.The current value is $240k, including $20k that I'm taking out related to employer match. Ok, so I know the returns aren't that great over 11 years, but this includes the period of dot.bomb bust and the market corrections that are going on right now. And the only thing I did was to divide my contributions into the standard large cap/mid cap/small cap/bond and fixed income/international (index when possible), staying away from specialty funds like "tech funds", "gold/silver"(grrrr). (I did do some of these specialities in non-401k accounts, but I'm not counting them here). Oh, and occasionally rebalancing among the mixes (like right now, I'm slightly more heavy on the international than domestic).
Yes, I know some of you think these returns suck, but these 401k accounts for me are suppose to be more conservative in my portfolio.
Can someone who is over average financial capability who choose not to participate in a 401k plan for the past 10-11years but instead deposited that net taxed amount each year to either an after-tax account and/or IRA provide some insight into how you did? I'm mainly interested in the people who have average financial capabilities (not someone who trades for a living). Professional traders, please excuse yourself from posting. I understand if you are a financial guru and can make a living trading why you might be inclined to "do it yourself". But I would think that most people aren't "pro" (including me), and I'm mainly looking for the average person with reasonably financial intelligence to post some numbers going the other non-401k route.
Please be honest. I'm not trying to "eball" here. i really would like to get some information about the pros and cons of 401k in real world examples. If you don't feel comfortable using absolute numbers, feel free to post percentages (provided you are honest about them). Also ,if you could, provide a rough detail of your asset distribution (type of funds-don't need to be specific).
Again, I'm more curious about finding the true answer than being right or wrong here. If there is sufficient data to suggest the possibility of being better off outside of a 401k, I definitely would be open to it.
CoronitaParticipantI'm not trying to pick an argument here, I'm but I'll admit I'm trying hard to understand how people over a long period think that 401ks are a bad idea and are so concerned about losing money in a 401k versus a self-managed account, even if they just banked on index funds/bonds/international diversified, and how they would do better if they just contributed to an after tax account that gave them
Aside from the raw performance (or lack there of ) of fund selections outside a 401k plan, how often would most people have the discipline to regularly contribute to an account? Also, even if you do select funds yourself in an after tax account that does a few percents better than your companies 401k plan, aren't you paying a pretty hefty amount in taxes from dividends/cap gains/distributions in an after tax-account?
Again, not trying to argue here. But if you are one of the people that chose to not participate in a 401k but rather invested in an after-tax account. could you post some data to allow me to see what your effective return really was over say a 10 year period?
I can post some of my own data here, as needed if someone(s) are willing to participate in this.
Roughly, I started working in 96, and have maxed out every year on 401k, and switched companies several times.While a few employers matched up to a small amount, most didn't match. Also, being that i switched so many times, I didn't get to keep most of the company's matching. In all cases, I still have the original 401k accounts from each employer, since above a certain amount you aren't required to rollout (at least my ex-employers). So as a reference point, I maxed out 401k contributions from 1996 to now. Using the maximum contribution tables below:
2007 15,500
2006 $15,000
2005 $14,000
2004 $13,000
2003 $12,000
2002 $11,000
2001 $10,500
2000 $10,500
1999 $10,000
1998 $10,000
1997 $ 9,500
1996 $ 9,500This is a total of $140.5k of contributions.The current value is $240k, including $20k that I'm taking out related to employer match. Ok, so I know the returns aren't that great over 11 years, but this includes the period of dot.bomb bust and the market corrections that are going on right now. And the only thing I did was to divide my contributions into the standard large cap/mid cap/small cap/bond and fixed income/international (index when possible), staying away from specialty funds like "tech funds", "gold/silver"(grrrr). (I did do some of these specialities in non-401k accounts, but I'm not counting them here). Oh, and occasionally rebalancing among the mixes (like right now, I'm slightly more heavy on the international than domestic).
Yes, I know some of you think these returns suck, but these 401k accounts for me are suppose to be more conservative in my portfolio.
Can someone who is over average financial capability who choose not to participate in a 401k plan for the past 10-11years but instead deposited that net taxed amount each year to either an after-tax account and/or IRA provide some insight into how you did? I'm mainly interested in the people who have average financial capabilities (not someone who trades for a living). Professional traders, please excuse yourself from posting. I understand if you are a financial guru and can make a living trading why you might be inclined to "do it yourself". But I would think that most people aren't "pro" (including me), and I'm mainly looking for the average person with reasonably financial intelligence to post some numbers going the other non-401k route.
Please be honest. I'm not trying to "eball" here. i really would like to get some information about the pros and cons of 401k in real world examples. If you don't feel comfortable using absolute numbers, feel free to post percentages (provided you are honest about them). Also ,if you could, provide a rough detail of your asset distribution (type of funds-don't need to be specific).
Again, I'm more curious about finding the true answer than being right or wrong here. If there is sufficient data to suggest the possibility of being better off outside of a 401k, I definitely would be open to it.
CoronitaParticipantI'm not trying to pick an argument here, I'm but I'll admit I'm trying hard to understand how people over a long period think that 401ks are a bad idea and are so concerned about losing money in a 401k versus a self-managed account, even if they just banked on index funds/bonds/international diversified, and how they would do better if they just contributed to an after tax account that gave them
Aside from the raw performance (or lack there of ) of fund selections outside a 401k plan, how often would most people have the discipline to regularly contribute to an account? Also, even if you do select funds yourself in an after tax account that does a few percents better than your companies 401k plan, aren't you paying a pretty hefty amount in taxes from dividends/cap gains/distributions in an after tax-account?
Again, not trying to argue here. But if you are one of the people that chose to not participate in a 401k but rather invested in an after-tax account. could you post some data to allow me to see what your effective return really was over say a 10 year period?
I can post some of my own data here, as needed if someone(s) are willing to participate in this.
Roughly, I started working in 96, and have maxed out every year on 401k, and switched companies several times.While a few employers matched up to a small amount, most didn't match. Also, being that i switched so many times, I didn't get to keep most of the company's matching. In all cases, I still have the original 401k accounts from each employer, since above a certain amount you aren't required to rollout (at least my ex-employers). So as a reference point, I maxed out 401k contributions from 1996 to now. Using the maximum contribution tables below:
2007 15,500
2006 $15,000
2005 $14,000
2004 $13,000
2003 $12,000
2002 $11,000
2001 $10,500
2000 $10,500
1999 $10,000
1998 $10,000
1997 $ 9,500
1996 $ 9,500This is a total of $140.5k of contributions.The current value is $240k, including $20k that I'm taking out related to employer match. Ok, so I know the returns aren't that great over 11 years, but this includes the period of dot.bomb bust and the market corrections that are going on right now. And the only thing I did was to divide my contributions into the standard large cap/mid cap/small cap/bond and fixed income/international (index when possible), staying away from specialty funds like "tech funds", "gold/silver"(grrrr). (I did do some of these specialities in non-401k accounts, but I'm not counting them here). Oh, and occasionally rebalancing among the mixes (like right now, I'm slightly more heavy on the international than domestic).
Yes, I know some of you think these returns suck, but these 401k accounts for me are suppose to be more conservative in my portfolio.
Can someone who is over average financial capability who choose not to participate in a 401k plan for the past 10-11years but instead deposited that net taxed amount each year to either an after-tax account and/or IRA provide some insight into how you did? I'm mainly interested in the people who have average financial capabilities (not someone who trades for a living). Professional traders, please excuse yourself from posting. I understand if you are a financial guru and can make a living trading why you might be inclined to "do it yourself". But I would think that most people aren't "pro" (including me), and I'm mainly looking for the average person with reasonably financial intelligence to post some numbers going the other non-401k route.
Please be honest. I'm not trying to "eball" here. i really would like to get some information about the pros and cons of 401k in real world examples. If you don't feel comfortable using absolute numbers, feel free to post percentages (provided you are honest about them). Also ,if you could, provide a rough detail of your asset distribution (type of funds-don't need to be specific).
Again, I'm more curious about finding the true answer than being right or wrong here. If there is sufficient data to suggest the possibility of being better off outside of a 401k, I definitely would be open to it.
CoronitaParticipantI'm not trying to pick an argument here, I'm but I'll admit I'm trying hard to understand how people over a long period think that 401ks are a bad idea and are so concerned about losing money in a 401k versus a self-managed account, even if they just banked on index funds/bonds/international diversified, and how they would do better if they just contributed to an after tax account that gave them
Aside from the raw performance (or lack there of ) of fund selections outside a 401k plan, how often would most people have the discipline to regularly contribute to an account? Also, even if you do select funds yourself in an after tax account that does a few percents better than your companies 401k plan, aren't you paying a pretty hefty amount in taxes from dividends/cap gains/distributions in an after tax-account?
Again, not trying to argue here. But if you are one of the people that chose to not participate in a 401k but rather invested in an after-tax account. could you post some data to allow me to see what your effective return really was over say a 10 year period?
I can post some of my own data here, as needed if someone(s) are willing to participate in this.
Roughly, I started working in 96, and have maxed out every year on 401k, and switched companies several times.While a few employers matched up to a small amount, most didn't match. Also, being that i switched so many times, I didn't get to keep most of the company's matching. In all cases, I still have the original 401k accounts from each employer, since above a certain amount you aren't required to rollout (at least my ex-employers). So as a reference point, I maxed out 401k contributions from 1996 to now. Using the maximum contribution tables below:
2007 15,500
2006 $15,000
2005 $14,000
2004 $13,000
2003 $12,000
2002 $11,000
2001 $10,500
2000 $10,500
1999 $10,000
1998 $10,000
1997 $ 9,500
1996 $ 9,500This is a total of $140.5k of contributions.The current value is $240k, including $20k that I'm taking out related to employer match. Ok, so I know the returns aren't that great over 11 years, but this includes the period of dot.bomb bust and the market corrections that are going on right now. And the only thing I did was to divide my contributions into the standard large cap/mid cap/small cap/bond and fixed income/international (index when possible), staying away from specialty funds like "tech funds", "gold/silver"(grrrr). (I did do some of these specialities in non-401k accounts, but I'm not counting them here). Oh, and occasionally rebalancing among the mixes (like right now, I'm slightly more heavy on the international than domestic).
Yes, I know some of you think these returns suck, but these 401k accounts for me are suppose to be more conservative in my portfolio.
Can someone who is over average financial capability who choose not to participate in a 401k plan for the past 10-11years but instead deposited that net taxed amount each year to either an after-tax account and/or IRA provide some insight into how you did? I'm mainly interested in the people who have average financial capabilities (not someone who trades for a living). Professional traders, please excuse yourself from posting. I understand if you are a financial guru and can make a living trading why you might be inclined to "do it yourself". But I would think that most people aren't "pro" (including me), and I'm mainly looking for the average person with reasonably financial intelligence to post some numbers going the other non-401k route.
Please be honest. I'm not trying to "eball" here. i really would like to get some information about the pros and cons of 401k in real world examples. If you don't feel comfortable using absolute numbers, feel free to post percentages (provided you are honest about them). Also ,if you could, provide a rough detail of your asset distribution (type of funds-don't need to be specific).
Again, I'm more curious about finding the true answer than being right or wrong here. If there is sufficient data to suggest the possibility of being better off outside of a 401k, I definitely would be open to it.
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