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Thread: My 401K. It's a scam.

  1. #1
    hasmat's Avatar
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    My 401K. It's a scam.

    I have a 401K from a previous employer. They switched plan managers and never notified me. Instead of being in stocks, where there might be the smallest chance of me getting some of that $85billion, per month minimum, of monopoly money that the fed will charge me for anyway, they did nothing with my $$$.

    Not quite. They did see fit to deduct a dollar a month from my plan, for doing nothing except using my $$$ tax free, and leveraged it probably 100:1 so they could get richer by gambling in the stock market.

    Not only that, by cashing it out, I have to pay 20% to the feds, still report it as income (get taxed on it again) and also pay a fee (25%) to the "fund" for them to write me a check.


    What a scam. Wait till MYRA comes around and you are forced to buy worthless .gov bonds.
    If you have one of these pieces of shit, get rid of it. Take back your consent and invest the $$$, your $$$, in something useful.

    These fucking things pay less than the true inflation rate. Suck my balls, banker bitchez.
    Last edited by hasmat; 10-02-14 at 05:53 PM.

  2. #2
    Mongoose's Avatar
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    If you want to preserve the tax deferred status, an institution-to-institution transfer is best because you never actually receive the money and don’t incur tax liability. The major brokerages make it fairly easy to do this as they want your money too. The enemy here is inertia, which has cost me as well.

    The 401k plans are actually worse than described due to hidden fees such as record keeping and administrative fees, averaging as much as 1.33 % of assets annually. A change in the disclosure rules required them to disclose these fees, but as usual they are obscured under a pile of manure:
    Is 401(k) Fee Disclosure A Boondoggle? | Bankrate.com

  3. #3
    hasmat's Avatar
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    Yeah. The issue is that I'm letting these fucks use my money to assfuck me.

    And, as you said, "you never receive the money". I'm starting to think that's their plan.

    I'll cash it in and buy seeds, bullets and silver. At least that way they can't use it.

    I withdraw my consent (which was never freely given).

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    Mongoose's Avatar
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    Quote Originally Posted by hasmat View Post
    And, as you said, "you never receive the money". I'm starting to think that's their plan.
    401ks are designed to convert real money into fairy gold; it magically appears on your statements, but as soon as you reach for it . . . .

  5. #5
    TheDisgruntledGentleman's Avatar
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    The only money that goes into my 401k is what my company pays in due to it's profit sharing scheme. The rest goes into the 3Bs.

    I absolutely guarantee, that if social security is still around when I retire, it will be means tested and the more I save (or, more succinctly, the more that .gov knows that I have saved), will mean I will get less out of social security than the dipshits who spent their money on hookers and coke and saved fuck all.

    I mean shit, we're even beyond the point of stashing FRNs under your mattress because they are just printed ad nauseum!

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    juicemoney's Avatar
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    I avoid any form of government sanctioned "tax shelter" for this reason. I'm happier paying the tax upfront and deciding what I want to do with my own damn money.

    In Canada we have RRSPs, TFSAs and RESPs with equally stupid restrictions.

    I'd rather store my nest egg in a country that doesn't submit to any draconian reporting laws thank you very much.

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    unplugged's Avatar
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    Quote Originally Posted by Mongoose View Post
    If you want to preserve the tax deferred status, an institution-to-institution transfer is best because you never actually receive the money and don’t incur tax liability. The major brokerages make it fairly easy to do this as they want your money too.
    AKA, a Rollover IRA. I've made the same mistake of cashing out my 401k and got hit with a 60% penalty fee in my early 20's and used the money to pay for my education. Wise decision on my part instead of wasting it on frivolous shit.

    I did learn from my mistake and read a lot of books about investing. I agree with hasmat that 401K's are a sham. They suck the money out of people that are clueless about how fund managers make their money through commissions and hidden fees. Mongoose also pointed out they do not disclose the fees because they're making billions and they're protected by greedy politicians through campaign contributions.

    When you sign up for your 401k fund, they will sign you up in their "Diversified Growth Portfolio" which usually means multiple managed loaded funds with high expense ratios. Loaded funds are mutual funds that comes with a sales charge or commission that the investor, YOU, pays up front. If the fund manager wants to make more money for himself so he can bring cupcake to Paris, he'll just buy and sell the same shares as many times as he wants to create more fees and commissions. This is called burn-and-churn.

    I'm not a financial advisor by any means so please take my advice with a grain of salt. The only fund that is somewhat immune to this is index funds. My employer matches 50 cents on the dollar so I just contribute up to the max and invest in only the S&P 500 index because the expense ratios are less than 1%, it's the only index fund my 401k offers, and the buy and sell transactions are miniscule compared to loaded funds. The rest, I max out my ROTH IRA where it's diversified 50/50 in foreign/domestic and small/ large cap index funds. If US economy goes to the toilet, my foreign index funds usually makes up the difference.

    I used to invest 50% of my gross income and since taking the red pill, it's around 10%. It's because I came to realization that my time is finite on earth and I'd rather enjoy my life now by spending money on my hobbies (guns, martial arts, and gardening) and vacations while I'm not in a wheelchair. Hobbies can be an investment. Other things I'm worried about are the means test that TDG pointed out, or gov just seizing my retirement out right. I believe it's in the early stages with MyRA.

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    I think in a few years you may have a situation where the government starts mandating that a percentage (say 10%) of your private IRA has to be in the lolMyRA account. The MyRA is going to take your money because the return will be beneath inflation. Not a single person on this board should take a MyRA, it's the exact same thing as a Roth IRA, but the only thing you can buy is federal debt in the ponzi pyramid. If you have an IRA I would consider cashing it out. Myself? I'll get a MyRA as soon as it's that law that 100% of each senator's retirement account has to be in MyRA.

    Or if your ex wife calls you asking about investment advice... Steer her towards MyRA.

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    unplugged's Avatar
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    Quote Originally Posted by Cicero View Post
    I think in a few years you may have a situation where the government starts mandating that a percentage (say 10%) of your private IRA has to be in the lolMyRA account.
    and freezing passports for people with over 100k in retirement. It's the frog soup scenario. The second this happens, I'm cashing out and leaving Amurika.

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