Streams

Mandatory 401(k)s

Wednesday, March 09, 2011

Knight Kiplinger, editor in chief of Kiplinger's Personal Finance, The Kiplinger Letter and kiplinger.com, says it's time to require employers and employees to contribute to 401(k)s, as he states in his recent column at kiplinger.com.

Guests:

Knight Kiplinger

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Comments [36]

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I retired early before the big stock crash. It is harder to move your money when they start the BS talk. What I already lose to taxes is a serious hardship as it is. Wall Street pays politicians to suck our hard won monies from government coffers into the Wall Street money clipping machine. The NY State controller is charged with overseeing the investments of the NY state retirement system. Kiplinger advises lifestyle funds that have proven to be unreliable. Same with real estate or any sector that booms for a while. The gangster banks are going to steal it all. Names are displayed with all comments. We reserve the right to edit any comments posted on this site. Please read the Comment Guidelines before posting. For use in iTunes and mobile iPhone devices. Brian Lehrer delves into the issues and links them to real life.Hello gals, - for those of you who invest a few dollars to win a big jackpot: that is a cool web site that processes Canadian players and gives away 100% cash back casino bonus and 20$ no deposit casino bonus to every new player. They also feature blackjack, video poker, slot machines, roulette & other 300+ internet casino games available.
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Jul. 09 2011 10:29 PM
Karen from Westchester

Could your speakers comment on women - they live longer, how do they invest in IRA's if they are not working, not deductable if their husband is covered under a pension plan etc.

Mar. 14 2011 11:45 AM
Jennifer

"Not take it from them, but set it aside..." Does this guest understand that people don't trust the money managers? It may be misguided, but without government (read PUBLIC) oversight, there's EVERY reason to believe that mandatory 401k savings will only enrich the money managers, while leaving the workers high and dry when the day comes to cash in on their "investments."

Will the government be checking on the banks? Recent history suggests no.

Mar. 09 2011 08:00 PM
Jennifer

"Not take it from them, but set it aside..." Does this guest understand that people don't trust the money managers? It may be misguided, but without government (read PUBLIC) oversight, there's no reason to believe that mandatory 401k savings will only enrich the money managers, while leaving the workers high and dry when the day comes to cash in on their "investments."

Will the government be checking on the banks? Recent history suggests no.

Mar. 09 2011 07:57 PM
SharksnMinnows from New York, NY

Lois is right. 401K's are like the Gaming Industry now. It's a regulated Gaming industry, but loosely and not in the Novice or (public) players best interest. 401k'ers be wary of false profits.

Mar. 09 2011 05:38 PM
Louis from Bayside

Any money you invest in the financial markets is money you have to be willing to lose. My mother lost almost half her 401k during the last financial debacle. Making contributions to 401k's mandatory is like making gambling mandatory.

Plus you don't have access to the money! If you lose your job and your health you have to pay penalties to access the money.

Mar. 09 2011 05:08 PM

Remember Enron employees who lost all their 401k and pensions.
mr Kiplinger plan is only good for the wall street fund managers. I retired early before the big stock crash. i had both a pension plan and a 401k, i was offered an early retirement with a cash out or contractually, the annuity pension. I , like everybody else took the cash-out money and rolled it into my 401K, as far as i know that was my only option, or pay a big tax on the lump sum. Almost 100% of retiring employee's had done the same.
When the stock crash came, they lost more than half their total money,their 401k and the money rolled in. An IRA i opened 20 years ago, after 20 years i still had about $2000. The fund manager made money on it for 20 years,even though it never did well. Mistake-it was a family member who manged it.
Lesson #1 never have a friend or family mange your money. It is harder to move your money when they start the BS talk.
The Bernie Madoff and his imitators proved, no one ,except the guy in boston, had a clue on what was going on, including the almost always wrong Greenspan talking head.
As a telco employee who worked on the cables, in the final 10 years i always maxed out my FICA withholding.
Raise the FICA and stop the feds from stealing from the lock-box, and make them pay back what they stole/account for every dollar.

Mar. 09 2011 11:59 AM
sophia

A program with no risk and no middle-men is Social Security.
It doesn't guarantee a high return and nor would Mr. Kiplinger's corporate welfare scheme.

Mar. 09 2011 11:41 AM
Edward from NJ

I'm curious where all of the anti-mutual fund posters here would put money in order to save for their retirement? If you listened to the whole interview, Kiplinger is advocating index funds with sub-one-percent management fees. Is there some secret investment opportunity that you know of that yields a high return -- with no risk -- and doesn't benefit any financial middlemen? If so, I'd love hear about it.

Mar. 09 2011 11:14 AM

Mr. Kiplinger seems profoundly ignorant of the plight of low-income and marginal workers.

It's not that I don't know that I should be saving for retirement, or that I'm just too immature and short-sighted to do so. I'd love more than anything to be saving for retirement. I cannot afford to.

I live month-to-month on what I earn. What I already lose to taxes is a serious hardship as it is.

I DO have an IRA, which I started a while back when I had a small windfall, but haven't been able to add anything to it since then. The gigs I've been able to come by in the past year have paid barely living wages, and I've drained my small savings to stay on top of bills and rent.

Who is Mr. Kiplinger to say that I should be forced to choose saving for retirement over food and rent right now? Has he ever lived like this?

Mar. 09 2011 10:54 AM
Bradley

Mr. Lehrer, please invite Teresa Ghilarducci from New School University on your program to explain her solution to the retirement security crisis.

Mar. 09 2011 10:51 AM

Your guest is another paid shill for the Wall Street brokers! Get real! Social security WAS a forced pension plan run by the government, but unfortunately, government can be almost as corrupt as the Wall Street brokers. Not quite, but almost. Wall Street pays politicians to suck our hard won monies from government coffers into the Wall Street money clipping machine. The best thing would be if people could put away 10% of their incomes and turn it into gold, and bury it someplace safe.

Mar. 09 2011 10:50 AM
Valerie Verini from Westchester

The guest who bragged about the 3% employer contribution vested immediately is describing a classic safe harbor plan which allows the highly compensated to max out their contributions. He left out that part!!

Mar. 09 2011 10:50 AM

It's amazing that Knight just called a lack of faith in his wall st buddies, "an example if a hedonistic lifestyle choice."

Seriously? How can anybody say that and still be allowed to pontificate on financial wisdom?

Mar. 09 2011 10:50 AM
bob from queens

401Ks, IRAs are all ways to privatize the management of retirement--making money for the account managers regardless of how well the investments do.

yet another service industry that thrives on fees--not quite IBG/YBG--but of the same ilk.

Mar. 09 2011 10:49 AM
Amy from Manhattan

If employees are going to be required to contribute to 401(k)s, will they have any say in where the funds are invested? I'd want my money in socially responsible investments, & in fact, I once passed up a chance to have a high match from an employer because there was no such option.

Mar. 09 2011 10:48 AM
RLewis from the bowery

How many ways do we need to tell this guy that this is a terrible idea???

Aren't we supposed to be keeping govt out of our lives as per the republicans? This is just another big govt program.

Bad, bad, bad idea!

Mar. 09 2011 10:47 AM
Mike from Manhattan

The California teachers retirement fund is often mentioned as the one of the largest stock holders in the country. The NY State controller is charged with overseeing the investments of the NY state retirement system. Are these public systems NOT investing in stocks and bonds, as the guest says?

Mar. 09 2011 10:47 AM
Brad from Brooklyn

I wonder how many mutual fund managers are listening to Mr. Kiplinger and thinking, "Ka-ching!" With rare exceptions, fund managers take obscene fees out of the pockets of savers. Should the Kiplinger plan come to pass, you can bet the farm that Wall Street will be guaranteed a big cut.

Mar. 09 2011 10:46 AM
Barbara from Monmouth Beach

I've worked extensivley with public employee retirement plans in NYS and they are NOT based on future payments by taxpayers -- they are funded in advance. So is California. Unfortunately, what has happened is that many municipalities were "forgiven" their contributioins when the stock market was doing well and now have to do catch-up. Also, the big financial nut is HEALTH insurance for retirees -- the health insurance is not funded in advance.

Mar. 09 2011 10:45 AM

1st Mr. Kiplinger advises lifestyle funds that have proven to be unreliable.

He mentions index funds which is fine, but does not require no-load index funds (e.g., Vanguard, etc.) where all fees are as low as possible so that more money goes to the pensioner.

Without wages & salaries @ & hopefully above the true cost of living levels, Mr. Kiplinger's plan becomes another way for Wall ST to rob the poor & pay the rich.

I don't appreciate Brian's soft questioning. Tighter questioning would start poking holes in this Wall ST pitch

Mar. 09 2011 10:43 AM
Janet from Manhattan

Yes, a 401k and 403b are part of a diversified portfolio, and I'm in them myself, but unless they are FDIC-insured, they should never be mandatory.

Mar. 09 2011 10:43 AM
Rusty-dab

The guest would not like to see the government run this plan, just that it guarantee the profits to brokerage houses and fund managers.

Mar. 09 2011 10:41 AM
Steven J. Syrek from Washington Heights

How is this proposal different from the privatization of social security proposed during the Bush administration? Wasn't that a barely disguised way of transferring into the pockets of Wall Street brokers an enormous amount of the public's money? How would such a transfer be managed and regulated? How can we possibly trust them not to use this windfall for their own gain? These people have scruples? Oh, sure, force us all to have 401(k)s, and force us all to pay half a percent per contribution as a fee!

Mar. 09 2011 10:40 AM
TK from NYC

I am in my late 20's and contributing to my 401K with no match from my company. Due to cost-cutting measures, they recently stopped contributing their original 3% match. Money is tight right now, and I would like to know if contributing is still beneficial to me with no match?

Mar. 09 2011 10:40 AM
phil

There are many employed people in this economy who are barely managing a hand-to-mouth existence, people with out-of-work spouses, or whose salaries have been cut, who would like to set aside money for a 401K, but simply don't have the cash. retirement fund or rent.

Mar. 09 2011 10:39 AM

The American economy has grown at an average 3% a year over its history. Anyone that promises greater returns than 3% a year is speculating with your money. While at times there are new sectors that emerge, such as the computer and internet sectors of a decade or two ago, where speculative returns can be amazing for a while, say 10% or greater, those are going to crash eventually. Same with real estate or any sector that booms for a while. 3% is what the economy has grown at, and any promises greater than that come with downside risks, which when they hit can be painful.

Mar. 09 2011 10:39 AM
David from Queens

Rather then trusting a 401K/Mutual Fund with my money - a more reliable approach would be to continually throw it into the East River - it won't disappear as quickly and the hedge funds wont get it.

Mar. 09 2011 10:39 AM
Robert from NYC

Yeah? And if you don't want to contribute what does the government do to you? It's not in their control and you don't want to or can't contribute what does the govt do!!!??

Mar. 09 2011 10:38 AM
sophia

Lolol!

He doesn't want another "government program". He just wants the govt to force citizens into yet another situation where they will give a mandatory cut to the private sector and the benefits/profits will be privatized and the inevitable losses bourne by the taxpayer.

Mar. 09 2011 10:38 AM
RLewis from the bowery

Why are we even discussing this when the business community's lobbyist will shoot this down post haste? What makes this man think that big biz will ever let this see the light of day?

Mar. 09 2011 10:38 AM

Knight is lying his butt off, Social Security doesn't work the way he alleges. It IS a retirement savings plan, it's not supposed to be an investment plan, it's supposed to be trustworthy and stable.

This is just another scheme to get rid of Social Security, the most successful government program ever.

And the current monies don't go right up the door, often social security has run at a surplus. The only financial trouble it has, has been caused by folks like Kiplinger who've advocated raiding the social security trust fund to pay for crazy tax cuts and budget holes. We could fix that pretty easily, too. In fact, we could lower the retirement age, too. Kinda hard to work a job mopping floors when you're 65 years old.

Mar. 09 2011 10:37 AM
Martin Chuzzlewit from Manhattan

On the pledge issue, Brian.....Michael Barone, the political demographer, has a great piece today entitled "Why NPR Should Urge Congress to End its Subsidy" in the Washington Examiner.....and it's not because of NPR President Ron Schiller's recent anti-semitic statements asking for more "non-zionist " news organizations.
Sorry to be off topic, but there is no slot for this.

Mar. 09 2011 10:36 AM
Tracy from NYC

Hopefully we are talking about this being mandatory only for households earning over a certain amount--after taking into account the number of employed adults and dependent children.

Mar. 09 2011 10:22 AM
James from Los Cabos, Mexico

Anyone who puts their money into a 401K is a fool. The gangster banks are going to steal it all. Guaranteed! If it is made mandatory and you still pay in you should add "slave" and "cringing coward" to that description. People, get a life!

Mar. 09 2011 10:19 AM
luckily rich

OK, I'll bite -- how much per year contribution?

And, how would you compensate the professional money managers -- percentage of *gains* rather than just the amount managed? Right now 401Ks are far too biased against the investor for this idea to be humane.

Mar. 09 2011 08:37 AM

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