1. 7 Reason why 401(k) Plans Fail the Average Retirement Saver:
1) They are ridiculously expensive. My clients are generally "Shocked" at how expensive these
plans are once we do our reviews and they see exactly what they are paying for their company's
401K offering.
2) They can access the money and often "save to spend" (And then be taxed for doing so)
3) The 401K was never meant to be the prime savings vehicle for the American work force. It
was meant to be at most a supplement to other company pensions and saving accounts
4) The advent of the 401K helped usher in the age and the disappearance of defined benefit
plans - you know, those things called "pensions". 401(k) plans are cheaper than pensions for
the employer. And corporate law made it easy for companies to drop their pension plans of the
401K
5) People don't necessarily stay at the same job for 30-40 years - so this creates opportunity to
access to the plan funds - even with taxes and penalties.
6) Credit Card debts and layoffs are an emotional reason to raid these accounts now either
through hardship withdrawals or loans.
7) They are voluntary plans and one can easily opt-out of them. That doesn't mean you
shouldn't participate in one. But, I always advise my client to participate in their company's 401K
only to extent that it is matched by your employer. Never more than that.
ALAS, there is hope. We can create a very inexpensive "Personal Pensions." We empower our
clients to take back their financial future in super low cost ways. Because, as we all know high
fees will decimate our saving and retirement plans
I will gladly review your 401K or any other account you may have free of charge.
Todd Morgan
Coastal Financial Partners group
310-966-0375