Welcome to Outrageous Economic Shorts, the reader's digest of economic horror. Below are studies, facts and figures that should be enough to make your hair curl. Unfortunately information like this pops up every week. Yet read it and weep, here's some of the latest.
Retirement is something most of us don't like to think about. It is not due to aging and fear of death. Instead, most of us are just scraping by, if that, and our retirement funds do not exist. Out of sight, out of mind is a way to deal with the deathly fear of having absolutely no money to take care of ourselves with in old age.
Representative George Miller is waging a lonely war against powerful enemies. He's trying to reform the 401(k) system, a system that most on Wall Street don't want reformed.
The key to Miller's plan is to force 401(k) providers to disclose their fees in plain English. If you don't think this is important, consider that those fees can eat up 75% of your potential retirement savings.
If you look at the system, basically what you have is working families making the conscious decision every month to try to save some money for retirement. Then along comes people managing those funds for them and they start dipping into those funds for fees that are really not in the best interest of those savers. So, you have elite financial managers getting rich off the back of middle-class working people. The last thing they really want is transparency.
"The 401(k) system today in the United States has been an acknowledged failure."
- Alicia Munnell, director of the Center for Retirement Research at Boston College's Carroll School of Management.
For those of you who are familiar with my writing, you've probably seen me use the term "Wall Street exists to separate you from your money."
It occurred to me the other day that I need to justify that opinion. Therefore here is a partial list of reasons why you should keep your money out of the hands of the Wall Street crooks and banksters. This article will not encompass every way that Wall Street steals from average people like you and me, but it might inform you of a few ways that you may not have been aware of.
As the old saying goes, "Forwarned is forearmed."
So without further delay, here's a list of ways that you are being robbed, day after day, year after year.
In the news and the blogs there have been a series of reports, valid or not, that the world is looking at a global economic downturn of significant proportions. While this maybe true or not, one thing to note is more Americans control their own retirement accounts and are subject to choice and market conditions. Are we setting up an economy of fear? Riding the wave of emotional sentiment when your retirement future is bouncing on a VIX 100 foot wave fear and uncertainty sea is no way to build a secure social safety net.
"The 401(k) will turn out to be the greatest systemic financial hoax ever perpetrated on an unsuspecting public."
- William Wollman, The Great 401(k) Hoax
Like most people I was told to plow as much money into my 401k as possible. So like millions of other workers out there, I did as I was told. By 2003 I had accumulated a nice little nest egg...that I couldn't touch.
Then one day I was in a bookstore and I happened across a book called The Coming Generational Storm. What I read about 401k's that day made me immediately stop all contributions.
Since then I came to realize that the 401k model is hopelessly flawed and will lead an entire generation to despair.
Author Laurence J. Kotlikoff made two points that were simply too logical for me to ignore:
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