In 401k dilemma we show 401k investing and how it has changed the retirement market. Before the 401k was the pension plan. But, if we look at the 401k vs pensions the question becomes clearer, the 401k puts the risk of retirement squarely on your shoulders. When we look at 401k fees and all the risk that is involved with a 401k our dilemma becomes clear. Many people do not account for the taxes they will have to pay. For instance, if you are about to retire with 1 million dollars in your 401k, you may be surprised when that, after taxes, comes out to around 700k. No matter what the actual number is many people do not plan and account for taxes, which are a big part of the 401k. In order for us to fully understand the 401k and what it is doing for us in our retirement we need to understand what our actual value is. To get a better idea of how much money you will have for your retirement send me an email at dan at daniel-thompson.com. "The 401k Dilemma Let’s talk for just a minute about the 401k. Probably most of you, and I’m guessing a lot of you, have a 401k with your employer. Do you know about the 401k’s origin? Before the 401k there was a little benefit called the Pension. A pension technically is called a defined benefit plan. What that meant is that the employer would define the benefit you would get during retirement based on income and your years of service. Upon retirement the employer essentially would purchase a lifetime income annuity for you that paid a monthly benefit based on those benefits promised. The problem was employers waited, delayed, and put off funding those plans so many of them are under water and cannot provide the benefit they promised. In 1974 ERISA allowed for employers to create defined contribution plans. The difference is significant. Remember a defined benefit plan promised to pay the employee a specified income stream based on salary and years of service. These plans were also fully funded by the employer. A defined contribution plan, on the other hand, simply promised to put in so much money into an account for the employee. That’s it. How it’s managed, the overall return, and the risk was put solely upon the employee. Employers were out from under the burden of providing income from a defined benefit plan for retirees by putting in a percentage of their income into what is now called a 401k or a defined contribution plan. So why the history lesson on retirement plans? For one, I don’t think most employees have any idea the risk that has been placed upon him or her to provide for their own retirement. It’s all on you. There are a few things against you. First is fees and expenses inside these plans. ... -------------------------------------------------------------- Please Subscribe! https://www.youtube.com/channel/UCNtQmqZlNUwzPuWmHPI_oSg?sub_confirmation=1 Visit me on the web- http://WiseMoneyTools.com/ Follow me! FB - https://www.facebook.com/wisemoneytools Twitter - https://twitter.com/wisemoneytools Google+ - https://plus.google.com/114367619155241197052 I have been involved in financial planning for over 30 years. I started out as a high volume stock broker. After working with millions of dollars I decided there had to be another way for people to earn money in the market without all the risky ups and downs that leave you where you started, or worse. After reading a ton of books I came across a book on the Infinite Banking Concept and it completely changed my life and the way I view investments. Now I focus on building wealth in safe and predictable ways, like Infinite Banking, Cash Value Life Insurance, and Indexed Annuities to name a few. I post videos regularly so if you have any questions of comments feel free to email them to... dan at wisemoneytools dot com
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Duration: 5m 28s
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