How 401(k) Fees Are Costing You 33% of Your Nest Egg
If you have a 401(k) chances are you're getting ripped off and you don't even know it.
With all of the associated 401(k) fees, the truth is you could be losing as much as 33% of your retirement nest egg to the financial advisors who run your plan.
Typically, these fees are completely buried in your 401(k) statement– and even if you do manage to find out how much they are, the fees won't seem like much at first glance.
But overtime, the fees can literally cost you a small fortune.
How Ben Bernanke Is Destroying Your Retirement
Uncle Sam has an unfunded pension liability of $800 billion.
Corporate pension funds have an unfunded liability around $400 billion.
State and local pension funds have an unfunded liability in the tony neighborhood of $3 trillion.
That's over $4 TRILLION in UNFUNDED pension funds.
And if you're not lucky enough to be in a "defined benefit" pension plan (which fewer and fewer people are these days) there's undoubtedly an "unfunded liability" in your own savings – in other words, you haven't saved enough to retire.
It's a huge problem and it's getting worse. And there's one individual to blame for all that $4.2-plus trillion of money we need to find – Ben Bernanke.
Obama Turns America's Retirement Dreams into Nightmares
If you think the U.S. government will not – or cannot – seize your money the way the government in Cyprus is doing, check out page 18 of the President's Proposed Fiscal Year 2014 Budget of the U.S. Government.
That's exactly what he intends to do.
Not years from now. Not decades from now.
This is organized crime on an incomprehensible scale and, if it passes, it will be legal, too.
How to Find the Best Sources of Retirement Income
Yields on most of today's fixed-income investments are at or near historic lows.
Money market funds are generating little if any return. Certificates of deposit aren't doing too much better.
Even 10-year Treasury bonds are only yielding around 1.75%. A slow recovery, ongoing debt problems in Europe and uncertainty about future economic growth have sent many investors rushing to the safety of Treasury bonds, driving down yields.
And the problem isn't going to get better anytime soon. In mid-September, the U.S. Federal Reserve Bank announced its latest round of "quantitative easing" or QE3. Designed to stimulate the economy, the move is expected to keep interest rates low through at least the middle of 2015.
This is a dangerous environment for those searching for sources of retirement income.
Low Rates Kill Retirement Income
Low interest rates are a problem for virtually all investors, but are particularly troublesome for retirees, who need their assets to generate income to supplement Social Security and private pensions to help pay for day-to-day living expenses.
This is just another obstacle facing Americans, who have already not saved enough, in assuring themselves a secure retirement.
According to the Employee Benefit Research Institute 2012 Retirement Confidence Survey, only 14% of workers say they are "very confident" that they have saved enough money to live comfortably in their retirement years.
While part of the problem is due to simply not setting aside enough money, the difficulties are compounded by the changing retirement landscape. A generation ago, our parents and grandparents depended on Social Security, a private pension and a small nest egg to pay for retirement.
Not so today.
According to an ING retirement survey, Retirement Across the Ages, only about 47% of those over age 65 are receiving payments from a traditional pension plan. For younger workers, that number drops significantly. And the promise of receiving a significant amount of money from Social Security weakens with each passing year.
That means that people who are retired today, or those who plan to retire soon, need the money they have accumulated in 401(k) plans, IRAs and private savings to work even harder for them. Otherwise, they risk not having enough assets to fund a retirement that could last for 20 to 30 years or more.
DRIPs: How to Invest in Dividend Reinvestment Plans
The real secret to long-term investing success is income – and with stocks, that means dividends.
Numerous studies, both academic and financial, have found dividends accounted for more than 60% of total U.S. stock market returns since 1870.
More recently, a study by Ned Davis Research covering the period from 1972 through 2008 found that dividend-paying stocks provided an annual return of 7.6% versus a mere 0.2% for non-dividend-paying shares.
What's more, companies with a record of steadily raising their dividends returned an even more impressive 8.6%.
But if you really want to boost your returns, investing in DRIPs – dividend reinvestment plans –is a safe, steady road to building true wealth.
Before Making That 2011 IRA Contribution, Make Sure Your Pension Plan Assets are Safe
The middle of April is fast approaching and everyone knows what that means – time to get those 2011 income tax returns filled out and filed.
What few people realize is that they also have until Monday, April 16, to open a new individual retirement account (IRA) for 2011 or make your annual contribution to an existing one.
With the limit for contributions this year set at $5,000 – or $6,000 for those over age 50 – putting cash in a regular or Roth IRA can shave a big chunk off your personal tax bill.
In addition, this year you may also be eligible for a special "Savers Credit" of up to $1,000 for contributions to either an IRA or an employer-sponsored retirement plan.
I like getting added deductions or credits for putting my money in my retirement plan, if only because I'm a big fan of giving the government the least amount of cash I can legally get away with.
I can't, however, say whether such contributions are right for you – your accountant or tax adviser will have to help you with that decision.
What I can say is this…
If you do put money in a pension plan, whether self-directed through a custodial agent or via an employer-sponsored plan, make sure you know exactly where your money is going – and who's really managing it once it gets there.
The Safe, Sure Road to a Golden Retirement
It has been called the "royal road to riches."
Starting with just $10,000 and a small monthly contribution, any investor can use this method to create their own golden parachute – a million-dollar retirement portfolio.
All you need is time.
Time. That is something nobody seems to have anymore – or really appreciate.
But at 48 years old, I understand how 30 years can slip by in an instant. It may seem like forever, but it's not.
Instead, today it's all about the fast money. In the market, out of the market… this stock, that stock. Nobody has the patience to ride out the rough spots anymore.
However, there is one thing that never changes in the investment world: When you buy solid companies and reinvest the dividends you can build true wealth.
The best part is you'll never have to rely on Social Security to fund your golden years.
Of course, seasoned income investors have known this for years. That's why the truly rich don't spend their days glued to the financial news.
In this style of investing, less truly is more.
Because the biggest factor behind this well-worn strategy is time itself and time never fails.
The Most Powerful Investment Strategy of All-Time
The secret to this approach is in the compounding effect that Albert Einstein once called "the most powerful force on earth."
It's the safe, sure road. And anybody who tries it can become a millionaire if they are smart enough to stick with it.
In fact, this force is so powerful that I think the government is deliberately keeping it from you.
I say that because if the masses actually knew the income this compounding approach could deliver, they would immediately demand an end to Social Security as we know it.
Why is that? you ask. To continue reading, please click here….