ChiefsPlanet - View Single Post - Life How prepared are you for retirement?

**DaneMcCloud** · 08-19-2012, 02:07 PM

I'll share some very personal information (which is normally against my personal policy) in hopes that it helps others.

We owned a business that did very, very well for us for nearly a decade. My wife was instructed by our CPA and Financial Adviser (at the time) to put the maximum amount in a two Uni 401k accounts (one for me and one for her) during the height of our revenues.

Well, in 2006, we lost a hefty amount in the market because the 401k earning were heavily invested in overseas mutual funds. In 2008, we lost more than half of our remaining value because of the crash. As of about two weeks ago, with the market at nearly 13,200, our value was about 60% of it was in 2008, before the crash. So, considering the likelihood of another crash, I cashed out. There is an immediate 20% Federal tax, a 12.5% tax and another 12.5% penalty (10% Fed, 2.5% Cali state), so essentially, 45% off the top.

I have a little less than 25% of the money that we had earned up until 2006. It ****ing sucks.

Furthermore, you have no control as to how your company invests your 401k retirement funds. They may take your $100 per month or paycheck or whatever and turn it over to some dumbass at Oppenheimer or TRowe Price or Edward Jones (THE ****ing worst) to invest in a "fund". That fund can and will likely lose money, so there is absolutely no guarantee that what you've put in will be there at age 59.5, which is the initial year you can begin withdrawing YOUR money without Federal & State penalties, not to mention taxes equal to your income bracket.

I'd much rather have my money, post tax, and invest as I see fit. Right now, the only thing I even feel comfortable doing with my cash are Tax Free Money Market accounts and CD's. Both are somewhere around .08% to 1%, which is ridiculously low, BUT, you won't lose your money when the market inevitably tanks again.

Personally, I think "Financial Advisers", like those that work at the aforementioned firms, are a scam. These are guys that, 99.9% of the time, are nothing more salesmen. They don't watch the market and they don't make the decisions. The "funds" they offer are set, managed and controlled by "The Home Office" and any REAL decisions come those people and not "your guy".

To get "real" financial advice, like those of successful money managers, you need $500k or more (and more likely, $2.5 million or more) and unfortunately, those guys don't work for "the little guy" who's investing $10k a year. At that point, you're at the mercy of the stock market, which could tank any day.

08-19-2012, 02:07 PM	#59
DaneMcCloud Supporter Join Date: Sep 2000 Location: Hollywood, CA Casino cash: $10053648	I'll share some very personal information (which is normally against my personal policy) in hopes that it helps others. We owned a business that did very, very well for us for nearly a decade. My wife was instructed by our CPA and Financial Adviser (at the time) to put the maximum amount in a two Uni 401k accounts (one for me and one for her) during the height of our revenues. Well, in 2006, we lost a hefty amount in the market because the 401k earning were heavily invested in overseas mutual funds. In 2008, we lost more than half of our remaining value because of the crash. As of about two weeks ago, with the market at nearly 13,200, our value was about 60% of it was in 2008, before the crash. So, considering the likelihood of another crash, I cashed out. There is an immediate 20% Federal tax, a 12.5% tax and another 12.5% penalty (10% Fed, 2.5% Cali state), so essentially, 45% off the top. I have a little less than 25% of the money that we had earned up until 2006. It **ing sucks. Furthermore, you have no control as to how your company invests your 401k retirement funds. They may take your $100 per month or paycheck or whatever and turn it over to some dumbass at Oppenheimer or TRowe Price or Edward Jones (THE **ing worst) to invest in a "fund". That fund can and will likely lose money, so there is absolutely no guarantee that what you've put in will be there at age 59.5, which is the initial year you can begin withdrawing YOUR money without Federal & State penalties, not to mention taxes equal to your income bracket. I'd much rather have my money, post tax, and invest as I see fit. Right now, the only thing I even feel comfortable doing with my cash are Tax Free Money Market accounts and CD's. Both are somewhere around .08% to 1%, which is ridiculously low, BUT, you won't lose your money when the market inevitably tanks again. Personally, I think "Financial Advisers", like those that work at the aforementioned firms, are a scam. These are guys that, 99.9% of the time, are nothing more salesmen. They don't watch the market and they don't make the decisions. The "funds" they offer are set, managed and controlled by "The Home Office" and any REAL decisions come those people and not "your guy". To get "real" financial advice, like those of successful money managers, you need $500k or more (and more likely, $2.5 million or more) and unfortunately, those guys don't work for "the little guy" who's investing $10k a year. At that point, you're at the mercy of the stock market, which could tank any day.
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