“The ugly truth, though, is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves,” stated Stephen Gandel of TIMEMagazinein an Oct. 19 article.
“From the end of 2007 to the end of March 2009, the average 401(k) balance fell 31 percent, according to Fidelity,” the articles states. “The Society of Professional Asset-Managers and Record Keepers says nearly 73 million Americans, or just under 50 percent of our working population, now have a 401(k). And we collectively pour more than $200 billion into these accounts each year. But retire rich? Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement.”
The article introduced the idea of “The 401(k) Alternative.” What most professionals are proposing is “a form of retirement insurance … send 6 percent of your check to a retirement-insurance provider … People should not have to shoulder the risk of a bad turn in the market,” according to the article.
I agree with most of what is said in the article. But, despite all the recent losses, I predict it will pale in comparison to the tax hit retirees will experience the day they begin withdrawing their money from their retirement plans because the government has a permanent tax lien on your 401(k)s.
One thing is certain: Future taxes will be going up. For this reason, I don't believe in an IRA or 401(k).
There are better ways to save and have tax-free income in retirement. For years I have recommended people place their money earmarked for retirement in instruments that are liquid, safe and earn a tax-free rate of return. I choose to put my savings in maximum-funded, tax-advantaged life insurance contracts.
The contracts are the only financial vehicles that, when properly structured and funded, allow a saver to accumulate money safely and tax-free, withdraw the money later tax-free and transfer money free of income taxes at death. This is allowed under sections of the Internal Revenue Code.
For the last several years, I have used a strategy called indexing. With this, your principal is protected and you don't lose when the market goes down. When the market goes up, you are credited whatever the index of your choice earns (like the S&P 500 Index), up to a cap, without your money actually being at risk in the market.
Based on what the S&P 500 actually did the last 25 to 30 years, an average annual crediting rate of 7 percent to 8 percent could have been realized, even recently.
For more information, contact Al Shapiro at (760) 431-1246 or [email protected].
“From the end of 2007 to the end of March 2009, the average 401(k) balance fell 31 percent, according to Fidelity,” the articles states. “The Society of Professional Asset-Managers and Record Keepers says nearly 73 million Americans, or just under 50 percent of our working population, now have a 401(k). And we collectively pour more than $200 billion into these accounts each year. But retire rich? Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement.”
The article introduced the idea of “The 401(k) Alternative.” What most professionals are proposing is “a form of retirement insurance … send 6 percent of your check to a retirement-insurance provider … People should not have to shoulder the risk of a bad turn in the market,” according to the article.
I agree with most of what is said in the article. But, despite all the recent losses, I predict it will pale in comparison to the tax hit retirees will experience the day they begin withdrawing their money from their retirement plans because the government has a permanent tax lien on your 401(k)s.
One thing is certain: Future taxes will be going up. For this reason, I don't believe in an IRA or 401(k).
There are better ways to save and have tax-free income in retirement. For years I have recommended people place their money earmarked for retirement in instruments that are liquid, safe and earn a tax-free rate of return. I choose to put my savings in maximum-funded, tax-advantaged life insurance contracts.
The contracts are the only financial vehicles that, when properly structured and funded, allow a saver to accumulate money safely and tax-free, withdraw the money later tax-free and transfer money free of income taxes at death. This is allowed under sections of the Internal Revenue Code.
For the last several years, I have used a strategy called indexing. With this, your principal is protected and you don't lose when the market goes down. When the market goes up, you are credited whatever the index of your choice earns (like the S&P 500 Index), up to a cap, without your money actually being at risk in the market.
Based on what the S&P 500 actually did the last 25 to 30 years, an average annual crediting rate of 7 percent to 8 percent could have been realized, even recently.
For more information, contact Al Shapiro at (760) 431-1246 or [email protected].
La Costa neighborhood newsletter gets a new name
Andy Lee, owner of Print Zone and long-time resident of La Costa, has changed the name and format of his magazine-style La Costa Canyon Neighborhood News after two years. The newly renamed La Costa Breeze is now a tabloid-size publication with a circulation that jumped from 2,000 to 9,000 homes surrounding La Costa Resort and Spa and the Four Seasons Aviara Resort.
The La Costa Breeze now features more in-depth reporting and provides articles of interest to the community on a bi-monthly basis. Many of the newsletter's advertisers have been with the publication since inception and the current issue boasts a 95 percent advertiser renewal rate. For more information, visit www.lacostabreeze.com or call (760) 635-9100.
Andy Lee, owner of Print Zone and long-time resident of La Costa, has changed the name and format of his magazine-style La Costa Canyon Neighborhood News after two years. The newly renamed La Costa Breeze is now a tabloid-size publication with a circulation that jumped from 2,000 to 9,000 homes surrounding La Costa Resort and Spa and the Four Seasons Aviara Resort.
The La Costa Breeze now features more in-depth reporting and provides articles of interest to the community on a bi-monthly basis. Many of the newsletter's advertisers have been with the publication since inception and the current issue boasts a 95 percent advertiser renewal rate. For more information, visit www.lacostabreeze.com or call (760) 635-9100.