Is the 401K Plan a form of welfare for Wall Street?

[javelin]

The United Campaign is a basket of charities designed to encompass all organizations, some good, some very bad and just there to make money and give nothing at all to the poor and helpless.

That is how I feel about the 401K plan, it was set up by the master minds of Wall Street to get rid of Social Security. It is exactly the same as the United Campaign, a basket of Wall Street firms, some make money but others make nothing at all, they are just there to reap the wealth of people forced into 401K plans.

Here is a tidbit to think about, many factories have went to other countries where the labor is cheaper, so the American worker that has a 401K plan actually supports the lose of his/her job to move overseas to become more profitable. The more Americans that loose their jobs the better for the 401K plans, with other nations investing in the stock market it really doesn't matter if Americans invest in American companies. We have created a monster.

[baldguy]

1. Yes. They've given speculators access to billions of dollars they wouldn't have had access to before

And have taken those billions away from the middle class.

[PassingFair]

2. Yes. It provides a "bottom" for the stock market.

A spring board for the "investor class".

When enough Americans lose their jobs and
are FORCED to live off of their 401K savings
(what's left of them), the whole thing will
crumble.

Unless...as you say, other nations are
conned into funneling their "savings"
into it.

[javelin]

3. Two other points.

Civil Service employees used to be covered under their own civil service retirement system, later Social Security was added because too many people were complaining that civil service handled Social Security but they were not covered themselves.

Now civil service employees are under the FERS plan. You got it the 401K plan.

Military retirees had their own retirement they two were switched over to the 401K plan.

Yes I agree, when the market tanks ALL Americans will take a hit.

The Americans are generally not gamblers with their money. They were happy with their savings accounts and C.D.'s well Ben Bernacke took care of that. He has interest rates at zero with his thumb on it. The goal, I even heard it on t.v.,FORCE people to buy stock.

[DeschutesRiver]

11. Yes, and esp. that last paragraph about safe investments at zero now

Although I am not certain they will attain their goal of forcing people to buy stock - that is what I also think they are hoping will happen, and am surprised they are being so bold as to state it out loud.

I was reading up on other historically bad financial times, and came across the comment that some people were willing to accept negative returns on investments in treasuries during those times, rather than continue to lose their shirts on stocks and other things. I know there have been a few negative prints already in the last year for short term treasuries.

Bernacke can hold to zero all he likes; I am not budging. I would be losing so much more by betting the money I've scrimped and saved as a self employed, no guaranteed pension person on our stock market, which is acting more like a casino than an investment vehicle for the moment. I have had a few of those negative print one month treasuries, or .17 returns on the three month. Yes, it sucks. But what would have sucked more is to have lost 40-60% of my retirement, which is what has happened to a lot of people in the last couple of years.

I am lucky I never had a 401k to use for retirement, because at least with our IRAs the only person I had to argue with re what to invest in during bad times was a stubborn broker who doesn't make money on Ts or CDs, and I can make them do what I need done. Much less freedom to protect your money with 401ks, which were absolutely used as bottomless money pits for the wall street top and middle to make endless money off of over the years, while depleting people's retirement unconscionably when things went wrong. What they've done to people's 401k and pensions is a crime.

There are no guarantees, but I am one of those Americans who isn't a gambler, and understand that little return or no return or a negative return in modest amounts is still money ahead of losing over 50% of it in a highly volatile time for the stock market. I am just playing the stupid hand I am being dealt on this.

[barb162]

4. Yes, it's a monster.

The corporations didn't like pensions and high paid American workers. So they got rid of both for the last 20-30 years all under the watchful (not) eyes of the various presidents and congresses over these years. Everything is upside down these days, isn't it?

[roamer65]

5. More a result of corporations offloading pension liabilities...

than a subsidy. Corporations were already putting money into funds under pension plans, but why do that when you can dump the cost off onto the workers?:sarcasm:

[leftofthedial]

6. classic wealth redistribution up.

a linchpin of the repuke-banker-corporate war on the middle class.

[Blue Meany]

7. I have long supected that this was the purpose...

Many plans give you very little freedom in how you invest; you have to invest in mutual funds and other products of their creation rather than in individual stocks. I have done very well on individual stock choices that I have made, using common sense about the direction of the overall economy. But I have eaten it big time on managed funds and have to pay management fees for the losses that these "experts" have brought.

[dixiegrrrrl]

8. One could invest a retirement fund with very little management fees

Say a Vanguard Mutual Fund...
But there certainly were 100 times more "active investment managers" looking to grab your 401 to
invest it for you at a premium price.

What is quite shocking to me is I know very smart people who STILL have their retirement funds in the stock market with companies like Schwab AND who think they will be able to reitre on a good income in a couple of years !!!
And there is nothing I can say to them about it.

[notesdev]

9. It's theft, pure and simple

The big money players have no restrictions on taking money out of the market like 401(k) holders are subject to... so the 401kers are stuck - they buy into an inflated market, and that hostage wealth is sucked out from under them.

The ugly secret is that many 401k holders would have been much better off sucking up the severe penalties for withdrawals, rather than the even more severe devaluation of the value of their portfolios.

[Yupster]

10. You can always

take your money out of the market and put it in the moneymarket option still within the 401 (k).