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The Average American Contributed $2,733 To Their 401(k) In 2012

Tyler Durden's picture





 

One of the headline grabbing stories making the rounds today was that the average 401(k) balance, as reported by Fidelity, rose by 12% to an all time high of $77,300 in 2012 from $69,000 the year before. Considering that Bernanke, as well as the entire developed world, have now made it clear they will not stop pumping money into the market until they generate enough inflation that the world's $30+ trillion in excess debt (as calculated by BCG) can be safely inflated away, one wonders just how many months of living expenses said cash would fund, but one thing is certain: the assumption that one's entire retirement can be prefunded with some $77K is disturbing. The obligatory spin: this nubmer was a laughable $48,900 in 2008, so at least there is improvement. Green shoots perhaps?

There are nuances to the data: for workers aged 55 and over, the average 401(k) balance is $143,300, while those workers 55 and over who have been lucky to continuously contributed their 401(k) for at least 10 years have an average balance of some $243,800. Too bad the people who fall into the latter category are a handful of the entire universe. The other question, of course, is what do the tens of millions who do not have a 401(k) plan to do when they retire: the Fidelity study only accounted for some 12 million plan participants who have an account with the pension giant.

Furthermore, while it is commendable that Bernanke has generated a wealth effect of some 12% for those few who are planning for retirement, another problem is where the funding for this increase has come from. As Bloomberg explains, while two thirds of the increase came courtesy of the stock market, or some 8% in absolute terms, the rest was from funded (and matched) contributions to accounts. This is equal to $2733 in actual money set aside for retirement in 2012, a far cry from the maximum allowed $17,500 per year, with the actual cash outflow excluding the corporate match substantially less. This amount to a measly $228 per month (less net of matching) that the average American who has a 401(k), has set aside for retirement. We understand now why Bernanke is so hell bent on hitting that Dow 36,000 bogey - without it, the average retired American will wake up very soon one day and realize that the money is gone. All gone.

Some additional details on the breakdown:

Among older workers, 401(k) contribution rates averaged 11.4% for workers aged 65 to 69, 10.6% for those aged 60 to 64, and 10% for those aged 55 to 59. If you add in their employer match, the average savings rate for each of those groups was: 14.9%, 14.2% and 13.6%, respectively, according to Fidelity.

 

Workers aged 35 to 39 saved 7.2% on average (10.4% with the employer match). Those aged 40 to 44 saved 7.6% (10.9% with the match). Those aged 45 to 49 saved 8% on average (11.4% with the match). Those aged 50 to 54 saved 9.2% on average (12.7% with match).

Which means that once again it is the younger workers who are in for a very rude awakening:

Contribution rates are substantially lower among younger savers. Workers aged 20 to 24 saved 5.4% of their salary on average, those aged 25 to 29 saved 5.9%, and those aged 30 to 34 saved 6.5%. With the employer match included, those figures jump to 8.1%, 9.1% and 9.7%.

There is of course alternative, and it is well-known to those who have been following our series on the increasing gerontocracy of the American work force:

For a growing portion of people, their retirement plan is to work longer. A separate study found that 62% of workers aged 45 to 60 plan to delay retirement. That’s up from 42% in 2010, according to a survey of 15,000 people by the Conference Board, a nonprofit business-research organization

But.... but... the media spin is that the labor force is imploding because of all the millions of baby boomers who can't wait to retire. Does not compute. Must be seasonally adjusted or something.

As for the conclusion:

“You get some people who are more predisposed to saving,” said Beth McHugh, vice president of market insights at Fidelity. “Those are the individuals that we repeatedly see they will take advantage of any and all opportunities for saving.”

Considering the soaring amount of emergency 401(k) withdrawals in the past few years, the word "saving" can soon be scrapped from the US lexicon. But at least it clears up any confusion over the dreaded possibility that the Fed may, one day, begin unwinding its balance sheet which will be $4 trillion by the end of 2013, and then increase by $1 trillion every year until, well, it can't increase any more.

 


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Thu, 02/14/2013 - 17:51 | Link to Comment Shizzmoney
Shizzmoney's picture

If you can't spot the sucker at the poker table........

.......then he's probably running your retirement account.

Thu, 02/14/2013 - 18:09 | Link to Comment strannick
strannick's picture

While those above average uber Americans intead bought silver

Thu, 02/14/2013 - 18:56 | Link to Comment Fleecer
Fleecer's picture

more quick math:

say that avg 55-65 category person with $243,800 (age 60 avg), suddenly wakes up and becomes an uber-conservative saver (stick with me)... and maxxes-out this 401k the next 5 years AND does full catchup contrib (AND assume that max increases $500/yr and catchup incr $200/yr... ) AND they earn 7% (no, really) in the mkt on avg AND they retire at 65 AND only take 4% out per year from this staggering huge (sarc) nestegg of $481,717... that's A WHOPPING $19,268.66 pretax to add to their SS check. 

Whaddaya bet they still have a mortgage too.... and finance cars they can't afford...

Thu, 02/14/2013 - 19:36 | Link to Comment donsluck
donsluck's picture

You could have skipped to your last sentence. The key to retirement is lack of debt. You can live just fine on $19,268.66 a month and still save that SS check for a rainy day.

Thu, 02/14/2013 - 20:40 | Link to Comment Fleecer
Fleecer's picture

sure... but it's $19k per YEAR

OH, and I'm sure inflation isn't going to be a factor at all... I mean, Benny says printing trillions doesn't cause inflation. 

  

Thu, 02/14/2013 - 18:29 | Link to Comment BandGap
BandGap's picture

I beleive other countries have raided these accounts to meet needs (Romania?).

Thu, 02/14/2013 - 18:51 | Link to Comment Eally Ucked
Eally Ucked's picture

Yeah, everybody waits for your print out put!

Thu, 02/14/2013 - 19:26 | Link to Comment icanhasbailout
icanhasbailout's picture

Yup, that's $2733 they will never see again once the government wants it.

 

It's amazing how much people will pay for the fiction that they'll be able to retire. I need me a scam like that.

Thu, 02/14/2013 - 18:55 | Link to Comment SheepDog-One
SheepDog-One's picture

I bet most all of these .401k contributions were basically employee arm twisting by corporate employers.

I know that's the case with my aunt, over Christmas she said she's worried about having money in these markets and wants out of her 401k but her employer 'frowns' on it.

Thu, 02/14/2013 - 17:52 | Link to Comment kliguy38
kliguy38's picture

That's a couple a grand too much........

Thu, 02/14/2013 - 18:04 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Yep. Finally, the average American is showing some common sense. I will be surprised if the nation's 401k's don't get seized before the end of 2013. I'll be SHOCKED if they don't get seized before the end of 2014.

Thu, 02/14/2013 - 18:07 | Link to Comment SilverIsKing
SilverIsKing's picture

I don't contribute anymore because I think what's in there will be gone.  I'm missing out on the match but that's just a mirage to begin with.

Only way to get the money is to leave the job.  Considering it.

Thu, 02/14/2013 - 18:19 | Link to Comment Meat Hammer
Meat Hammer's picture

Having to quit your job to get your money.  Wrap your head around that one.

Fri, 02/15/2013 - 07:04 | Link to Comment Sorynn
Sorynn's picture

My company outsourced Accounting and Finance.  Much more of the backoffice work, including legal support is on its ways overseas.  I was able to secure a small severance, and I was able to take my 401k cash with the tax hit.  That currency may go many places, but not back into the ponzi.  

Thu, 02/14/2013 - 17:53 | Link to Comment Freddie
Freddie's picture

Hope & Change.  A lot of baby boomers and seniors voted for this.  Nice job.

Thu, 02/14/2013 - 17:55 | Link to Comment Kreditanstalt
Kreditanstalt's picture

Again, why does the Fed EVER have to "unwind its balance sheet"?

Tell me why.

Thu, 02/14/2013 - 17:58 | Link to Comment Cdad
Cdad's picture

Why?  The reason WILL BE...inflation.  But of course, by then, it will be too late to stop that particular economic problem.  Which is why the FED SHOULD BE unwinding right now.

You asked...

Thu, 02/14/2013 - 18:07 | Link to Comment Kreditanstalt
Kreditanstalt's picture

Really?  They never need to mark anything to market.  They can literally PRINT "money".  There is no price inflation because the printing of money and funnelling of it directly to the banking sector has taken the place of the fractional reserve process as a money generating mechanism.  It's safely esconced in "excess reserves" anyway: velocity ZERO.

The Fed can even hide price inflation - IF the miserable remnants of the productive private economy ever become strong enough to ever generate any...  And their balance sheet can continue expanding quite literally forever. 

I predict that they'll never "unwind" their balance sheet...

Thu, 02/14/2013 - 18:23 | Link to Comment Shell Game
Shell Game's picture

Statist bodies dangling from D.C. trees and lamposts will unwind the Fed balance sheet...

Thu, 02/14/2013 - 19:42 | Link to Comment donsluck
donsluck's picture

I am of the same mind Ms K. A lot of these analysts carry their argument to that point and stop. If the Fed balance sheet continually expands, you would eventually run out of financial "products" to buy. The problem becomes organic. Nothing can expand infinetly. Wait, maybe it can. After all, the evidence now is that the universe will constantly expand.

Thu, 02/14/2013 - 23:21 | Link to Comment insidious
insidious's picture

Kreditanstalt, I think you used to be known by another handle (which my aging mind can't quite recall) - judging by your icon (and comments). How is your investment portfolio these days? How are you positioned and how is it working out for you?

Thu, 02/14/2013 - 17:57 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Dont underestimate the baby boomers guys, this last leg of the ponzi will be their gift to themselves, dont expect it to disappear before them

Thu, 02/14/2013 - 17:57 | Link to Comment Lost Wages
Lost Wages's picture

We stopped my wife's 401K contributions last year (because I half expect someone to steal it) and I am currently selling off all her stock funds and putting the money in the closest thing to cash her 401K plan has, the "managed income portfolio" (because I think a crash is coming in the next few months). We'll see how much of it we end up with in the end....

Thu, 02/14/2013 - 17:59 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Excuse my ignorance here but I am just wondering, are you able to select whatever equities you want in your wife's 401k or is it limited to preconceived portfolios and funds etc.?

Thu, 02/14/2013 - 18:05 | Link to Comment edb5s
edb5s's picture

Most 401(k) plans include only a set list of mutual funds to choose from (unless you are offered company stock).  These lists are usually dominated by proprietary funds of the 401(k) provider (i.e. if your plan is through Fidelity, you're looking at a lot of Fidelity funds as choices).  

 

I only put 4% into mine solely to get my employer's match.  Mine is about 50% cash and 50% Vanguard Short-Term Investment Grade fund.  I figure putting my 4% at risk of being confiscated by gov't or forced into t-bills is worth it for the match (plus my employer puts in 10% annually which vests over an extended period, couldn't be had w/o my contributions).   

Thu, 02/14/2013 - 18:07 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

gotcha thanks that was a succinct and comprehensive answer. I had heard something to this effect in most cases and always wondered whether this varies from employer to employer or if this is the standard throughout the industry.

Thu, 02/14/2013 - 18:19 | Link to Comment fonzannoon
fonzannoon's picture

Whiteshadow that was an accurate answer someone gave you regarding fund selection. To give you some perspective....I am in NY and I tend to see two types of boomers retire. The non federal worker. He/she usually has somewhere between 200k-500k in their 401(k), They are usually good for approx 20k in Social Security. The first question I get asked is "how much income can I expect from this money without taking stock market risk". My answer is usually (for 300k) 9k/yr. They look at me like I am fuckin nuts. They say "well if I put it in half stocks and half bonds how much can I expect?" I answer 12k/yr.  We pretty much accept that they will end up going through their principal and will most likely bust out at the most inopportune time in their lives. This is assuming a long term care scenario does not wipe them out first.

The second type is the 53yr old federal worker. He/she is usually retiring with a 6 figure pension. In a lot of cases that pension qualified for total disability even though they just ran a marathon. Also they have free healthcare for life. They also have 300k and could care less if I bought them lotto tickets as my financial plan because they are moving to Florida and that is their fuck you money anyway.

Maybe 1 in 10 boomers has some sort of corporate pension that bridges the gap with their SS and 12k off their 300k but that is rare and I see less and less of it every day.

 

Thu, 02/14/2013 - 18:30 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Fascinating fonz, thanks a lot for that perspective. What do they end up doing then- fixed income or 50/50 ot do they end up risking it? I assume from the context of your answer that most just take the 4% and assume most of its going to run out. 

Do your Federal retirees do a lot better than your non-Federal due to the fact that they are happy allowing you to take risks?

Also what usually happens to their home equity? Do you ever get asked to deal with something like that? I would imagine it varies vastly from case to case, but one would assume if they realize they will run out of money, are they making any plans to refinance or just sell up and buy a condo on a golf estate or something?

Thu, 02/14/2013 - 18:37 | Link to Comment Dr. Engali
Dr. Engali's picture

"Which means that once again it is the younger workers who are in for a very rude awakening"

Seems like somebody I know made this same statement on this topic about
an hour ago. You mentioned that you didn't know where I was going in my first point .... There have been various trial balloons sent up by our cash strapped government that they would take over people's 401ks and IRAs. In exchange the government would give them lifetime payments. If the participant died the money would go to the Feds not to their heirs.

Thu, 02/14/2013 - 18:42 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Yeah doc, thanks because I thought the way you phrased it you were talking about taxes or something so I couldnt quite put it together.

That seems to be the way its going, though to me it sounds like it would be easier to simply increase social security and make sure the rest get perhaps 8% annual appreciation if they are exposed to equities (of course this depends from fund to fund obviously, which was why I was very curious to hear what the level of selection actually is, and it doesnt sound like it encourage variety in the least).

Thu, 02/14/2013 - 18:48 | Link to Comment Dr. Engali
Dr. Engali's picture

Yeah but from a cash strapped government point of view they have another vehicle to cram bonds down,approximately 19 trillions worth, and the beauty is the feds get to keep it when the ex-owner dies.

Thu, 02/14/2013 - 18:54 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

That is a very interesting sort of scenario to play out in your mind, I mean technically they could step in to fill the void fonz was just talking about in terms of the 5-6% annuities that were driven out of the game.

Thu, 02/14/2013 - 20:04 | Link to Comment Dr. Engali
Dr. Engali's picture

That would be okay if it was just in my mind. However the legislation has been proposed on more than one occasion.

Thu, 02/14/2013 - 20:16 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

When you really give it some thought it would work on a lot of levels, not necessarily to the degree that it would surpass equities as an asset class for retirees, but as a good '3rd' leg sort of option to ease them out of bonds. Personally, I think assuming that the markets continue on this centrally planned path, investors will eventually make the great rotation and the Fed will be there to make sure the yield stays where its supposed to as they absorb these bonds coming onto the market, yet it is a bit presumptuous to expect people to go 100% equities right off the bat. Though I think with a decent rally this year, and a huge one next year, they would be pretty close.

If you go back and check out that article I referenced in USA today to illustrate the debate in the popular media is quite interesting because the (obviously liberal) author jumps to the unequivocal conclusion that this is all a matter of social security stepping up to provide a safety net for the failed 401k system. It would be interesting to really see this discussed on a grander scale, have there actually been any political support for the idea as of yet?

Thu, 02/14/2013 - 20:23 | Link to Comment fonzannoon
fonzannoon's picture

 

Why not tank the market, blame a bunch of rich guys, and offer to move all 401(k) balances into a government back guaranteed income account?

Thu, 02/14/2013 - 21:28 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Why tank the market? Its in our (tptb) interest to keep it going and make sure there is no risk of the economy shutting down. Youve worked so long and so hard to sucker people back in, whats the point of throwing it all away? Unless of course it would be necessary to protect the dollar in some way, as the dollar is the one thing which must be preserved at all costs, so Im sure they would sacrifice the market to protect the dollar but I dont see the necessity of it.

The real question is how to ease people out of bonds? Yields dont matter, the Fed will buy as many as it takes.

So attractive equities are one part of the equation, the idea of a sort of gov. "working man" bond (doesnt that sound great) yielding like 5-6%, guaranteed yields for yet to retire 401k workers to protect them from low bond yields. Its just a nice way to bridge the gap so they dont take too big of a hit from face value on the real bonds going down. As soon as they retire and cash in their 401k's they could then sell the "worker" bonds at market rates- very close to the 10-year obviously, and pocket the spread and stick that into equities (or keep the bonds yielding 5-6%, we can bump it up to 6.5% if they wanna go in on a 30-yr). It would also be a nice cushion for the system. Who cares, they can write the shit off anyway, the way we are discussing this scenario its about fighting deflation (ie how to counter the drain from retirees drawing down their savings). 

Thu, 02/14/2013 - 21:38 | Link to Comment fonzannoon
fonzannoon's picture

I think there are a few things to consider. First, I truly believe we are transforming into a Russia type Scenario. If government really wants to control the market (as well as everything else), well then just go for the power grab and take the money, and I think they will.

I also think that the games being played eventually ( I know I know) can lead to a currency crisis. Whenever that day comes they will choose to save the dollar and the tank of all tanks comes along and there is the excuse for the power grab if that was part of the plan.

I the demographics come into play. The 50 plus crowd are the only ones left with any money. The 4 year olds are paying for their parents and kids and the 30 and below crowd are comletely screwed. The 50 plus crowd will be draining their accounts over the next 20 years to sustain themselves and support their broke ass kids. That is a tough thing to combat.

Thu, 02/14/2013 - 21:59 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Fonz I think you have it totally backwards:

"If government really wants to control the market (as well as everything else), well then just go for the power grab and take the money, and I think they will."

Its the opposite, they are controlling the market now (no need to reiterate) through psychology, then reason they need to do that is to keep confidence in the system, not because they want the money. They have the money already, its in the shadow banking system already, the question is do they get to keep it that way. its tough for tptb to set it up for themselves any sweeter than they have it now. A local Cantillon effect where every dollar that gets printed goes into the banking system first and is then maybe or maybe not released into M2. Then a global Cantillon effect where the US profits from making everyone elses reserve currency.
They dont want to fuck this up on either the global or local scale.

You imagine it far too primitively, you must extend your imagination beyomd just the soviet experiment with central planning. Hitler took more or less took full control of the economy as well but didnt close down the stock market. He also monetized much of his state spending of the books:

http://en.wikipedia.org/wiki/Mefo_bills

He was given credit for the same reason the dollar is there, because his creditors (in the US case, the entire world) believed he would be good for it so long as he could militarily push his weight around.

There are all kinds of outcomes for central planning...

And the demographic challenge if anything is a massive deflationary challenge. I wish I could find it but I recall there was an article here on ZH long ago about how the Fed expects P/E ratios to eventually compress to 7-8x from the effects of the baby boomers drawing down.

What keeps Bernanke up at night isnt Zimbabwe, its Japan

Thu, 02/14/2013 - 22:04 | Link to Comment fonzannoon
fonzannoon's picture

I truly do understand where you are coming from. I think you absolutely miss the mark of the mindset of the people here. I think you take the clients you deal with and extrapolate their psychology to the people here. You have complete and total faith in this grand experiment and have little worries that it will fail.

Retail is not coming back. You can make the case that the market does not need them. I can't say whether the market does or does not. I did not think it would go on this long with these no volume ramps day after day. I have no idea how ZH has the intestinal fortitude to keep reporting it. I am in the business and I lost interest a long time ago.

But at that point it's not about some experiment anymore. It's just a bunch of bullshit.  It's an elite power grab, and money grab. Which I am pretty much convinced that it is. Everyone sees this as a gimmick.  Even people with a fraction of your understanding of things see a sidewalk Atlantic city magic trick at best.

Thu, 02/14/2013 - 22:52 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

To be honest fonz, I think the mindset of the people here is they have nothing left to lose so bring it on, though I dont think theyd like how it would go when push came to shove, but at the moment they cant see how it could be any worse for them. Theres sort of a general boomer doomer undercurrent here as Carlin put it "they're staring down the barell of middle age burnout, and they dont like it" and Im sure some people here would have been happy to see the Mayan prophesy come true and finally see the world destroyed, because if they cant live forever, theyll at least take down the system before they go.

It aint gonna happen. Its not that I put such extensive confidence in the central planners themselves, its simply that Ive sized up their opposition and there is no single group, old or young that is willing to risk anything for a new system.

It really is the Decembrist revolution of 1825.
http://en.wikipedia.org/wiki/Decembrist_revolution

Where Im not exactly with you anymore is the elite power/money grab. They have been consolidating their control over the past 30+ years building up the system to the point it is now. What more can they possibly get in terms of power/money that they dont already have. In my mind its all about maintaining the status quo, why in the world risk tanks in the streets? Seriously, for what that they dont already have?

Usually, revolutions or power grabs etc occur by definition when one group is out of power and takes it from another. You are talking about the guys that are well and truly in power and who have engineered a world ascendancy of finance and made themselves the new nobility in effect, throwing it all away to crash their own system (you are saying theyd tank their own markets, not an exogenous group of Revolutionary people doing it to them), and for what?

Thu, 02/14/2013 - 23:00 | Link to Comment fonzannoon
fonzannoon's picture

I just believe the system is broken. The social security etc. funds are almost tapped out. as well as so many other entities. that 19 trillion or whatever would make a nice temporary infusion of capital to keep paying those ponzi's. i'm not saying i am resolute in this theory. I don't know to what extent qe's can be redirected to spray money at all different holes in the dam. 

i am pretty sure you will go with the digital money route as the answer to a lot of this. i don't have a built in argument against it because it has not been something i have spent a lot of time on. 

I also don't subscribe to the idea that the only alternative has to be chaos and mad max. But maybe it is. I don't really know.

Thu, 02/14/2013 - 23:15 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Dude, always good talking but i gotta run. Remind me tomorrow to tell you the story of my favorite client...

Thu, 02/14/2013 - 18:40 | Link to Comment Vashta Nerada
Vashta Nerada's picture

I gave you a thumbs up for honesty and accuracy, fonzanoon, though that is the most depressing thing I have read all day, and that is indeed saying something.

Thu, 02/14/2013 - 18:27 | Link to Comment Seasmoke
Seasmoke's picture

you speak the truth fonz............now the question, is how to end those fraudulent public pensions

Thu, 02/14/2013 - 18:31 | Link to Comment otto skorzeny
otto skorzeny's picture

they'll extract it from you-at gunpoint

Thu, 02/14/2013 - 18:44 | Link to Comment fonzannoon
fonzannoon's picture

A few years ago their used to be annuity vehicles that guaranteed 5-6% withdrawal features. I absolutely hated them because they fee the shit out of people. But I did lock some people into them (with a portion of their assets) becuase I started realizing how bad it would get with rates. They have ended up being a blessing which will end up being a curse. Those life insurance companies that offered them have since raised their fees, cut off additions and have offered to try to buy some clients out. The next step is one of them will go belly up and fail to pay the benefits. Zirp will make it an eventual certainty. Like everything else in life when you are retail it's heads they win tails you lose.

As for what happens today? Today clients say "well do what you think is best". They usually go the mix of stocks/bonds route and access the dividends as they pay out. To your point, rates going down while stocks have gone up has....to a limited extent, helped with the extend and pretend game. It has absolutely helped some people keep their balances in tact while they draw down. But more often than not I get phone calls from people asking to take a few extra distributions throughout the year and the writing is on the wall.

Like I said I am in NY so I do get plenty of the happy go luck federal retirees which help my business while at the same time causing me to pay 12k/yr and rising property taxes and $1,300 in healthcare permiums to fund their damn pensions and healthcare. It's like they are patting me on the head while kicking me in the balls.

Thu, 02/14/2013 - 18:58 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

fonz where do you think the line is?  If you told them they could expect an 8% return in equities (hypothetically) with minimal risk, would most of them convert to 100% equities? Would that be enough $24k +$20k from SS for them to make their bottom line (assuming constant dollars of course for the sake of argument)?

funny about the Federal workers being both a curse and a blessing for you. 

Thu, 02/14/2013 - 19:07 | Link to Comment fonzannoon
fonzannoon's picture

If I told anyone they could expect an 8% return in equities with minimal risk most of them would go for it. The first 5% correction (should it ever come) they would pull their money and sue the shit out of me. I would lose in arbitration and lose my licenses and that would be it.

I don't mean to skirt your question. I know it is theoretical, but it is a non starter because I could never do that.

The funny thing is the Pimco total return bond fund was up what....10% last year? So people have come to expect the total returns from bonds and the income from their stocks.

Thu, 02/14/2013 - 19:11 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Really interesting discussion, because in a way this goes right to the heart of the psychological aspect on which I predicate my outlook of the Fed's near term success. 

Again, just for the sake of argument, lets just assume the markets do 8% this year and 10% next year, meanwhile bonds are flat. That doesnt necessarily mean PIMCO wont make money, but one imagines it will certainly shift to the equities side in terms of total return. What do you expect them to do- would they begin the great rotation as has often predicted (even if you havent promised them 8% outright?)

Thu, 02/14/2013 - 19:18 | Link to Comment fonzannoon
fonzannoon's picture

It's two battles being fought. You have the one person who is hanging by a thread already. So while I would expect them to extend out on the risk spectrum a bit, and it would help them somewhat...they are the ones with employment issues and fighting inflation and they are exhausting their assets in spite of the rising market.

The second person who has the cushion of a pension etc. was already in the market to begin with, so they get an extra pop.

Winners and losers man, and in a lot of cases the losers are footing some of the bill the winners are enjoying. That is why the social fabric continues to tear.

Thu, 02/14/2013 - 19:20 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Yeah interesting, my clients by and large dont even want dividends (tax consequences) and expect 100% of their income to come from (tax-free) equity capital gains, so thats also interesting. If I have US stocks for example, 30% of dividends are automatically deducted unless they are willing to fill out a tax declaration (which most will not do) and then it comes down to 15%, so in many cases I am obligated to sell things before the ex-date

Thu, 02/14/2013 - 19:47 | Link to Comment donsluck
donsluck's picture

Seasmoke, just end the pesky Contract Laws. Who needs Contracts anyways?

Thu, 02/14/2013 - 18:11 | Link to Comment Lost Wages
Lost Wages's picture

In our case there are about 31 mutual funds you can choose from and that is it. Some people have more choices. About 11 of them are "target date funds" which are funds filled with other funds, i.e. fees upon fees. :/

Other than the Fidelity target funds, there are various companies funds available: American Century, Spartan, JPM, Diamond Hill, Artisan, Janus, Scout, Brown, Invesco, Vanguard, Morgan Stanley, Cohen Steers, Pimco and DFA. Large cap, mid cap, small cap, realty, international and bonds.

Thu, 02/14/2013 - 18:16 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Thanks also, interesting, does anyone ever buy their company stock if offered, and if so does the employer match a greater percentage?

Thu, 02/14/2013 - 18:22 | Link to Comment Lost Wages
Lost Wages's picture

There is an employee stock purchase plan available which is done separately from the 401K, but there is no match. You can contribute 1-10% of your income and the purchase price is something like 85% fair market value. Purchases are automatic and occur quarterly. The enrollment is handled by someone other than Fidelity, like E*Trade.

Thu, 02/14/2013 - 18:26 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Thats also highly interesting, so there is no match but you do get an effective 15% discount. What about selling any of these automatic purchases, whats the timeframe on that?

Thu, 02/14/2013 - 18:26 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

Thats also highly interesting, so there is no match but you do get an effective 15% discount. What about selling any of these automatic purchases, whats the timeframe on that?

Thu, 02/14/2013 - 18:51 | Link to Comment Lost Wages
Lost Wages's picture

I think if you sell before 2 years you have to notify the company in writing. It is considered a "disqualifying disposition" and you are taxed differently and the company itself gets an income tax deduction based on the difference in buy & sell price. You are also bound by insider trading rules and not allowed to sell at certain times, like earnings reports or around public offerings.

Thu, 02/14/2013 - 19:02 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

"income tax deduction based on the difference in buy & sell price"

 

these structures are so interesting, thanks everyone for chiming in

Thu, 02/14/2013 - 18:30 | Link to Comment secret_sam
secret_sam's picture

Employer of a friend of mine runs an employee stock-purchase plan.  It's not part of the 401K program, so he has to buy w/taxable income, but they offer a significant discount to the share price for internal buyers--about 20% last I checked.

Some of the wage-slaves actually put a lot of their paychecks into the stock and flip it the day they receive it to get a small net income boost.  It works fine for now, and it's a cheap share-price, but I'm wondering what's going to happen to them if their $400/week paycheck takes a hit because of an unexpected correction.

Hopefully they've got some savings.

On the other hand, the company could possibly start doing something right and shoot to the moon. 

Thu, 02/14/2013 - 18:46 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

"Some of the wage-slaves actually put a lot of their paychecks into the stock and flip it the day they receive it to get a small net income boost. It works fine for now, and it's a cheap share-price, but I'm wondering what's going to happen to them if their $400/week paycheck takes a hit because of an unexpected correction."

Thank you for your comment, I was wondering if this was technically possible to flip so fast

Fri, 02/15/2013 - 10:37 | Link to Comment secret_sam
secret_sam's picture

These are not options or anything, it's just an investment plan. 

I'm puzzled by the big price discount, but I know for certain that folks are doing it.  I think they're all nuts.

Thu, 02/14/2013 - 18:20 | Link to Comment ultraticum
ultraticum's picture

Another way the bankstas legislate their own profits: shackle their wage slave chattel to a limited number of mutual funds they can invest their 401Ks in.  All fee based, of course.  What a fucking racket.  Best thing about quitting your job is to roll that putrid 401K over into a self-directed IRA with broader options . . . but even that money won't be yours until you're 59 1/2 or pay the 10% penalty.  Some less-known custodians offer the ability for you to invest your IRA into real estate or PMs, or even a checkbook LLC which you control . . . but again you find yourself on the wrong side of a fee based bonanza.

Life in Franz Kafka's USSA!

Thu, 02/14/2013 - 18:36 | Link to Comment secret_sam
secret_sam's picture

My 401K options were designed for preschoolers.  You get 5 choices, basically:

1) I want to retire in 10 years
2) I want to retire in 20 years
3) I want to retire in 30 years
4) I want bonds
5) I want income

Gee.  Thank you for such brilliant options.

Thu, 02/14/2013 - 19:48 | Link to Comment donsluck
donsluck's picture

I want sex, oh well...

Fri, 02/15/2013 - 10:39 | Link to Comment secret_sam
secret_sam's picture

Well, I selected "I want to retire in 10 years" and have about $20/month going into the plan. 

I'm looking forward to being done with this work by the age of 50...

Thu, 02/14/2013 - 18:06 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I can select PIMCO, among other options.  It's through C. Schwab.  Wonder what their take is for funds they don't directly manage. 

Can also take out 50% in loan.  I've used that to buy gold & silver, then paid up the loan on my own time.  Can never have too many eggs in too many baskets.

 

Thu, 02/14/2013 - 18:09 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

interesting, thanks

Thu, 02/14/2013 - 18:29 | Link to Comment Dr. Engali
Dr. Engali's picture

It doesn't matter where you put it.... If the crash does come it doesn't matter what fund you are in because the system will completely break down...money market funds and all.

Thu, 02/14/2013 - 18:51 | Link to Comment Sweet Pea
Sweet Pea's picture

Whew!  Now I can stop worrying about my fund choices.

Thu, 02/14/2013 - 18:34 | Link to Comment Son of Loki
Son of Loki's picture

LW, I agree. I took another lump off the table this week while the going is good. The run up was easy, nice, smooth but now I'd rather be holding cash on the sidelines untill there is a 20-40% correction down to reality.

Thu, 02/14/2013 - 17:57 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Retirement will be SO 20th Century for those my age (40-ish) and under.

Thu, 02/14/2013 - 18:06 | Link to Comment Winston Churchill
Winston Churchill's picture

The 20th Century was an abberation.The norm is work till you drop,

now get back to work serf..

Thu, 02/14/2013 - 18:25 | Link to Comment BandGap
BandGap's picture

Dude, I turn 52 this month and I'm thinking I won't be retiring, either.

Now it's all just a game.

 

Thu, 02/14/2013 - 18:01 | Link to Comment bnbdnb
bnbdnb's picture

LFPR = The Big Lie

 

 2002-2012

16-55 made up 22.1% of population growth, however accounted for -15.3% of labor force growth.
The 55+ age group has made up 77.9% of population growth, however accounted for 115% of labor force growth.

Meaning...The 16-55 age group as a percentage of the labor force is growing less than the 55+ age group. Easily the 55+ age group is making up most of growth in the labor workforce.

16-55 age group 722,000 not entering/leaving labor force per year. (population grew 5.7m, labor force grew negative! (-1.5m!)
55+ age group 838,000 leaving labor force per year. (population grew 20.1m, labor force grew +11.6m )

The total population growth of these two groups.
16-55 +5678 (22.1%)
55+ +20036 (77.9%)

Those 55+ are entering the workforce at a rate of about 58.2%
The 16-55 are entering the workforce at a rate of -27.3% (negative number)

Obviously the 16-55 age group is dragging down the LPR far more than the 55+.

The claim LFPR is reduced due to retiring citizens is a falsehood.

http://www.politicalforum.com/current-events/285355-labor-force-participation-rate-big-lie.html

Thu, 02/14/2013 - 17:59 | Link to Comment stant
stant's picture

that 19.4 trill in 401k and iras is where all that us debt hes buying is going to go to die

Thu, 02/14/2013 - 18:00 | Link to Comment LongSoupLine
LongSoupLine's picture

...without it, the average retired American will wake up very soon one day and realize that the money is gone. All gone.

 

 

The fucking "money" is already long fucking gone.  All that fucking remains is "currency".

 

Fuck you to all ball burning hell Bernanke, you fucking piece of fucking economy and wealth destroying shit in a fucking suit.  fucking prick.

 

 

Thu, 02/14/2013 - 18:05 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

you might want to consider a pic for your avatar that is...slightly less upbeat looking

Thu, 02/14/2013 - 18:07 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Really?  I think it adds an extra twist of ironic anger.

Thu, 02/14/2013 - 18:19 | Link to Comment francis_sawyer
francis_sawyer's picture

  "you might want to consider a pic for your avatar"...

~~~

You too... Robbin Leach [peeps never quite GOT the irony of that name], ought to suit you...

"Champagne Dreams & Caviar Wishes" old chap!

Thu, 02/14/2013 - 18:34 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

I was thinking Monty Burns. What do scorpions taste like btw? Ive had rattlesnake...

Thu, 02/14/2013 - 18:49 | Link to Comment francis_sawyer
francis_sawyer's picture

chicken

Thu, 02/14/2013 - 20:01 | Link to Comment Whiteshadowmovement
Whiteshadowmovement's picture

i guess they say that about everything...

Gator is some great shit (the best of the 'like-chickens' in my book)

 

PS- you like, I was gonna go Mr. Burns but then I thought Krusty is the more apt analogy here, my fav. Simpsons character because he is the worlds most hilarious sell-out, he'll do anything to make a buck and since I gather you're a big fan of Jews (Krusty of course being a prominent Jewish stereotype on the Simpons), I figured you'd appreciate it.

Hes got these posters of himself as Chairman Mao up for motivation in his Asian sweatshops where this recording (done by himself) plays on loop 24/7 for his workers:

"Laziness is counter-revolutionary!"

"Questions are decadent!"

komrade_by_lily_fox-d37iljf.jpg

 

Fri, 02/15/2013 - 01:05 | Link to Comment Curiously_Crazy
Curiously_Crazy's picture

Nah. Kangaroo

Thu, 02/14/2013 - 18:29 | Link to Comment Vashta Nerada
Vashta Nerada's picture

I briefly had a vision of the Stay-Puff marshmallow man on a path of destruction.

Thu, 02/14/2013 - 18:11 | Link to Comment Seasmoke
Seasmoke's picture

No, do not change a thing LSL

Thu, 02/14/2013 - 18:07 | Link to Comment Timmay
Timmay's picture

Word.

Thu, 02/14/2013 - 18:35 | Link to Comment Meat Hammer
Meat Hammer's picture

I think "dick smuggler" was still the best line of the day.  HA!  

Thu, 02/14/2013 - 18:04 | Link to Comment Whiner
Whiner's picture

The Bernanke would unwind its BS by selling the FRNs and CMOs its been buying. Except, then, nooooobody will buy the crap. So yeah, it will never unwind to gather back money stock. Am I right? Huh?

Thu, 02/14/2013 - 18:04 | Link to Comment Seasmoke
Seasmoke's picture

No country for Old Peoples Ponzi Scam

Thu, 02/14/2013 - 18:10 | Link to Comment Broccoli
Broccoli's picture

This is really bad news for Uncle Sam. When the inevitable 401k and IRA asset confiscation is forced on the American people to protect their investments from themselves, there might not be enough contributions to fund the government monthly deficit.

I mean, what government hasn't tried to capitalize its broke central bank and treasury by benevolently taking all retirement funds under its wing? Argentina has done it how many times?

For the timeline of events, it normally goes print money -> hyperinflation -> PM ownership declared terrorism -> foreign currency ownership declared terrorism -> Benevolent Retirement Confiscation -> Land confiscation -> Currency Reset and Guillotine

Thu, 02/14/2013 - 18:21 | Link to Comment Fredo Corleone
Fredo Corleone's picture

Wall Street will never allow an Argentine-style "confiscation," as it would be the end of their casino world as they know it; in addition, the attendent crash would render this nation in such a state of phthisis, the American economic system would devolve into widespread barter.

The likely end-game ? Indexing ( based upon AGI ) of tax-deferral, and a reduced age for mandatory distributions. The Government is going to tax this $19 trillion pool eventually; confiscation would be akin to the Government cutting off the very hand by which it feeds itself.

Thu, 02/14/2013 - 18:31 | Link to Comment Broccoli
Broccoli's picture

The number one thing to realize is that when the government gets desparate it will eat anyone to keep going for just a little bit longer, even former allies. I put government confiscation near the end of the timeline, but it will eventually happen.

Today's crony capitalist is tomorrows bogey man used to divert the peasants attention. Saddam Hussein is a great example of best friend of the US government one day (Iran/Iraq War), enemy #1 the next day.

Thu, 02/14/2013 - 18:34 | Link to Comment Gene Parmesan
Gene Parmesan's picture

All well and good, but this presupposes that the social fabric will stay intact long enough for things to play out this way. I think it's more likely that, at some point in the not too distant future, the have-nots will want more of what the haves have, and the need for redistribution and "sharing" out of "fairness" will trump all.

Thu, 02/14/2013 - 18:46 | Link to Comment Vashta Nerada
Vashta Nerada's picture

The have-nots have been told for at least three generations that they are owed a goodly portion of the assets of the haves.  When the government can no longer efficiently take from the haves to give to the have-nots, the have-nots will cut out the middleman, and come directly to your house to collect 'their' stuff.  The day is coming closer, as can be seen by the lines at certain retailers.

Thu, 02/14/2013 - 22:28 | Link to Comment Gene Parmesan
Gene Parmesan's picture

The government will facilitate them rather than let themselves be cut out. Survival and power are everything.

Thu, 02/14/2013 - 18:43 | Link to Comment secret_sam
secret_sam's picture

I think you're correct that there won't be a "confiscation" in so many words, but the day Fidelity can no longer hide insolvency, it wouldn't surprise me to see an emergency bill passed which would "save" all the investors by issuing face-value in bonds to cover current retirees while they "restructure" the company.

Thu, 02/14/2013 - 19:07 | Link to Comment ebworthen
ebworthen's picture

Confiscation will be called "conversion" and will go something like this (re-posted comment of mine from an article on ZH last week):

 

"Dear Taxpayer,

The Treasury Department is pleased to tell you that your entire (IRA/401K/Pension) has been converted into a blend of 1, 10, and 30 year Treasury Patriot Bonds backed by the full faith and credit of the U.S. Government.

You will have access to the FULL amount of your investment in our great nation when you reach age 70 or die (whichever comes first). 

Be aware that if you die any proceeds to spouse, children, or designated recipients will be taxed at 59% and any capital gains since this conversion occurred at a rate of 25%.

The FED will set the Treasury Patriot Bond rates, but be assured that it will be at least equal to the Revised Chained Cost of Living Allowance (RC-COLA) of Social Security.

Withdrawals from your funds can only be taken in apportionment with your life expectancy.  For example, if you are a male aged 70 and average life expectancy is 86, you may withdraw 1/16th of your holdings per year and only in monthly installments and no lump sum withdrawals are allowed.

In times of national crisis, your withdrawals may revert to the 1/32nd's or 1/64th's rule of apportionment, however, we do not foresee this occurring at the present time.

We hope you appreciate the necessity of this conversion, and thank you in advance for your patriotism and commitment to restore the nation and support liberty.

Regards,
Jon Corzine
Treasury Secretary"

Thu, 02/14/2013 - 18:10 | Link to Comment EclecticParrot
EclecticParrot's picture

. . . while the average Starbucks contribution was slightly higher, roughly 3 grand (two lattes plus one croissant times 240 annual work days, etc,, etc.)

Thu, 02/14/2013 - 18:14 | Link to Comment John Law Lives
John Law Lives's picture

Too bad that the cost of food, energy, tuition and medical care are surging higher and higher.  Temporary gains from Chairsatan's meddling may not even keep pace.

401(k) FUBAR.

Thu, 02/14/2013 - 18:14 | Link to Comment A. Magnus
A. Magnus's picture

You gotta HAVE enough income to stash away after taxes and inflation to even consider doing so these days. I made a modest contribution to my retirment last year in silver, which although less in fiat bux than this fake annual 'contribution average,' I can at least brain a banker with my stack...

Thu, 02/14/2013 - 18:22 | Link to Comment John Law Lives
John Law Lives's picture

"... I can at least brain a banker with my stack..."

That is damn funny!

+1000.

Thu, 02/14/2013 - 18:16 | Link to Comment TuesdayBen
TuesdayBen's picture

Me, I used to try to plan for the future. Now, having been humbled at 'planning', having been filled with doubt about the quality of future existence for all, I live for today and hope to live a very simple and comparatively low cost lifestyle in 'retirement' should I ever arrive there.
The 401k deal is no big deal.

Thu, 02/14/2013 - 18:19 | Link to Comment billsykes
billsykes's picture

Why save? for what? For the ever greater world we are evolving on/in. 

So you can shit your pants with your adult diaper on? stare at the wall at the old folks home?
So you can be very old and outlive your spouse and friends? So you can work at McDonald's with the green haired tattooed idiots?
So you can be so old you can only dream of getting it up again?  
So you can look forward to getting a walker or your hips replaced or you can go on opiate
 based drugs because the pain is so bad?

Old enough so there is no doubt that you don't have any second chances left and can now only fully regret pissing your youth away trying to get the brass ring and never do?

Or you did grab it and you are in the same spot? OR worse you have Parkinson's and cannot remember and then when you do its like a nightmare?   

Fuck that. 

 

Bullet to the head or skydiving without parachute by 50 for me. 

Thu, 02/14/2013 - 18:44 | Link to Comment Meat Hammer
Meat Hammer's picture

I somewhat agree with you, although in not such a depressing fashion.  Youth is wasted on the young.  There are many days when I think: Fuck it, I'll take my 401k money out and travel around the world until the money dries up.  Then when I'm old, shitting myself and broke I'll have memories of more adventures than the guy next to me who's old, shitting himself and has 401k money that he's too old and senile to enjoy.  

I say overdose on heroin with a room full of hookers at 50.

Thu, 02/14/2013 - 19:26 | Link to Comment Winston Churchill
Winston Churchill's picture

Make it speedballs at 60,and we have a date.

Strange I too used to think of fifty as the year to die,now I'm past that threshold,

it seems to be forever just over the horizon.

Looks like we have Obamacare ,and soyalent green as the answer.

Thu, 02/14/2013 - 20:26 | Link to Comment scrappy
scrappy's picture

Don't ever give in, it's YOUR LIFE.

50 is the end?

Yea right.

I am past that and in better shape than most.

I plan on making it to 115, after I celebrate the tricentennial (2076) in a FREE America, after we do what we must today, is in the history books.

Let's get rid of these dinosoars and their sick games and move to a real future without THEM.

 

 

 

 

 

Thu, 02/14/2013 - 20:28 | Link to Comment nightshiftsucks
nightshiftsucks's picture

I'm almost 50 and can still get it up so i would wait at least until 60.

Thu, 02/14/2013 - 18:17 | Link to Comment Agent P
Agent P's picture

"for workers aged 55 and over, the average 401(k) balance is $143,300"

This is scary.  For those with 10 years or less until retirement age, the average balance is less than $150k.  No wonder everyone wants a fat public pension. 

Thu, 02/14/2013 - 18:18 | Link to Comment ebworthen
ebworthen's picture

Contributed?

I had to cash mine out to pay the bills.

Fuck You Ben Bernanke, and CONgress, and Washington, and Wall Street.

Thu, 02/14/2013 - 18:19 | Link to Comment edifice
edifice's picture

The Average American Contributed $2,733 To Their 401(k) In 2012

Yeah, I was forced to... Minimum contribution and all... I can't wait for Uncle Sam to scoop it up and place it into nice, safe Treasuries. 

Thu, 02/14/2013 - 18:19 | Link to Comment secret_sam
secret_sam's picture

Ya can't save what you don't have. 

It's ridiculous to pretend "the young" who are investing so little in stocks are missing out on anything.  The stock market hasn't gone anywhere in 20 fuckin' years.

Giving your money to Fidelity to be part of the latest pump'n'dump scam shouldn't be confused with "saving for retirement."

Thu, 02/14/2013 - 18:23 | Link to Comment Seasmoke
Seasmoke's picture

i stopped contributing in 2007.......Looks like a good time to start it back up

 

/SARC

Thu, 02/14/2013 - 18:23 | Link to Comment Son of Loki
Son of Loki's picture

With inflation running 10% how much purchasing power will $77k have when the worker retires?

Thu, 02/14/2013 - 18:28 | Link to Comment Agent P
Agent P's picture

Just enough for a dose of viagra, a night with a hooker, a bottle of scotch, a pistol, and one bullet.  How's that for retirement planning?

Thu, 02/14/2013 - 18:24 | Link to Comment Shell Game
Shell Game's picture

Boating accidents have taken a heavy, heavy toll on 401k contributions....

Thu, 02/14/2013 - 18:27 | Link to Comment Rustysilver
Rustysilver's picture

Forget about retirement. They are going to get you.

Apparently, Christopher Dorner cabin was set on fire by the police. They used tear gas which generates a lot of heat. End of story.

Sorry if this is off topic but there is going to a lot more of this type of retirement parties.

Thu, 02/14/2013 - 18:27 | Link to Comment Catullus
Catullus's picture

I only put enough in to maximize the match.  Otherwise, if you're young, there's no reason to put money into it.  Even if it turns out you're going to get to keep it and the tax code doesn't change, it's still locked up for 30-40 years.  Fuck that noise.

Thu, 02/14/2013 - 18:29 | Link to Comment Jeepers Creepers
Jeepers Creepers's picture

What concerns me though is how little people save for their retirement.  Don't think for a minute that these people that average $70k in their 401k have a million dollars in bullion in their safe at home.  The 401k and the (usually negative) equity in their home IS their life savings because we have a culture of consumerism that only thinks about today.

When you add up all the debt the average American has, most will be lucky to break even when they can no longer work.

Thu, 02/14/2013 - 18:30 | Link to Comment koaj
koaj's picture

Why anyone puts any money in any account controlled even 1% by government rules and regulations is beyond me. I stopped a few years ago. Now i get rid of mortgage and student loan debt and buy silver.

Thu, 02/14/2013 - 18:44 | Link to Comment QQQBall
QQQBall's picture

Paying down the mortgage is good, particularly if they maintain the $250k tax exemption on sale.

Thu, 02/14/2013 - 18:48 | Link to Comment Meat Hammer
Meat Hammer's picture

Especially since the mortgage is priced in yesterday's fiat and you're paying it off with increasingly worthless today's fiat.

Thu, 02/14/2013 - 18:31 | Link to Comment astoriajoe
astoriajoe's picture

I put my full allocation in last year.

I sort of feel like a chump now.

Thu, 02/14/2013 - 18:31 | Link to Comment koaj
koaj's picture

to follow...when i was in the housing market 4-5 years ago as much as the market was crashing and buyers disappeared, people who had been in their houses for 15-20 years would not budge as their house was their 401k

Thu, 02/14/2013 - 18:32 | Link to Comment Meat Hammer
Meat Hammer's picture

I just rolled a portion of 401k money to a self-directed IRA, which allows investments into practically anything - PMs, farmland, real-estate, interest in businesses.  At least a little bit of the money is now shalom-proof.  

Thu, 02/14/2013 - 18:47 | Link to Comment IridiumRebel
IridiumRebel's picture

I am sure they will find a way to get their satanic talons into that too......Nowhere to run to, baby, nowhere to hide.

Thu, 02/14/2013 - 18:41 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

My wealth is digital 1's and 0's whirling around on a hard disk, whee!  I feel rich....

http://www.youtube.com/watch?v=hxRoXuPjAKc

 

Thu, 02/14/2013 - 18:42 | Link to Comment QQQBall
QQQBall's picture

Inflation can be under-reported, but it is hard to hide. Planning to have Salmon tonite - $19.99/# :)

Thu, 02/14/2013 - 18:49 | Link to Comment deerhunter
deerhunter's picture

When they fired the "burner" tear gas into the cabin they knew full well it would burn to the ground.  Dorner crossed the blue line a bit to far.  No country for "Blue Men" when they go against the stream.  Think Waco Texas or Ruby Ridge.  We have only seen the beginning.  When people will shoot at you for cutting them off in traffic on the freeway society has already lost its moral compass.  Know your neighbors well.  Know your friends well.  Know your enemies better.  Jusy saying,,,,,,,,

Thu, 02/14/2013 - 18:49 | Link to Comment deerhunter
deerhunter's picture

two oo's in too for those of you wishing to correct my spelling. 

Thu, 02/14/2013 - 19:33 | Link to Comment Optimusprime
Optimusprime's picture

Jusy saying.

Thu, 02/14/2013 - 18:57 | Link to Comment ekm
ekm's picture

http://www.zerohedge.com/news/2013-02-14/bill-gross-new-form-capitalism#...

 

I was discussing with blogger 'dark pool of soros' about this on the bill gross post, and ZH promptly follows up with data, proving what we said.

 

I love ZH.

Thu, 02/14/2013 - 18:59 | Link to Comment havin' thangs
havin' thangs's picture

If I am a first time PM buyer, what is my best avenue?

Who is the most reputable online dealer? 

Are there any alternatives to pawnshops if I want to buy PMs in person?

How should I store them  cost effectively?   *Other than at the bottom of a large body of water.*

 

Thu, 02/14/2013 - 20:14 | Link to Comment CuriousPasserby
CuriousPasserby's picture

Buy at a coin show for cash from an ANA member, store them hidden in your walls, floor, furniture. But leave your heirs a map in case you croak.

Thu, 02/14/2013 - 18:59 | Link to Comment TraderTimm
TraderTimm's picture

Should've stacked bitcoins.

401ks are for old people and the irrational.

Thu, 02/14/2013 - 19:16 | Link to Comment robertocarlos
robertocarlos's picture

They probably invested their savings in gold, silver, or, at the least, glocks.

Thu, 02/14/2013 - 19:49 | Link to Comment Bunga Bunga
Bunga Bunga's picture

Why save when we can print?

Thu, 02/14/2013 - 20:12 | Link to Comment CuriousPasserby
CuriousPasserby's picture

Maybe instead of putting into 401ks, they are buying physical and stacking? I knoe I am. 

Fri, 02/15/2013 - 00:06 | Link to Comment dolph9
dolph9's picture

It bears repeating:  if you have any money whatsoever in a 401k or 403b or 666z or IRA or "Roth" or "Rubenstein" or whatever the fuck they are calling these accounts, consider that money gone forever.

 

I'll be impressed when I see that Amerikans are contributing nothing to these accounts, then I will know the sheeple are starting to awaken.

Fri, 02/15/2013 - 10:01 | Link to Comment madcows
madcows's picture

I didn't put anything in there.  Why would I want to put my money somewhere that I can't touch it for decades w/o paying huge penalties if I need it.  And, it is in the hands of known criminal manipulator thugs: a casino rigged against me.  AND, it is at a much higher risk of losing 50% of it's value than it is at gaining 5% of its value.  No thanks.  If I was a really rich guy, and I needed a tax shelter, then ok, I'm rich, so I can afford to lose some of it.  But I'm not rich.  I"m a working stiff.  And, I think the whole shell game is coming to an end sooner rather that later.  So, I'd rather be liquid right now.  I'll keep the investments I have b/c I don't want to pay the penalties to withdraw it, but I see no reason to entrust any more money in it.  TPTB have taken over.  It's not a level playing field.  It's not an Investment anymore.  It's a game with cheating card sharks.  Heads they win, tails I lose.

Sat, 02/16/2013 - 17:28 | Link to Comment SubjectivObject
SubjectivObject's picture

I suggest everyone open their own G01(d) account.

Do NOT follow this link or you will be banned from the site!