Author Topic: Complainy Pants Salon Article  (Read 6395 times)

SugarMountain

  • Pencil Stache
  • ****
  • Posts: 716
Complainy Pants Salon Article
« on: December 18, 2014, 01:15:13 PM »
I generally lean liberal and used to read Salon a lot, but this is really complainy pants:
http://www.salon.com/2013/08/06/big_finance_lied_401ks_will_not_save_aging_americans_partner

Even worse are the comments on facebook.  Loads of "whoa is me, no way can I save any money" comments.

slugline

  • Handlebar Stache
  • *****
  • Posts: 1172
  • Location: Houston, TX USA
Re: Complainy Pants Salon Article
« Reply #1 on: December 18, 2014, 01:28:32 PM »
Bad 401K plans are a real thing, unfortunately. See this recent thread, for example:

http://forum.mrmoneymustache.com/welcome-to-the-forum/feeling-sorry-for-folks-with-shitty-401k403b-plans/

Scandium

  • Handlebar Stache
  • *****
  • Posts: 2223
  • Location: EastCoast
Re: Complainy Pants Salon Article
« Reply #2 on: December 18, 2014, 01:46:18 PM »
Nice one!
I love how the choice is between people saving money themselves (impossible) and "magic government pensions with money from nowhere". Sure we could double the social security payouts, we'd just need to take 24% from people's paychecks instead of 12%. The money has to come from somewhere.

Also nice use of scarewords.
The mutual fund industry. Everyone knows an industry is evil right?
oh, and they have a lobbying arm?! More evil!

"$2 billion in revenue" They had revenue! They must be evil. And such a high number! This says absolutely nothing without a fee percentage.

401ks are bad because your company choose for you. But IRAs are worse because people make bad choices and pay even more? eh.. ok

Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1536
  • Location: Canada
    • My Necronomicon of Badassity
Re: Complainy Pants Salon Article
« Reply #3 on: December 18, 2014, 01:50:55 PM »
401ks are bad because your company choose for you. But IRAs are worse because people make bad choices and pay even more? eh.. ok

Hahaha...  Oh, that's priceless!  That seems to be the general idea, doesn't it?

People to me:  "Screw you, you get a pension!"
Me:  "No, fuck you--I get 10 grand deducted every year when you get a full paycheck and extra IRA (RRSP in Canada's case)  room.  ...But you spent it all instead of putting it in there, didn't ya?"

SugarMountain

  • Pencil Stache
  • ****
  • Posts: 716
Re: Complainy Pants Salon Article
« Reply #4 on: December 18, 2014, 02:42:59 PM »
Bad 401K plans are a real thing, unfortunately. See this recent thread, for example:

http://forum.mrmoneymustache.com/welcome-to-the-forum/feeling-sorry-for-folks-with-shitty-401k403b-plans/

Sure, there are definitely issues with 401ks, but the gist of the article was that saving for your retirement was impossible.  My beefs with 401ks are that you don't just get total freedom of investment choices.  For example, Fidelity runs my company's 401k.  Why can't just invest in any Fidelity fund?  Our choices are so-so.  But, I'm willing to suck it up for the 3% match and tax benefits.

UnleashHell

  • Walrus Stache
  • *******
  • Posts: 6695
  • Age: 52
  • Location: Florida
  • Chapter IV - A New ... er.. something
Re: Complainy Pants Salon Article
« Reply #5 on: December 18, 2014, 03:11:48 PM »
Most people only need to put in 5% and get a match plus a tax break.

So for every 80 bucks they put in they get 200 in the account.

And then bitch about 1% + fees.

 You get a break in cash into your retirement fund an NOW you are a fucking financial whizz. How about you put more money in and 1% ain;t gonna kill ya.



galliver

  • Handlebar Stache
  • *****
  • Posts: 1891
Re: Complainy Pants Salon Article
« Reply #6 on: December 18, 2014, 04:00:32 PM »
You know, I think underneath the "oh noes they make money" and "there's no possible way anyone can save" is a really good point:

MOST people are pretty terrible at long-term planning and decision-making. MOST people *will* take the instant gratification. MOST people will experience hedonic adaptation and not see how they can possibly save more money for retirement or anything else. MOST people will procrastinate until they're 50+ to start saving.

You can talk all day about how things should be different, and I'll agree with you...but they aren't. They never were. Traditional retirement plans are: work till you drop, or rely on your children. Then there were Social Security and pensions. Retirement plans with, effectively, mandatory contributions. But people wanted more freedom (I guess?) and so 401k's and IRA's came about/became the norm. The problem with freedom is that most people think they want it, but it's bad for them. Most people will still (metaphorically) gorge themselves on (metaphorical) candy and then complain about the (metaphorical) stomachache.

MgoSam

  • Magnum Stache
  • ******
  • Posts: 3643
  • Location: Minnesota
Re: Complainy Pants Salon Article
« Reply #7 on: December 18, 2014, 05:09:16 PM »
This was an utterly atrocious article. There are legit complaints about how 401k's are managed, such as their expense ratio, but guess what, you don't get anything if you don't put anything. If you are about to retire and only have $12,000 in savings, that's on you!

If you're company is offering a 5% match and you don't take it, but then don't look for other options, then you have no one to blame but yourself, though I pity that your parents didn't instill better financial literacy.

This doesn't surprise me as the vast majority of Americans don't know what their APR is on their credit card, or many other useful tidbits (though I suppose knowing your APR is useless if you always pay on time or don't own a credit card).

HoneyBadger

  • 5 O'Clock Shadow
  • *
  • Posts: 58
Re: Complainy Pants Salon Article
« Reply #8 on: December 18, 2014, 06:19:56 PM »
I love how the choice is between people saving money themselves (impossible) and "magic government pensions with money from nowhere". Sure we could double the social security payouts, we'd just need to take 24% from people's paychecks instead of 12%. The money has to come from somewhere.

Or maybe they'll level a "wealth tax" on the tax-deferred accounts of those that sacrificed to save for their retirement.

It's hard being an ant in a world of grasshoppers!

voidmain

  • 5 O'Clock Shadow
  • *
  • Posts: 20
  • Location: Bay Area
Re: Complainy Pants Salon Article
« Reply #9 on: December 18, 2014, 06:29:40 PM »
I read the article and the comments and this one stuck out;

@JB71

Let's look at your claim. Let's say each year I make just enough money to have enough left over to either invest in a 401k OR buy an IPod, an IPad and a large screen teevee. If I buy one of each every year, that would amount to about $3,000 a year (including internet and cable fees).

Now let's say that, alternately, I live a monastic existence and sock all that money away. After 30 years of scrimping and saving all of my discretionary income, I can look forward to a "whopping" $150k (assuming a 5 percent annual return). That's a lovely amount, but it doesn't come close to financing a retirement. It also assumes that over those 30 years, I've had no emergencies that I needed to touch that money to deal with. Good luck with that.

Considering the fact that poor people don't tend to buy all those goodies every year, the fact is that many people don't even have that much to invest. So, you can wag your finger and feel superior if you want, but that doesn't change the fact that retirement for Americans is getting increasingly out of reach.



So according to the poster, not buying an iPad, iPod or big screen tv is first of all monastic and secondly stupid, because saving that money yearly will only get you $150k after 30 years.  So it's easy to see why buying those things makes sense and instead of saving it.

It's insane how people justify wanting to spend, spend, spend...

Also the math doesnt even work - you depending on how you calculate it, 3k/year over 30 years at 5% return is like 200-210k, but no way is it 150. Not to mention, 30 years is short for non-FI (even starting at 30 you have 35-37 years)
« Last Edit: December 18, 2014, 08:18:11 PM by voidmain »

r3dt4rget

  • Stubble
  • **
  • Posts: 182
Re: Complainy Pants Salon Article
« Reply #10 on: December 18, 2014, 09:06:24 PM »
If it's one thing I know about saving for retirement, complaining and whining won't get you there.

zephyr911

  • Magnum Stache
  • ******
  • Posts: 3628
  • Age: 41
  • Location: Northern Alabama
  • I'm just happy to be here. \m/ ^_^ \m/
    • Pinhook Development LLC
Re: Complainy Pants Salon Article
« Reply #11 on: December 19, 2014, 09:38:57 AM »
OMFG, I had to dive in there...
Quote
Jeffafa
9 minutes ago

Staggeringly negative and misleading article.

I'm 36 and had my entire net worth wiped out by a divorce at 30, which was disheartening after saving since college. Am I stuck working till 70 and retiring on a pittance? NO! I started over, directed 5-10% to my 401k, added an IRA when I could afford to, and the pile is now over six figures with matching funds. I don't make much over the average, and I'm not exceptionally frugal. It just takes consistency and time.

In addition to the tax-deferred accounts, I swallowed my pride and got some roommates to help pay for my average house, step 1 toward building a rental portfolio. Now I'm married and living in a new place, while the old one builds equity. Point: diversification is key.

I won't be retired at 40, but I *will* be free to do the work I choose, when I choose, making every hour more rewarding and enjoyable. Ten years from ground zero to near-complete freedom - and you think people can't do it in a 40- or 50-year working career?

I would submit that the problem is not lack of good investment options, but lack of perspective.

Too many people in the US take their expenses for granted - luxuries as needs, location and cost of living as obligatory and unavoidable, and conformity through consumption as the highest virtue. A little self-evaluation and open-mindedness, and we can find that saving enough to dramatically change our own future is not only easy but fun, exciting, and rewarding.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8805
  • Registered member
Re: Complainy Pants Salon Article
« Reply #12 on: December 19, 2014, 03:47:22 PM »
Loads of "whoa is me, no way can I save any money" comments.


davisgang90

  • Handlebar Stache
  • *****
  • Posts: 1266
  • Location: Roanoke, VA
    • Photography by Rich Davis
Re: Complainy Pants Salon Article
« Reply #13 on: December 19, 2014, 05:40:07 PM »
OMFG, I had to dive in there...
Quote
Jeffafa
9 minutes ago

Staggeringly negative and misleading article.

I'm 36 and had my entire net worth wiped out by a divorce at 30, which was disheartening after saving since college. Am I stuck working till 70 and retiring on a pittance? NO! I started over, directed 5-10% to my 401k, added an IRA when I could afford to, and the pile is now over six figures with matching funds. I don't make much over the average, and I'm not exceptionally frugal. It just takes consistency and time.

In addition to the tax-deferred accounts, I swallowed my pride and got some roommates to help pay for my average house, step 1 toward building a rental portfolio. Now I'm married and living in a new place, while the old one builds equity. Point: diversification is key.

I won't be retired at 40, but I *will* be free to do the work I choose, when I choose, making every hour more rewarding and enjoyable. Ten years from ground zero to near-complete freedom - and you think people can't do it in a 40- or 50-year working career?

I would submit that the problem is not lack of good investment options, but lack of perspective.

Too many people in the US take their expenses for granted - luxuries as needs, location and cost of living as obligatory and unavoidable, and conformity through consumption as the highest virtue. A little self-evaluation and open-mindedness, and we can find that saving enough to dramatically change our own future is not only easy but fun, exciting, and rewarding.
  Bravo!  Well Said!

tofuchampion

  • Bristles
  • ***
  • Posts: 373
  • Age: 36
  • Location: Wilmington, NC
    • MadeByMarilynM
Re: Complainy Pants Salon Article
« Reply #14 on: December 19, 2014, 05:41:11 PM »

Hey It's Me

  • Pencil Stache
  • ****
  • Posts: 715
    • Moe's Journal
Re: Complainy Pants Salon Article
« Reply #15 on: January 02, 2015, 08:11:38 PM »
Quote from: salon
Not only did they [401ks] not make us millionaires as self-appointed pundits like Mathisen promised, they left very many of us with very little at all.

A simple FV calculation showed that if you maxed out your 401k each year, even with a conservative 4% average annual return between the ages of 35 and 65, you'd still retire a millionaire. Please, screw off Salon.

NumberJohnny5

  • Pencil Stache
  • ****
  • Posts: 626
Re: Complainy Pants Salon Article
« Reply #16 on: January 03, 2015, 01:20:05 PM »
I read the article and the comments and this one stuck out;

@JB71

Let's look at your claim. Let's say each year I make just enough money to have enough left over to either invest in a 401k OR buy an IPod, an IPad and a large screen teevee. If I buy one of each every year, that would amount to about $3,000 a year (including internet and cable fees).

Now let's say that, alternately, I live a monastic existence and sock all that money away. After 30 years of scrimping and saving all of my discretionary income, I can look forward to a "whopping" $150k (assuming a 5 percent annual return). That's a lovely amount, but it doesn't come close to financing a retirement. It also assumes that over those 30 years, I've had no emergencies that I needed to touch that money to deal with. Good luck with that.

Considering the fact that poor people don't tend to buy all those goodies every year, the fact is that many people don't even have that much to invest. So, you can wag your finger and feel superior if you want, but that doesn't change the fact that retirement for Americans is getting increasingly out of reach.



So according to the poster, not buying an iPad, iPod or big screen tv is first of all monastic and secondly stupid, because saving that money yearly will only get you $150k after 30 years.  So it's easy to see why buying those things makes sense and instead of saving it.

It's insane how people justify wanting to spend, spend, spend...

What sticks out for me (other than the faulty math), is how emergencies will ONLY happen if you have money saved for them. Specifically this part:

Quote
Now let's say that, alternately, I live a monastic existence and sock all that money away.... It also assumes that over those 30 years, I've had no emergencies that I needed to touch that money to deal with. Good luck with that.

I know that an apple a day keeps the doctor away, but this seems a bit ridiculous.