Why It's Time to Retire the 401(k) or at Least Insure it

Stephen Gandel, writer for Time Magazine recently did an article on “Why It’s Time to Retire the 401(k).”

Here’s part of what Stephen said…

“The ugly truth, though, is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves. In the past two years, that has become all too clear. From the end of 2007 to the end of March 2009, the average 401(k) balance fell 31%… In what must seem like a cruel joke to many, the accounts proved the most dangerous for those closest to retirement.”

Yup, he’s got some good points here but does he have a solution? The fact is, nearly half of all Americans have a 401(k). Some financial experts say most Americans don’t contribute as much as they could, thereby leaving free money (from the matching amount employers contribute) on the table. Although that may be true, in this economy I’m guessing some people who put their money somewhere besides a 401(k) are probably grateful they DIDN’T contribute to the max!

Planning for Retirement with 401(k)s
The sad thing about this retirement tool is that most people do not know how to use it properly. The average 401(k) is about $35,000 right now. Not exactly retirement utopia. And the irony is that every time we take our meds, get that surgery, and add a few more years to our lives we make our original retirement strategy a little weaker. The funds might run out before we do.

The 401(k) Solution
In his article, Gandel suggested something that my business partner, George Antone and I have been saying for a long time. He suggested insured accounts might offer part of the solution. George and I have been teaching for years that the proper combination of investments and the right type of life insurance instruments can create tax advantaged environments and make guaranteed returns a lot easier.

The ERISA Industry Committee (ERIC) is a group that represents our nation’s largest employers. In Gandel’s article he states that they have proposed to the government, a system of exchanges that allows individuals the ability to buy a guaranteed retirement account on their own. And… I believe this type of retirement plan flexibility will require the use of insurance instruments to be effective.

When American’s stop counting on their employer or Uncle Sam to plan their future, they will finally see the benefits of long-term financial planning. There is a place for 401(k)s but that place is inside a solid, well thought out, wealth building strategy.

If you’re tired of depending on anyone else to plan your retirement, join us at our next Infinite Wealth System workshop and take charge of your financial future!
Here’s Stephen Gandal’s Time article.

Learn more about our Connector Coaching calls and start taking all your legal tax deductions and planning a retirement strategy that will last as long as you do.

Have a prosperous day.

Gabby Huguenin
Wealth Coach
CEO Wealth Classes Coaching, LLC
www.WealthClassesCoaching.com
888-888-3612

P.S. If you are planning for retirement, looking at saving tax money, or just trying to create a new plan for total financial freedom, call me! There is no charge for your initial consultation. Watch this video to learn how to grow your money in a tax advantaged environment:

Disclaimer:
This information does not constitute a complete description of all or any one aspect of financial planning. There is no offer to sell or buy any financial product in this video or on our website. Please consult with a qualified financial, legal and/or tax professional before investing or modifying any aspect of your taxes, assets or finances. This information is strictly educational.