square comments on Wall Street Wants to Change the Rules for Your 401(k). It Could Put Your Retirement at Risk.

[–] square@lemmy.zip 2 points 2 months ago* (last edited 2 months ago) (7 children)

Yeah, they're not "doing" anything to our 401(k)s. Allowing riskier funds to be added and reducing the liability for the people offering those funds is scummy but if someone can't be bothered to inform themselves my sympathy is limited. When you start a new plan you get about half a tree's worth of prospectuses, and they are also available online. If you can't be bothered to learn, just dump it into an index tracker or one of those age based ones that slowly transitions from stocks to bonds as you age. If you put a significant amount of money into some risky get-rich-quick scheme: I'm not going to say you deserve it, but I'm not interested in hearing you cry about it.

My plan added a lot of funds a couple years ago. When I was first informed about it I was very interested to see what would be available because up to that point it was very vanilla and some of it sounded like it might work for me. It took about 30 seconds to scan the fees on these new funds for me to laugh and know they were all crap. I still read the rest of it and even aside from the fees they were all junk at best and designed to create a bunch of bag-holders at worst. It's not forced and it's not hidden. Be informed and/or just keep it simple and this won't affect you.

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[–] anon6789@lemmy.world 1 point 2 months ago (4 children)

I'm sure there are genuine WallStreetBets types that would be thrilled to have some of these zanier options available. I've known some reasonably fiscally intelligent people put money into gold, crypto mining funds, supposed collectibles, etc. A company wishing to give people what they want, even if it is stupid, is something that makes sense in that context. I wouldn't put these things quite up to Nigerian prince levels of scammy, but if someone asked me if they were good investments picks, it'd be an easy no from me.

I have no issue with them being barred from being options in 401(k)s, because even if you do know all the ins and outs of trading these things, a 401(k) is a personal pension plan, and since that is supposed to be your personal safety net, I don't support people making that safety not of questionable quality ropes, but I also know people foolish with money are going to do so no matter how foolproof you try to make something. I'm mid 40s and almost 100% in all stocks, which some people would consider overly risky, but I am comfortable with it. If someone wants to be what I consider greedy, it's still within their right to bet on crazy stuff. I'd be mad if 401(k) money could only go into treasuries to be super safe.

There's always risk in every part of the market, and I think we as a society do a disservice to people not teaching better financial literacy early in life when it can have the greatest impact, but what foolish stuff we spend it on should still really only be our own business. With that said though, now that places are auto-enrolling people into 401(k)s, anyone who would auto-enroll someone into a higher than average risk fund is a prick and should be punished.

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[–] square@lemmy.zip 1 point 2 months ago* (last edited 2 months ago) (3 children)

Yeah, different things work for different people. I'm retired and 100% stocks, but that's because I have a pension and my house is paid off and if shit really hits the fan I can just withdraw less, or even zero, for a few years and it'll only impact my luxury and travel spending.

I do think there should be some guardrails, but you're right, they shouldn't be too restrictive, people should have the choice.

You're also right when you say education early in life would be a big advantage.

As for auto enrolling in these funds; that definitely should be prohibited. Until someone makes a selection it should go into secured bonds, just like a settlement fund with a brokerage. That at least gives them the opportunity to become informed, and if they don't take that opportunity, that's on them.

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[–] anon6789@lemmy.world 3 points 2 months ago (2 children)

You certainly sound like you did many things right along the way!

My grandfather taught me about the barebones bits when I got my first job at 16 and he started my Roth for me at the time. I didn't care so much about it then, but by my mid 20s I was doing ok enough to start learning more and take a more active (for a Boglehead!😅) position on things right around the financial crisis, which I think benefitted me as I watched the money I had left untouched and largely forgotten about disappear, but then shortly after got to watch it come back with a vengeance for a long time, so it taught me to ride things out.

I'm about to get my mortgage down in the 5 figures, so that milestone is starting to actually feel in sight. My wife went back to school recently and has a great job now, and my personal investments are worth more than my house at this point, so I'm pretty pleased with myself considering I've never been a high earner.

I see we both picked up downvotes, and I can understand even at what I'd consider a healthy modest net worth, that this is still out of reach for far too many, so I wish people would talk rather than just be silently pissy. I'm not here to gloat about anything or say this rule change is great. Anyone who actually read what I said should be able to get that. But no matter our position, we can almost always find some small way to improve our situation, it just starts with education. Can't please everyone though!

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[–] square@lemmy.zip 2 points 2 months ago* (last edited 2 months ago) (1 child)

I had a little early exposure myself. A math class in junior high had a project where we invested fake money over the semester. When my dad learned of this he opened me a brokerage account and put a little money in so I was doing it for real and took the opportunity to give me some basic education. My results were...mixed, but I learned a lot. (This was the late 80s so he actually had to get on the phone every time I wanted to trade.) So I paid more attention than my peers as soon as I got my "real" job after college, this allowed me to retire as soon as I earned a pension in my late 40s. My wife thought it was weird how much I was into it when we met in our mid 20s but she says she's very appreciative now.

Losing that 6th figure from the mortgage is huge. I remember how good that felt, congrats on the milestone!

I don't know how long you've been on Lemmy but discussing sound strategies for living in a capitalist system (which most of us have no control over) instead of screaming about how everything is designed to make us wage slaves for life and ensure we die pennyless (they may be right, but many people avoid that fate and I would like to be one of them) is always going to pick up some downvotes. God help us if someone decides it's interesting enough to post a screenshot on "the triad" and they decide to hop on their alts and come over. Comes with the territory.

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[–] anon6789@lemmy.world 2 points 2 months ago

Wow, that was great your dad did all that to help you learn! My wife isn't much into it, but she at least knows it's a good thing. When I met her, she was basically broke and had trashed credit and got her car repo-ed. It turned out she had some underlying mental health things exacerbated by 2 significant deaths in the family, so after getting her back on track with that, I helped her get her finances back in order, and then she was able to go back to school and is now doing better than I am! 😅

There are all kinds of investments really. I funded her a secured credit card and supported her while she was recovering and while she was in school and interning, cosigned so she could get a reliable car for all that, and now her credit score is over 800, she got her own new car and gave me her 3 year old one I helped her get, and she's putting a good amount into her retirement savings and pays for all our travel and dining. It's not a luxurious life, but it's more than enough. A lot of people probably would have seen that as a risky investment!

I've been here for 3 years and mainly just talk owls and wildlife rehab, but I was curious what the OPs article was about and wanted to give people a brief overview since I know many respond just to the headline and I wanted to show it wasn't all that sinister. I was just talking to someone else here this morning I kind of feel alienated from just about all political movements, but I acknowledge I live in a capitalist society, so that's the game I'm stuck in right now, so I'm going to play that to the best of my abilities. I don't have to cherish it, but it's the hand I've drawn. Complaining nets me nothing. Making the most of what I do have, in a way I feel is moral, is the best I can do. I've got to look out for myself and my wife because no one else will if things ever go bad. If all my educational and helpful posts haven't convinced people I'm at least a smidge on the decent side, nothing is going to convince them. I'm just here to chat with people, not convert them to some belief system.

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[–] hyperencabulator@lemmy.today 0 points 2 months ago (1 child)

When do worship services end, when the singing starts or whenever you're done with the holier-than-thou, limited sympathy shtick for every man, woman, and child not taking the time out of their attention starved lives to read every 500 page thick prospectus? What about every Form 10-K? Let's just grind the whole dang world to a halt so that everyone can be forced to read all the EULAs, terms of service, company handbooks, and warranty terms for every single thing that touches our lives. "You're a citizen of this city in this state in this country? Ok recite every single ordinance and law of each from memory bro." Most Christians haven't even read the whole Bible, are they still Christians? Are they still called Christians? What about the Bhagavad Gita, did you make sure everyone who offers incense at a shrine has read the entire thing? Do you even speak English if you can't recite the entirety of Chaucer's "Canterbury Tales?" Let's calm tf down. Professional investors don't even read the prospectus. If you want to give ppl the limited-sympathy, r/iamverysmart treatment then mandatory voting would be a more productive place to start but even that has some serious issues too. Isn't there enough suffering and injustice in the world that we don't have to look for reasons to justify misfortune when it happens to others with petty "well if they can't inform themselves I can't be bothered to have sympathy for my fellow human beings" statements?

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[–] square@lemmy.zip 2 points 2 months ago

Given your reading comprehension I would not recommend you read the prospectus.

Like I said, if you can't/won't inform yourself just play it safe with index trackers and age based funds. If you can't/won't inform yourself and still decide to invest in risky high-fee funds, you share at least some of the blame with the people who offered you those funds.

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