Stop the Retirement Rip-off E-Book

David B. Loeper

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 246

Veröffentlichungsjahr: 2011

Beschreibung

A detailed guide for avoiding the pitfalls of retirement funding In Stop the Retirement Rip-Off, author David Loeper provides the necessary tools for investors to take action and make the most of their retirement plans. It offers a road map for employees to understand the fees and costs associated with their plans; document the excesses in a presentation to management; then organize themselves to protest and, if necessary, bring the documentation to the Labor Department in a complaint. Written in a straightforward and accessible style, this book is filled with sensible strategies for making the most of retirement funds and putting future retirees back on the right financial track. * Filled with strategies that can help employees stand up and secure their financial future * Addresses how to make the most of your money, and your life, after fixing your retirement plan * Outlines a practical approach to understanding your organization's retirement plan and overcoming its potential inefficiencies This important book contains the much-needed information that employees need to plan for retirement and ensure a secure financial future.

Leseprobe

Contents

Preface

Acknowledgments

Introduction: Make the Most of Your Life!

Chapter 1: Why Fees Matter—The Coming “Retirement Plan Sticker Shock”

What’s a Little Fee Between Friends?

Do You Have an Extra $1 Million You Could Spare?

Think of Your Retirement Plan Savings and Expenses Like a Mortgage

Not All Fees Are Bad

The Biggest Expenses Have the Least Value

The Missing Link

Chapter 2: Types of Expenses Dragging Down Your Retirement Funds

Expense Ratios

Revenue Sharing

Custodial Costs

Administration and Record-Keeping Costs

Wrap Fees, Consulting, and Advisory Fees

Mortality and Expense Charges

Surrender Charges

Fund-of-Fund Fees and Life-Cycle Fund Fees

Chapter 3: The Price to Your Lifestyle of Needless Expenses

Uncertainty Is CERTAIN

Soup Lines and Scare Tactics

Uncertainty Is Manageable but Not Controllable

The Comfort and Confidence Zone

Chapter 4: Complaining Without Sounding Like a Complainer

You Can Determine Your Retirement Plan

What Do You Do with These Numbers?

Chapter 5: Rallying Your Troops—Just One Coworker Can Help

Water Cooler/Lunch Room/Happy Hour with Peers

Subordinates and Immediate Superiors

Chapter 6: What Happens If My Employer Ignores Us?

What Is Reasonable?

Paying $75,000 for a Camry?

Contact the Labor Department

Chapter 7: Now That My Retirement Plan Is Fixed, How Can I Make the Most of My Life?

More Bait and Switch

The Benefits of Stopping the Retirement Rip-off!

The Only Thing Constant Is Change

The Markets Are Not the Only Things that Are Uncertain

Chapter 8: Resources, Investment Selection, Asset Allocation, Tools, and Advice

Investment Selection

The Risk of Underperforming Is Higher than the Chance of Outperforming

Asset Allocation

Questionnaire

Scoring

“Age”-Based Investing, “Life Cycle,” and “Target Date” Funds

Life-Relative Allocation

How Do We Know that Fees More Than 0.75 Percent Are Too High?

Using the Appendix A Tables to Estimate the Price of Excess Fees in Your Life

Chapter 9: How Much Is That Guarantee in the Window?

Stealing Your Bucket List from You

Emotions and Reason

Avoid Needless Risk

Chapter 10: Hidden Expenses in Government Union and Some 403(b) Plans

Teacher Abuse

New Regulations, Old Conflicts

NEA and AARP

Chapter 11: Summary

Control What Is Controllable

Appendix A: Lifestyle Prices of Excessive Retirement Plan Expenses

Appendix B: ABC Plan-401(k) Plan Fee Disclosure Form

About the Author

Index

Praise for Stop the Retirement Rip-off

“401(k) plans are costly, inefficient clunkers. Fortunately, there is a way out, and Loeper’s book provides us a great map.”

—Evan Cooper, Senior Managing Editor of Investment News

“If you want to know what’s lurking inside of your 401(k), read this book.”

—John F. Wasik, author of The Merchant of Power and Bloomberg News columnist

“Loeper’s new book shows plan participants how to actually do something about these [401(k)] costs.”

—W. Scott Simon, J.D., CFP®, AIFA®, author of The Prudent Investor Act: A Guide to Understanding

“This book should spur an entire new industry of 401(k) police . . . This is just too important an issue to be ignored.”

—Len Reinhart, Former President of Lockwood Advisors (an affiliate of Pershing) and Past President of Smith Barney Consulting Group

Copyright © 2012 by Financeware, Inc. All rights reserved.

The first edition of this book titled, Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money, was published in 2009 by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Loeper, David B.

Stop the retirement rip-off : how to avoid hidden fees and keep more of your money / David B. Loeper. – 2nd ed.

p. cm.

Includes index.

ISBN 978-1-118-13304-0 (pbk.); ISBN 978-1-118-17784-6 (ebk); ISBN 978-1-118-17786-0 (ebk); ISBN 978-1-118-17785-3 (ebk)

1. Pensions—United States. 2. Banks and banking—Service charges—United States. I. Title.

HD7125.L59 2011

332.6—dc23

2011038885

This book is dedicated to my children, Brian and Megan. I am incredibly proud of both of you for the unique personal qualities you possess. Remember, it is your life and to be happy you need to fearlessly pursue your passions. You have but one life, and it is up to you to make the most of it. Don’t let anyone push you around or tell you how you should live YOUR life!

“I swear by my life, and my love of it, that I will never live for the sake of another man, nor ask another to live for the sake of mine.”

—Ayn Rand, Atlas Shrugged

Preface

Over the last 20 years or so, there has been a major shift in the retirement plans that companies offer their employees. Your parents were probably covered by a pension plan (specifically, a defined-benefit pension plan) where the company guaranteed a certain fixed lifetime income (the “defined benefit”). Upon retirement, this would provide an ongoing retirement paycheck throughout their lives. Such plans have become less and less popular among employers because the guaranteed benefits cost the company a lot of money.

Employers have increasingly switched to 401(k), 457, and 403(b) plans (collectively known as participant-directed retirement plans), which transfer the risk of the ultimate retirement benefit (along with most of the other expenses) to employees. Such plans have been around for quite some time but were initially not very popular. Employers loved these participant-directed plans, though, because instead of the employer guaranteeing a specific benefit (and paying for 100 percent of the cost of the benefit as in many older pension plans), the employer could move both the costs and risk to its employees. Despite this, these types of retirement plans gained in popularity among employees as well, influenced partially by the high market returns some of the mutual funds experienced. Also, many companies that previously could not have afforded the cost or risk of a traditional pension plan could afford to offer a participant-directed retirement plan, since the employees carried the burden of most expenses and all of the risk. Thus, many small companies that never would have had any retirement plan at all started these retirement plans in an attempt to compete with larger employers’ benefit plans. Even though the employee was assuming 100 percent of the investment risk, 100 percent of the retirement benefit risk, and, in many cases, most of the cost in the form of annual contributions (most participant-directed retirement plans have some matching contribution by the employer), the flexibility of these plans ultimately made them attractive to some employees.