“Who Stole the American Dream?

I mentioned that I am reading Hedrick Smith’s book, Who Stole the American Dream?”  Nearly 30% into the book I came across this bit of data.  “The 401(k) track record is not good.  After twenty-five years, the typical account balance was just $17,686 on January 1, 2011, according to the Employee Benefits Research Institute (EBRI), which tracks 401(k) records for twenty-two million people.  The typical 401(k) nest egg of people in their sixties, who have been in a 401(k) plan for twenty years and are nearing retirement, is $84,469.  The Center for Retirement Research at Boston College puts the figure at $79,000 for those between fifty-five and sixty-five.”

The average American worker is in a heap of trouble.

International ETFs: Are There Any Potential Buys?

Two days ago I ran an analysis on domestic ETFs to see if there were any buying opportunities.  The following is a similar Quantext Portfolio Planner (QPP) analysis of international ETFs.  As readers will see in the “Delta Factor” projection table, there are a few buying opportunities.

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Retirement Rule #5: Understand Employer Retirement Plan

Assuming your employer has established a retirement plan and you are taking advantage of it, there is still another important step in the process.  It is essential you know something about the plan, particularly what options are available for investing.  It is not unusual for a mutual fund family to work out an arrangement with a company to provide a variety of actively managed mutual funds for the employees.  How do you select one or a combinations of the mutual funds?  Be sure to ask if there are any index funds available for investing.  What you need to do is apply retirement rule #3 – Educate Yourself.

Don’t count on the employer knowing what they are doing when it comes to providing investment options.  Assume their management skills are in areas other than investing.  If Vanguard is the fund family handling the retirement funds, consider yourself among the fortunate, particularly if their wide array of index funds are made available to employees.  If you find the options are actively managed funds that have less than a stellar performance, I suggest finding employees of like mind and approach the Human Resources Manager and ask a lot of questions.  See if you can bring about changes in the retirement options.  If this is impossible, make do with what is available and begin your own retirement taxable savings plan.

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