What You Do With Your 401K Is Not Their Business
Every article I read as of late, regarding 401K’s, seems to be addressing the same issue: The pull out (“leakage”) of 401K money to pay bills and how bad that is for those people. A deeper look needs to be taken into this matter and figure out why people are removing money and if it is better than the alternative which may be bankruptcy.
I agree with the fact that it has become a huge topic as Dan Kadlec of Time Business & Money writes “One in four American workers with a 401(k) or other defined contribution plan tap their retirement account for current expenses, a new study shows. This “leakage” reached $70 billion in 2010, equal to nearly a quarter of all contributions that year.”
This could be for a couple of reasons:
- The economy is in the tank, according to ww.rt.com, 41% of our population is unemployed in this country yet, the talking heads are saying keep your 401K so there is something to retire on. What on earth are they talking about? These people are just trying to get through tomorrow much less ten to twenty years down the road. Bills must get paid and people are trying to save their credit, their homes, and their transportation. Then you have those who are borrowing to pay for their kids’ college tuition. Now, this may or may not be a smart idea, but parents know between the cost of tuition and the interest rate of a loan their kids may be walking out of school bankrupt.
- Little faith in the 401K system. American’s are not ignorant. They know if their 401K is not making them money, they have eyes they can see this. They also have math skills and can figure out the basic numbers of what is better, withdrawing the money or leaving it at risk.
We hear this all too often, “Don’t take money from your 401K, you will lose 10% and never make enough anywhere else to get it back.” They actually make it sound as if we are doomed to be broke during our retirement years without this 401K. Again, a better concern would be why there is a penalty on your money.
It makes a person wonder who these talking heads are looking out for, the client or themselves. If money is taken out of an account it affects their commissions. However, it may be in the best interest for that client to give up a little (pay the penalty) to save their house, car or credit now.
Dan also writes, “Thirty years ago, most workers had a guaranteed pension at retirement; today, the $3.5 trillion in self-directed 401(k) and other defined-contribution plans is the primary retirement account of most Americans.” Even Dan seems to know people did not invest in the market and that 401K’s were born in the early 80’s. If you want to know where those pensions were put you may want to read my blog on the Wall Street Scam!
The bottom line, American’s need to start looking for a solution to their 401K problems and not settling for what they are told to do by talking heads. There are solutions out there and those solutions provide tax-free growth, no penalty for access to money, access to the money at any time for any reason, tax-free use throughout retirement and guaranteed growth – no risk. There is one product and one process that does this – the Infinite Banking Concept. That one process is the answer to this whole article. Had these individuals been using this concept they would have been able to access that money without penalty and still had a retirement in the end. They would not have been giving up one for another, best of both worlds as people say.
It’s time to begin looking out for ourselves. If you are ready please call and find out more regarding the Infinite Banking Concept.