Reason #497 that Social Security Privitization is bad: Retirement Savers Make Costly Mistakes.

[rinsd]

updated 6:45 a.m. PT, Mon., May. 12, 2008

NEW YORK - Despite extensive efforts to educate workers about saving for retirement, many employees are not doing a good job of managing their company-sponsored 401(k) accounts, a new study indicates.

The analysis of nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren’t putting enough aside to qualify for the full company matching contribution.

The problems are especially pronounced among young and low-paid workers, according to the study by Financial Engines, a Palo Alto, Calif.-based firm that provides investment advice and managed accounts for defined contribution plans like 401(k)s.

“Unfortunately, our study found that those who need their 401(k) the most look to be benefiting the least,” Jeff Maggioncalda, Financial Engines’ president and chief executive, said in an interview.

More at the link - http://www.msnbc.msn.com/id/24569142/

[Cant trust em]

1. Also, doesn't America overall have a negative savings rate

that being, spend more money than we save? Now people are supposed to change all of those habits magically?

[MercutioATC]

2. Exactly. Contrary to popular opinion, SS isn't a retirement plan, it's a safety net.

Allowing people to independently invest SS money in private accounts (or turning the whole thing into a 401k free-for-all) defeats that purpose.

Unless we are prepared to let some old people starve to death in this country, SS must remain (and be openly promoted) as a safety net...nothing more, nothing less.

[JeanGrey]

3. I started my 401K in 85 all in risky stocks plus company stock.

Over the years I have done amazingly well. I rarely change it, except in 2000 when I moved to overseas stocks.

I find most people mess up their 401K's my using it like a bank account and moving stocks around to get more dividends which in the long run is bad.

We decided long ago once it was saved it was gone.

[AngryAmish]

4. You got lucky

Please diversify. For everyone who is like you there are more who were making a whole lot of money on Enron, then, whoops!

Honestly, especially when older, diversify. I'm in no way a professional but I know it is necessary.

[JeanGrey]

5. I didn't say it wasn't diversified. I just had mostly risky stocks.

Now I have more in stable areas but still a lot in very agressive risk. I've done well. I'm moving it all to CD's shortly.

[AngryAmish]

8. Me misready. Me not so smarty.

[JeanGrey]

10. :-) !!!

[liberal N proud]

6. But the reich wing keeps selling to the public that they can make better decisions

when it comes to their savings.

And the same idiot who can't save a dime, lives paycheck to paycheck will believe them.

If you give some people money they will spend it.

[Cant trust em]

9. The right loves to think that people ALWAYS know best

but sadly, they don't always. I wish it were true that people were always the best stewards of their own destiny.

I'm feeling quite poetic tonight.

[Elspeth]

7. As do the fund managers

And of course, the market has a tendency to "correct".

[Thothmes]

11. Do not in any way support privitization of SS

One, maybe two Americans can successfully manage personnal investment account. SS, while not maybe the most lucrative investment program, has proven over the long haul to provide a solid return on the taxes witheld to support the program. Don't fix it if it is not broke.