Monday, June 1, 2009

Are 401ks the BEST way to save for Retirement?

The Answer..NO! Its a good start, but not the end all to be all. First of all, Your money will be taxed upon withdrawal of the funds after 59 1/2. Suze Orman and the other experts state that you will be in lower tax bracket at retirement. Really? How does she now what the tax rates will be at that time. Currently, the US Govt has a trillion dollar deficit, it must be addressed. It is addressed via taxes. The money taken out of the 401k plan at retirment will be taxed on the regular income tax brackets. The principal balance will run out in about 9 years.
Next, you are stuck with the investment options provided by your employer. Most employers provide several choices for the employees to select from to fund the 401k plan. Those options may be poor funds or great funds, but how does the average employee know what to pick? How do they protect themselves from downside risk? What happens if the fund does NOT produce the results expected? Can the employee get his money back if the money is lost?
The 401 k plan provides an excellent way to accumulate cash, but it gives the employee limited or zero options in case the market goes south. Why not use a more effecient way to accumulate money for retirement? Why not have an product that can provide tax free growth, guaranteed rate of return, market performance crediting up to around 16%, and Tax Free income at retirment? What is this product? Call 846-846-4901 for more details.

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