Have you seen this wording before? Does this look familiar? It should because it is stated on your retirement plan. This phrase is disclosed in each and everyone's 401(K) retirement plan no matter which employee benefit company you're invested in (Fidelity, Principal, Schwab, Hewitt, etc). Most people are truly depending on their 401(K) as their SOLE form of retirement like I was since most Americans won't have much of a Social Security to rely on for their retirement.
But what we should ask ourselves is - Why are we blindly and solely investing our hard earned money into a retirement plan that clearly states it is:
Are we investing in these plans just because they tell us our entire nest egg might be there when we are ready to retire? I wonder how the next generation will feel when they are forced to keep working since their retirement lost 20% - 30% of its value the next time the economy hits a recession or depression.
But a factor we haven't considered is - legal theft. Unfortunately, Most Americans won't be able to retire and will have to work until death...but how would you feel if your 401K plan was legally stolen from you? Legally? It can happen. It HAS happened. Remember the story about the Bear Stearns fund managers Ralph Cioffi and Matthew Tannin who were acquitted by a NY District Court even though they lost $1.6 Billion dollars of investors' money? Remember Bernard Madoff who made off with billions of dollars? Some of these victims' retirements are forever lost. Yes, Bernard Madoff and a few others were sent to prison - but that fact doesn't replace the capital value stolen from investors' retirement plans. And these investors are forced to go back to work during their "golden years"...competing for jobs typically given to teenagers...until they die. The money is forever gone - and there is no law that will replace it.
What would you do if your company's 401(K) plan went bankrupt due to bad investments made by the company that manages your employee benefit plan? We invest in our 401(K) plans religiously but how do we know our money is safe and not being wasted on high risk gambles such as mortgage backed securities that caused our economy to recess in the first place?
We receive account statements, but how accurate are they? I'm sure Bernard Madoff was sending out nicely crafted account statements as well until the walls came crumbling down. Because our 401K is not insured by any government, bank, or any other entity we could lose it ALL due to some mistakes and bad management of so called portfolio managers or investment advisors. And it's not a damn thing you can do about it - when it comes to 401(K) plans that is.
America, do NOT put your faith solely into 401(K)ill plans. Have a backup - own some property. Invest in REAL assets such as oil, metals, land. Get out of debt while you're young and before you retire! There is nothing worse than having to retire while still paying off a mortgage. Do not let the banks legally steal your 401(K) or your retirement by solely relying or trusting on them to have your best interests in mind when investing your money. Have a backup plan so that it won't hurt as much if you become a victim to someone else's greed.