The 25 Worst 401(k) Plans

[FAVREFAN]

20%? By the way, the market is up 53% from it's low about 13 or so months ago....so....you better catch up!

 

[dannyboy]

That said, I'm guessing FedEx fares poorly because their match absolutely sucks (when it even exists) and not very many employees participate.

i have a question for you. as mrfedex, why would you have to guess at their performance? and you have matching? ups does not match employee contributions......

Wanna know why? Because they can't afford to do so on their skimpy wages. You can't contribute the 15% maximum per week into the plan if you're living paycheck-to-paycheck, so the advantages of having various Vanguard funds from which to choose is mitigated by the fact that you probably have little money with which to invest.

oh so its all about the money you make, and you dont make enough?

It's all about disposable income,

yup, and to you, disposable income is money that you have over and above your bills. problem is, that is not disposable income.

on average, you need to have at least 70% disposable income left over after you meet your needs. and i am talking needs, not things you want. like a bigger car, when a smaller and cheaper one will do just as well.

and when you struggle to hit $50,000 per year at the new FedEx, a 401k is a luxury many cannot afford

luxury? its a matter of putting your future needs in front of your current wants.

even if it's silly not to participate and make some tax-free (for now) money and reduce your obligation to the IRS. When you're making $75,000-plus, it's easier to make smart investment decisions.

back again with the "if i made more, i could afford to save?"

I hate to tell you this, but there are just as many ups drivers living from one paycheck to another as there are fedex employees percentage wise. just cause you make more money does not change the attitude you have. that attitude would keep you from investing even if you made 250 grand a year, as that still would not be enough.

saving for the future is an attitude. and you have yet to get that to sink in.

 

[MrFedEx]

Good points, but it's still easier to save when you make a decent wage. And Satellite Driver is also right when he makes the point that discipline matters, and that people who make 80k can be just as dumb with their money as those who make 50k. The Vanguard Fund has done a very good job of managing my investments over the years, and I've always saved the maximum amount, even when it was tough to do so.

FedEx has never done much in terms of matching, but it's better than nothing. There has been no match during the current fiscal crisis but it's scheduled to return in March, 2010. What UPS people generally don't understand is that we at FedEx essentially have a self-funded retirement plan now that our pension is gone. That means the 401k is pretty much it, unlike Brown, where you get a real retirement plan and a 401k to boot.

The fact remains that a well-paid employee with a real retirement plan (UPS) has more money to invest if he/she so chooses compared to a marginally-paid employee with a pretend pension (FedEx).

 

[TechGrrl]

Yet another problem with our country and it's shrinking unions. Corporate America expects you to fund your own retirement and kick in more and more for health care. All this on the $12 an hour they think is too much to pay you.

And yet people keep buying the garbage the right wing nattering classes keep selling...after today's Supreme Court decision, our corporate masters won't have to pay any attention to the little people at all.

 

[satellitedriver]

Should someone who hasn't traded one stock in 2 years give his opinion on weather the account is good or not. I've traded 2 stocks per week sometimes. There are some in here who probably trade 2 stocks per day. The SMA is useless in this aspect. It only works as a buy and hold. Otherwise you'll need a loan to cover ther rediculously high trading fees.
Getting back to what I was originally saying.....There are a very limited number of funds to invest in. I would like to see a few more. But I do enjoy having the S&P 500, S&P 400 and Russell 2000.

Cool,
You have weathered the storm by jumping from trade to trade, like a rat on acid, paying trading fees in a non tax deferred environment.
I do not "trade" stocks. I have bought stock in the last two years inside, and outside, of my SMA.
I have not put one new penny into my SMA, since 2006. I use the dividend money to purchase new investments.
If I choose to buy, I am only charged $19.99, no matter the amount bought.

 

[satellitedriver]

20%? By the way, the market is up 53% from it's low about 13 or so months ago....so....you better catch up!

20% higher than it was 24 months ago, not from the downturn of 13 months ago.
Very different metric between the two.
By no means am I a stock guru, I have just been building my SMA as one would a mutual fund.
My goal is to create a steady, dependable income stream, for life after Brown.
In the long run Central States will not be able to meet, and fund, my promised 25yr pension, so I am trying to make up-(not catch up)- for the deficit.

 

[1989]

Cool,
You have weathered the storm by jumping from trade to trade, like a rat on acid, paying trading fees in a non tax deferred environment.
I do not "trade" stocks. I have bought stock in the last two years inside, and outside, of my SMA.
I have not put one new penny into my SMA, since 2006. I use the dividend money to purchase new investments.
If I choose to buy, I am only charged $19.99, no matter the amount bought.

If you only make $75,000 - $80,000. Why would one want to defer any taxes at the 15% tax rate? He may be trading his traditional IRA tax deferred or his roth tax-free.

 

[satellitedriver]

If you only make $75,000 - $80,000. Why would one want to defer any taxes at the 15% tax rate? He may be trading his traditional IRA tax deferred or his roth tax-free.

15% over time is big money.
I pray he/she is doing it in a tax deferred or tax exempt Roth account.
The tax rate is based on a sliding scale. Each section of money earned is taxed at a different percentage. This is termed the effective tax rate.
Last year, $120,000 dollars on a simple W2 with no deductions had an effective rate of 13.50%
Your question was why one would prefer to defer taxes.
Good question.
Simple math is the answer. The small percentage saved can compound,and hopefully, be taxed at a lower rate when one is retired and has a reduced total taxable income.

 

[JonFrum]

The mechanics at UPS who are in the Machinists Union (IAM) use to participate in the Teamster-UPS 401(k) plan, but have just switched to their own IAM 401(k) plan.

 

[1989]

15% over time is big money.
I pray he/she is doing it in a tax deferred or tax exempt Roth account.
The tax rate is based on a sliding scale. Each section of money earned is taxed at a different percentage. This is termed the effective tax rate.
Last year, $120,000 dollars on a simple W2 with no deductions had an effective rate of 13.50%
Your question was why one would prefer to defer taxes.
Good question.
Simple math is the answer. The small percentage saved can compound,and hopefully, be taxed at a lower rate when one is retired and has a reduced total taxable income.

If you generate enough income does it really matter? For example I use $15,000 to trade with. I Bought 700 shares of Rambus over the weekend for $21.92 (7 - $22.50 puts assigned to me) Sold them for $25.50 on tuesday after hours. I will keep the $2500 for 15 months before I pay any tax on it. (in the 25% tax bracket I am using the $625 to generate more income) I will holding about $27,000 in taxes that I owe for 2009 for another 3 months.

 

[Old International]

All I know is that I have put retirement 1st, and everything else second. I put 20% a week into the 401K, and I watch the markets to move my money around in my account, ie move the money into the stable fund when the market tanks, and into the market when it's going good. But even doing that, I still buy shares in the market when things are bad, because the shares are cheap, and sooner or later, the market will rebound. I also hold shares in old growth, long time companies, along with stuff that everybody uses, like electrical companies. But even there, you have to watch the market, as a missguided state can ruin your day(think South Cal edision)

 

[satellitedriver]

If you generate enough income does it really matter?

If one does, then not really,but, the vast majority of buy and sell traders never reach that goal.
Paying multiple trading fees, capital gains tax-(which is still 10% higher than normal income tax)- must go into the equation.
I prefer to not pay taxes and let that savings accrue over time.
Again remember, I am only 2 to 3yrs from retirement and must keep a more conservative focus on my investments.

 

[Ms.PacMan]

I looked at the SMA last year and thought the fees were too high to buy into an emerging markets fund incrementally.

If I wanted to fund the SMA with a lump sum I would have had to sell off one of my other investment funds at a low point in the market and didn't like that option either.

In the end last year I opened a taxable brokerage acct. to invest (I bought LVS too, 1989).

Sat and 1989 - you are both doing something right with those kinds of returns.

 

[1989]

In the end last year I opened a taxable brokerage acct. to invest (I bought LVS too, 1989).

I love the volatility of LVS, MGM, CENX. Yesterday was able to scalp 1000 shares of LVS from 16.44 to 17.17 (put a 16.87 stop and a 17.17 limit) My next buy was 15.99 but we didn't see that level. I think next week we see LVS in the upper 14s to mid 15s.

 

[wily_old_vet]

FDX has more in assets than UPS in their 401 plan?

Could that be because they no longer have a pension plan?

 

[Kounter Klockwize]

Should someone who hasn't traded one stock in 2 years give his opinion on weather the account is good or not. I've traded 2 stocks per week sometimes. There are some in here who probably trade 2 stocks per day. The SMA is useless in this aspect. It only works as a buy and hold. Otherwise you'll need a loan to cover ther rediculously high trading fees.
Getting back to what I was originally saying.....There are a very limited number of funds to invest in. I would like to see a few more. But I do enjoy having the S&P 500, S&P 400 and Russell 2000.

I have pretty much the same as you in allocations. Have you ever received any dividends for the true compounding interest. I always look year after year but never see any dividends paid back into my account

 

[TooTechie]

wow, that's a hell of a necropost

 

[thessalonian13]

link

The Teamster-UPS plan has made this list.

FedEx also found its way on the list.

If you had your money in the Russel 2000 S&P 500 and S&P 400 you would have made about 30% on your money last year. That's not too shabby.

 

[brownmonster]

If you had your money in the Russel 2000 S&P 500 and S&P 400 you would have made about 30% on your money last year. That's not too shabby.

My personal performance was 32% for 2013.

 

[upschuck]

If UPS 401k was one the list, it probably was because UPS does not match any amount.