About a year ago, one of our trusted advisors had recommended we read the book called, “The Great Wall Street Retirement Scam” by Rick Bueter. And we are glad we did.
Rick did a spectacular job of outlining the history on how American’s were fooled into having to use defined contribution 401k plans instead of defined benefit pension plans. Overnight, it required ordinary skilled workers like carpenters and electricians to be pension managers as they were now asked to invest the same retirement savings that professional pension fund managers took care of before. Bueter drove home the point that Wall Street was the ultimate benefactor as millions of Americans are literally forced to invest their 401k plans into mandatory funds and stock plans, where Wall Street ends up winning whether they go up or down.
A recent article in Smart Money came out last week adding more fuel to Bueter’s fire. The article was titled, “The Big Business of 401k Plans” by Ian Salisbury and poked holes in the current 401k system by opening consumers eyes to the billions of dollars in annual fees that these investment banks are making off of them. Don’t get me wrong, the banks should make money and turn a profit. That is all part of free enterprise. But the problems arise when most 401k plans only have a limited amount of options. And in many cases, no matter where the consumer allocates their funds, the bank makes huge profits, just like a monopoly.
We encourage each of our readers to review this must read article – Big Business of 401k Plans
Annuity Think Tank, The 401k Swindle