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3 easy ways to boost your 401K

September 23rd, 2010 at 08:29 pm

I had a laugh scanning some of CNN Money today. My favorite giggle inducer was 3 Easy Ways to Boost Your 401K. I'll link to it here, to keep me honest, but I'll tell you what gave me the giggles.

Easy Way 1: Up your contribution. (They gave the example of 6% to 10%). Wow. Mind blowing. Insert two smart-ass remarks here. 1) How EASY will that be when you are living paycheck to paycheck? 2) How do you make a small fortune? Start with a large fortune...

Easy Way 2: Change your asset allocation to get an 8% return. Hah hah. Shall we take accounts? Cash - interest is at best 1%, 10yr treasury bills at 2.7%, bonds at about 3%, dividend stocks at about 2.6%, regular stocks variable between some negative number and 20% if it was a smashing single year. And we apparently blithely forget the "past returns are not indicative of future results". So where is that dependable, sure-fire EASY 8% gonna come from?

Easy Way 3: Work until you are 67. Just don't get a psycho boss, a health issue, or God forbid, be a 50+ year old standing in the unemployment line. But those are EASY to avoid, right?

Its not the advice that gave me the giggles, but the EASY. Investing is worthwhile, but not EASY.

5 Responses to “3 easy ways to boost your 401K”

  1. Single Guy Says:

    Well for the first point, it has been shown that most people waste money in one manner or another - so the real trick is for people to find the wasted money and stop the leaks so they can actually save more.

    The second point was that if you assume things won't stay down forever practially everywhere, then having some diversification is your best bet on not missing out, which I can understand.

    Third point is nice if you can do it. For a lot of people that may not be possible, which is unfortunate.

    Overall, this was presented with the average CNNMoney audience in mind, not the average Joe Six-pack in mind. If it had been, then yeah, it was poorly done. But for their average viewer it probably wasn't that bad.

  2. Joan.of.the.Arch Says:

    That kind of stuff makes me snipe and grump in the most curmudgeonly way. And there is just so much of it on TV.

  3. Broken Arrow Says:

    I find it funny when people take articles like that seriously.

  4. baselle Says:

    single guy - all three of the ways are the (dependable, worthwhile, appropriate, best) ways to boost your 401K. No doubt about it. Its the easy that made me laugh. Easy has the connotation that "you are a total chump if you don't ..." My point is that in each case you are depending on circumstances that the recession has made hard. And an aside here: frankly 10% is nothing; you are doubling from tiny to small.

  5. retire@50 Says:

    I always hate the advice to keep working till 67 or have a part time job after retiring. The whole point is to have enough to retire not to keep working.

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