DI: and as the hurricane in New Orleans just showed us, nothing in this world is guaranteed.

RT: When I retire in 20 years this hurricane will have no effect on my portfolio what so ever. It will be anciant history and I will still have my capital. Things like 9/11, hurricanes and wars are just static in the larger scheme of things. Over a life time the markets repair themselves rather quickly.

Assuming we’re invincible is what I’m talking about. I completely understand what you’re saying Right, and agree in principle with what you’re saying, but we’re at peak oil right now and the market is gouging…the time to legislate fuel efficiency was in this past Energy Bill. Brazil uses sugar ethanol for something like 50% of their fuel consumption. The people in charge right now came from the energy sector…something to keep in mind down the line in future elections!

DI: Something that irks me about 401K plans is the limited selection of investment options.

RT: The rules have everything to do with who administers the plan. 401k is not a viable option for a large scale private account plan. The regular IRA rules could apply to account that could be held at any of the brokerages. Like the FHA loans that mortage people broker, it’s a government plan monitored by private companies.

Is it 100% clear though that regular IRA rules could apply?

DI: Out of all the ones at my last place of employment, the only one I felt comfortable with was the straight Income Fund…government bonds.

RT: See, the benefit is it really doesn’t matter what you put the money in for the first 30 years because the average growth of the market will eliminate the few loss years. When retirement is about 5-10 out, you just start moving your growth portfolio to an income mode or capital preservation mode and your golden.

These are solid strategies that have been around for decades it’s just that people do not follow them, like day traders. With the government making contributions madatory everyone will have the retirement plans that are usually reserved for the wealthy. The poor will be forced to contribute as they do with SS but now they truely own their wealth and can pass it on to the next generation.

Something that is unaccounted for though is those people who require SS benefits but can’t work.

RT: This is very important because of the population projections which I will talk about later when I get home and get the article. In a nut shell, there are no longer more younger people than older people, we may already be too late to reboot SS into private accounts but it’s better late than never. SS will go away, either by plan now or by collapse later.

I’ve heard this rationale for a decade, but SS had a surplus before it was spent by Congress.

The rules have everything to do with who administers the plan. 401k is not a viable option for a large scale private account plan. The regular IRA rules could apply to account that could be held at any of the brokerages. Like the FHA loans that mortage people broker, it’s a government plan monitored by private companies.

Out of all the ones at my last place of employment, the only one I felt comfortable with was the straight Income Fund…government bonds.

See, the benefit is it really doesn’t matter what you put the money in for the first 30 years because the average growth of the market will eliminate the few loss years. When retirement is about 5-10 out, you just start moving your growth portfolio to an income mode or capital preservation mode and your golden.

These are solid strategies that have been around for decades it’s just that people do not follow them, like day traders. With the government making contributions madatory everyone will have the retirement plans that are usually reserved for the wealthy. The poor will be forced to contribute as they do with SS but now they truely own their wealth and can pass it on to the next generation.

but when a company chooses Vanguard or Fidelity for their 401K plans, the brokerage makes out big time.

As with everything government related, such as FHA, the commissions and feee are fixed and shown at the beginning. Same with Medicare, there is a fixed price for every proceedure. The government would pay the fees to the brokers which would be returned in taxes when the money is withdrawn.

This is very important because of the population projections which I will talk about later when I get home and get the article. In a nut shell, there are no longer more younger people than older people, we may already be too late to reboot SS into private accounts but it’s better late than never. SS will go away, either by plan now or by collapse later.

and as the hurricane in New Orleans just showed us, nothing in this world is guaranteed.

When I retire in 20 years this hurricane will have no effect on my portfolio what so ever. It will be anciant history and I will still have my capital. Things like 9/11, hurricanes and wars are just static in the larger scheme of things. Over a life time the markets repair themselves rather quickly.

I understand that the average citizen might not be ready to make these decisions, but when a company chooses Vanguard or Fidelity for their 401K plans, the brokerage makes out big time. If Social Security gave us a selection of even 50 funds, those brokerage firms would be raking in the dough – and as the hurricane in New Orleans just showed us, nothing in this world is guaranteed.

Like I wrote before, poverty would be virually erased in the next century with the formation of private accounts.

The poverty rate is a threshold I never plan or expect to be on the wrong side of, but the effects of a high poverty and number of uninsured end up sucking away our collective tax dollars. As we’ve seen in New Orleans, when our taxes have to pay for such things, engineering jobs needed to prevent what just happened down there don’t get the funds they need.

Right now I think the federal government is failing to manage the money effectively, and oversight of the private sector is lacking in terms of ensuring profits aren’t being made at the expense of our society as a whole. If these indicators go ignored until 2008, we’ll all suffer from it.