Investors who were paying attention got a cold slap of reality this spring when the progressive think tank Demos released a study showing that the median household could expect to pay more than $150,000 in 401(k) fees over the course of a working lifetime, or about a third of potential investment returns. What's more, about two-thirds of 401(k) investors had no idea that they were paying such fees.
It seems there is little real relief on the horizon.
“If you’re coming out of college with an average number of $20,000 to $25,000 in debt and there’s no job out there, you’ve got a real problem,” said John Quinterno, a researcher who has studied the consequences of student debt.
As early as today, the Republican leadership in the U.S. House of Representatives will be bringing H.R. 4078, the so-called “Red Tape Reduction and Small Business Job Creation Act” up for a vote. Like so much of what passes for legislation in Congress these days, this legislation is more a statement of philosophy than a thought out piece of policy.
Work as a hotel housekeeper isn’t an easy job under any circumstances. For more than 400,000 predominantly female and immigrant workers, the work means lifting heavy mattresses, stretching to clean high surfaces, and often scrubbing bathroom floors on hands and knees. Full-time workers earn just $21,000 a year, on average.
The days between the Fourth of July and Bastille Day on the 14th are known for fireworks on both sides of the Atlantic. This year, more rockets and firecrackers than usual were going off, but they were inside hearing rooms in the British Parliament and the U.S. Congress. Barclays bank announced that it had been fined more than $450 million by regulators from both countries, and its CEO, Robert E. Diamond Jr., and COO, Jerry del Missier, both resigned. The fines were part of a settlement that granted Barclays immunity from potentially worse punishment for its manipulation of interest rates.
How will Marissa Mayer’s pregnancy play out? Will the new Yahoo chief executive find that it’s not so easy to power through a maternity leave? Or will she spend just a few short weeks at home — working all the while, as she promised in an interview — and thus set the bar high for future pregnant executives of Fortune 500 companies? What should the new “it” mom-to-be do?
Every day brings more reminders of the terrible unfairness that besets our country, the tragic reversal of fortune experienced by millions who once had good lives and steady jobs, now gone.
An article in the current issue of Rolling Stone chronicles “The Fallen: The Sharp, Sudden Decline of America’s Middle Class” and describes a handful of middle-class men and women made homeless, forced to live out of their cars in church parking lots in Southern California.
The think tank Demos has been doing a really stellar job commemorating the anniversary of Michael Harrington’s “The Other America” — as mentioned in my poverty charts post yesterday — and their best item so far is this series of beautiful interactive charts illustrating the state of poverty in America:
Fifty years ago, Michael Harrington wrote The Other America, documenting – among the many ravages of poverty – that millions of children in the richest country on earth went to bed hungry every night. His book inspired two Democratic presidents, John F. Kennedy and Lyndon B. Johnson, to launch a war on poverty, then estimated at more than 20 percent of the population.
The movement has drawn some support from financial circles. Wallace C. Turbeville, a former Goldman Sachs banker who now is a senior fellow at Demos, a public policy research organization in New York,submitted testimony last month for the Senate Banking Committee in favor of more banking regulation.
American workers are being ripped off by excessive retirement plan fees — which may force them to work longer or live less comfortably in their golden years, according to a recent study.
For the average US household, the high fees drain about $155,000 from their 401(k) accounts over their lifetimes, the study found.
In one example highlighted in the study, a two-wage-earner household with a median income for their age group contributed an average of 7 percent a year to their 401(k) plan over 40 years.
Hmmm … 401(k) plans can help you save money for retirement, but they many also cost you more than you realize. According to a new study from research firm Demos, the average American couple pay nearly $155,000 in 401(k) fees in the course of building up their proverbial nest egg; wealthier couples could pay nearly $278,000. These fees can reduce 401(k) savings by an average of 30 percent.
With hidden 401(k) fees back in the headlines, financial advisers say that in many cases it just doesn’t pay to leave your money in these plans—especially once you retire or switch employers. Recent findings from Demos, a research group, include this zinger: hidden fees may claim 30% of your savings.
A recent headline in the Los Angeles Times managed to rile both supporters and detractors of the 401(k) plan industry’s opaque and often excessive fee structure. Citing new research, The Times asserted that “401(k) Fees Could Reduce Average Nest Egg by 30%.” There is definitely a problem. But that seems extreme.
Portability, ownership and innovation are three key features of 401(k) plans that make them worth keeping. That was the case laid out by Paul Schott Stevens at a "town hall" meeting in Los Angeles this afternoon. The remarks lay out a defense of the mutual fund-heavy savings vehicle even as the plans have come under attack for the fees charged by mutual fund firms.