Comments on: Review: The Smartest 401(k) Book You’ll Ever Read

By: Steve

Steve — Mon, 25 Apr 2011 22:11:39 +0000

Historically and/or stereotypically, 403(b) plans are pretty bad. They are known for holding annuities inside a tax-deferred investment, which basically combines the worst of two worlds.

The book sounds silly. Does it even consider a plan of maxing out one’s 401(k), then rolling it over once you leave the employer? Maybe that only works for me because I’ve never worked for any single employer for longer than 4 years.

By: ChrisD

ChrisD — Mon, 25 Apr 2011 22:09:49 +0000

Re importance of keeping costs low: I’m reading another book on this topic
(The Long and the Short of it: A Guide to Finance and Investment for Normally Intelligent People Who Aren’t in the Industry
John Kay)

and Kay pointed out that a fairly standard fee is 2% plus 20% of profit. If Warren Buffet had had to pay this, his current fortune of 62 billion would instead be 4 billion for Buffet and 58 billion for the broker!

By: Tom

Tom — Mon, 25 Apr 2011 11:34:38 +0000

agreed, my sister’s 403(b) as a state employee was through Fidelity and must have over 100 investment options. But I guess YMMV.
Interesting that his advice about 401(k)s are to minimize your investment in them. Does Solin at least say they are right for people who just don’t have the time or discipline for individual investing?

By: moom

moom — Sun, 24 Apr 2011 23:50:45 +0000

Criticism of 403(b)’s is weird. For example, a lot of them are run by universities and I’d bet most offer TIAA-CREF as one of the options or the only option (I have a TIAA-CREF 403(b)). I can’t see much wrong with TIAA-CREF as an investment option.