1/11/2015 – Old 401(k)s: out of sight – and out of money (Chicago Tribune)

Jan 12, 2015 Comments Off by

Is there any way that America’s current do-it-yourself retirement system won’t be a recipe for complete and total disaster?

Think about it: First, we run the whole thing through the cheapskate employers. Then we combine those bosses with a predatory financial services industry that routinely pays millions or even billions in criminal fines as the normal course of business. And we toss in the Internal Revenue Service, just to make sure there’s lots of paperwork fun.

So it’s no surprise that a new report from the Government Accountability Office finds this bubbling gumbo of indifference, avarice, red tape and ignorance has stewed up a mind-boggling retirement rip-off called “forced IRAs.” These are Individual Retirement Accounts that are created when you leave a 401(k) account behind at an old job. If the balance is less than $5,000 the employer can dump it into an IRA, and about half of all plans allow this option. To avoid having your old boss or the big financial services firm handling the account engage in any hanky-panky with your neglected nest egg, such as putting all the money into the Outer Slobovian Yak Pelt Futures Fund, the money must go into a low-risk certificate of deposit or money market account.

Read the full article in the Chicago Tribune.

Financial Landing 2015

About the author

The author didnt add any Information to his profile yet