"However beautiful the strategy, you should occasionally look at the results."
--Sir Winston Churchill

In Yo Dreams..... ... =endscreen

Cheap and Easy Self-directed Investment Options

Congress provides US taxpayers with many different tax-advantaged options for retirement saving. Qualified self-directed employer sponsored retirement plans are some of those options. They included 401(k), 403(b) 457 plans, SEP IRAs, SIMPLE IRAs, and others. There are trillions of dollars invested in these plans. This is a good thing for workers and for America.

What Congress didn’t provide was a short list of investments that plan participants could put their money into. That was a mistake. As a result, many plans are load up the a wide range of costly investment products that pay Wall Street billions of dollars in annual fees and, to make matters worse, kick-back some of those fees to the employers in the form of administrative services.

My radical idea is for Congress to create a very short list of three (3), government approved, low-cost, diversified index fund options for participants in qualified self-directed plans – and that is it. Every plan in the country were employees are able to save tax deferred would be required to offer these three funds, and only these three funds in their plan to keep their tax exempt status:

Conservative growth: 25% total global stock index fund + 75% total US bond index fund.
Moderate growth: 50% total global stock index fund + 50% total US bond index fund.
Aggressive growth: 75% total global stock index fund + 25% total US bond index fund.
The default for all employees would be the moderate growth fund. They would then have the option to invest in Conservative Growth or Aggressive Growth. Fund providers would compete for then qualified plan business on cost only because the funds would be all the same. There would be no incentive to compete based on performance of their funds. This will drive investment costs down to only a few basis points, a level enjoyed by participants in the government’s own Thrift Savings Plan (TSP).

There would be no need for middle-men such consultants who earn fees by recommending investment products. It will also end the flow of cash from fund companies back to plan sponsors. Administrative costs would be paid fully by either the employer or employees. All costs would be fully disclosed. Finally, this idea will end most lawsuits against plan sponsors for impudent investment decisions.

The government created qualified self-directed employer sponsored plans with the thought of helping Americans save and investment for retirement. They did not do it so that Wall Street could get rich. Limiting all plans to these three extremely low-cost portfolios is a prudent move for employees and their beneficiaries, and it’s also prudent for employers who wish to have safe harbor from litigation due to bad investment decisions.

Rick Ferri

Somebody Should Do Something...

More food for thought: ... g-bet.html

Sunday Night ... wing-name/

Here’s what President Barack Obama‘s statement on Lawrence Summers‘s decision to withdraw his name from consideration to be the next chairman of the Federal Reserve would have looked like after 40 milligrams of Sodium thiopental:

“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.

Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.......

Relevant ... -treasury/

Coming up outa the dark... ... nts-2013-9

WED... ... aph-2013-9

Thurday... Bummer. Get Used To It. ... l&_r=0

A needed slap up alongside da head. A click whore post.

Huge ... jtEMdKTiSo ... ns-shadow/

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