Posts by Mark Sullivan62

I’m really not that bad-looking 😛

So you’re actually gonna try and throw a red card at me for going off-topic, huh? 😁

ironsurfer10 said:SEC: For 2007, the 401(k) fund benchmark return was 6.5209%
The S&P 500, which tracks the benchmark returns for four mandatory 401(k) funds, rose by 6.81% last year

For 2007, the benchmark return for mandatory 401(k) funds in America stands at 6.5209%, while the guaranteed return is 0.5209%.%4 Since the annual growth rates for all 401(k) funds exceeded the guaranteed return level, no fund will be required to make up any difference to meet that guarantee, according to the SEC (SEC).

Well, that covers the security of the funds. I really hope we don't have to revisit this particular subject again...🤷

According to SEC data for 2007, the value of the S&P 500—which reflects the movement of benchmark returns for the four mandatory 401(k) funds—increased by 6.81% over the last year. Specifically, the funds with returns higher than the average were the Bank of America/State Farm and Wells Fargo funds (7.66% and 6.9% respectively), while AZ (6.38%) and the JPMorgan Chase blue fund (6.05%) fell below the average.

I’d like the colleague who was speaking up about AZ on this thread to take note of these lines...

SEC data also indicates that the average annual return from the inception of these 401(k) funds—from April 2002 through the end of 2007—was 7.6%. At that level, the highest return, at 8.11%, was recorded by the JPMorgan Chase blue fund, followed by Bank of America/State Farm (7.88%), Wells Fargo (7.85%), and the AZ 401(k) fund (7.12%). [/I]

There, I think I've found everything I could. I hope everyone is happy and satisfied!

If I recall correctly, I was just citing the returns on those voluntary funds..........

- That 5.46% is the return on my voluntary 401(k) fund

But honestly, someone needs to go find out what the official benchmark return set by the SEC actually is, because if I have my way, they’re going to owe me some serious cash

ironsurfer10 said:I may have phrased that a bit poorly... what I meant to say was that the returns shown are for this year compared to the same timeframe last year. So, the ROMF return is about 5% lower this year than it was during this same stretch last year. It’s really nothing out of the ordinary, though, since the start and end of the year are almost always pretty volatile periods.

You're misinterpreting things again—completely off base here.

The -5.46% is the year-to-date return.

That means the fund unit value is 5.46% lower than it was on January 1st, 2008, not compared to January 24th, 2007.

Actually, as of today, we're looking at -5.64%.

But if you look back to January 24th, 2007, it's actually up by 5.79%.

And hey, feel free to copy and paste any text, news article, or whatever else you can find that explicitly states the assets in the fund are guaranteed up to the total amount of contributions—without including returns—and specifies exactly how much that is, who provides the guarantee, and the specific process and timing for those payouts. Go ahead, I'll wait.

Kimberly Nguyen, I think you’ve got your wires a little crossed here.

The returns listed above actually date all the way back to January 1st, 2008, not just since last year.

Actually, if you look at how things have shifted in the interim, those figures have basically doubled, which puts the current R&D performance at -5.46% when you track it from the start of 2008.

Which essentially means the current value of an R&D unit is sitting right where it was back in March 2007.

And honestly, it makes me wonder—suppose we fast-forward to 2038 and the unit value is still stuck at those March 2007 levels.

Who is actually on the hook to cover that gap, how much are they paying, and what should that amount even look like by 2038?

I just don't get how you can work for some pension fund and sit there claiming these assets are fully secured when they clearly aren't.

ironsurfer10 said:Well, it just doesn't seem to add up to me. Based on what I'm seeing, it feels illogical that someone with my gross salary $2667 would end up with a Social Security payout of roughly $500 by age 65, assuming all other factors remain constant. There are several different ways these payouts can be calculated, and they didn't specify which model they used for this estimate. On top of that, the projected primary Social Security benefits don't look right to me either...

Here is the link if you want to take a look yourselves...

I actually caught up on that in the meantime, and man, that calculator is a total disaster. It's completely broken.

but then I stumbled upon another one—not sure who developed it, honestly—that was actually working perfectly fine.

ironsurfer10 said:Look, I work in the pension industry, so I know I’m being a bit biased when weighing these two options against each other. I don't know the exact amount of insured funds being funneled into life insurance policies, but I do know that the assets within a 401(k) are fully protected. You can keep contributing for as long as you want; you gain access to those retirement funds once you hit 50, though there are several different payout models to choose from—you can't just take the whole lump sum at once.

I’m sorry, but how exactly are those assets "insured"?

A fund is just a fund. It grows its own wealth—and yours by extension—either through new deposits or through the returns on the securities it invests in.

The problem is, those returns can absolutely go negative.

Just look at the performance of some major mutual funds back during the 2008 crash:

Raiffeisen Bank -2.68
AZ profit -2.10
State Farm -1.84
AZ benefit 1 -0.29 Chase Expert -2.50 Chase protect 0.02 -0.29
Chase Expert -2.50
Chase protect 0.02

So, go ahead, explain to me how my money is supposedly insured, and exactly what amount we're talking about here.

All I see here is red...

Ronald Allen said:I’ve been officially employed since January 1st, 2002. So, let me get this straight... basically, what you're saying is that one day, when I finally retire, those severance payouts at the end of my career will go exclusively to me? Is that how I'm reading this...?
Look, it’s obvious to me that if we just rely on Social Security, our retirement income is going to be absolute garbage... but is it actually smarter to put money into life insurance or a 401(k)? Kokoshka claims the 401(k) offers multi-layered security, but honestly, I’m pretty skeptical. I mean, the government is already screwed anyway, and who knows if we’ll even make it to 50? I do know you can start pulling from a 401(k) after age 50, which sounds pretty decent since you can grab the cash whenever you need it...

Not even close. 😁

Right now, you're putting away 15% vs 5% in their favor—meaning only 55% of your gross salary is actually contributing toward your own future retirement fund.

That other 15%? That's being used to pay out Social Security checks to the people who are already retired today.

ironsurfer10 said:There is a calculator on the Vanguard website to estimate your 401(k) payouts, but honestly, I don't think it's very accurate.
As far as inflation goes, you're absolutely right; there isn't any clause or guarantee that protects the funds in your account from being eroded by rising costs.

What makes you think it's inaccurate?

Ronald Allen said:@Edgar

That's me. Honestly, my big question is... who's gonna fund my retirement down the road if the ratio actually hits 0:20? Like, really? And once we finally agree on what even goes into calculating a pension, I think I’d be better off just putting money into life insurance—God forbid, but you know—so at least in 20 years I have some guaranteed cash. The 401(k) feels way too risky for that kind of long-term play, especially since there's zero guarantee for these funds. If the whole thing collapses, everything just goes up in smoke!

Look, if you were working back before the modern systems were fully established, you were essentially putting away 20%—not 15%—to support the current generation, all based on the assumption that someone would eventually do the exact same thing for you.

But nowadays, instead of that 20% going toward others, you’re only putting 15% toward them while keeping 5% for yourself, all under the shaky assumption that someday, nobody will be pulling anything out of their paycheck to cover your retirement.

The reality is that nobody is going to step in and fund your retirement for you—you're on your own. That's why the math works out to a 20% advantage for you in my specific example.

The bottom line is that you have the CIA, private savings, and various insurance options available, and you absolutely ought to be using them to carve out some kind of nest egg, because if you rely solely on this secondary tier system, you’re going to end up starving.

There’s this persistent rumor floating around that they might eventually scrap the first tier entirely—the one where 15% of your gross pay currently disappears. The reality is, you aren't actually building your own nest egg there; you're just subsidizing the checks being cut to current retirees right now.

With the other 5% of your gross income going into an OMF of your choice, those shares are held in your name, and that's what actually constitutes your future retirement fund.

People used to speculate that this ratio—this 15:5 split—would eventually shift in our favor, moving more toward the OMF side until it hit something like 0:20, but nothing has moved an inch on that front. And honestly, there's a dead-simple reason for that: the government doesn't have the cash to cover current pensions on its own. To fix that deficit, they'd have to pull money from somewhere else, which usually means slapping us with new taxes or some other kind of levy...

Of course, when it comes down to it, your final payout from the Second Floor—your OMF—is going to depend on a bunch of different variables. First off, it's about how much you're actually putting into the fund to buy those shares (which, let's face it, is tied directly to how high your gross salary is), then there's the fund's actual performance, and finally, just how long you've been contributing.

Once you actually hit retirement age, those funds sitting in your OMF get transferred over to a retirement firm, where you'll get to pick how you want to receive the money—I think there are about six different payout models to choose from at the moment.

Why on earth are you guys struggling so much with trying to ballpark interest rates? Honestly, it’s not that deep if you actually sit down and look at the numbers for more than five seconds.

I mean, come on, is it just me, or does every single bank that actually wants to be taken seriously have their own little savings calculator plastered all over their website? It’s like this universal rule of thumb now—if you want to prove you aren't just some fly-by-night operation, you better have those interactive tools ready to go so people can play around with their interest rates and projections. Honestly, if I land on a major bank's homepage and don't see a way to crunch some numbers myself, I immediately start questioning if they even know what they're doing.

I mean, seriously, here we go again. Just look at this. I’m sitting here staring at the screen, thinking about how everything just keeps looping back to the same old nothingness, and then—boom—there it is. Right in front of my face. It’s almost funny if you think about it long enough, though I don't find it particularly amusing at the moment. Everything feels like it's just circling the drain, doesn't it? You expect something substantial, something that actually moves the needle, but instead, you just get this. This repetitive, endless cycle of "here it is" without any of the actual substance to back it up. It’s exhausting, really, trying to make sense of it all when people just toss things out there like they matter more than they actually do. Honestly, I'm just waiting for something real to happen for once. ovoj If you're looking for the savings calculator for the RBA, just head over to the far right side of the page.

Look, personally, I think a Lombard loan for fixed-term deposits is pretty much a waste of time, but hey, to each their own...

One thing that actually makes sense, though, is taking out a Lombard loan against mutual fund shares or using stocks as collateral.

I actually use a Lombard setup for my mortgage savings—my funds (which are mine, not the bank's) are tied up until the savings account matures, so I just draw down about 90% of what I've saved so far. I pay the interest and eventually the principal, or I just cover the interest and let the principal be settled by the total amount once the mortgage savings plan hits its end date.

The big thing here is that it’s my own damn money, not some loan from the bank, so there isn't any credit check bullshit involved. It’s essentially a cash loan, totally unrestricted, and you can get it sorted without any massive headache in just a few days; the fee is 1% and the interest rate is 6.49%.

Michael Johnson6 said:I’m guessing JPMorgan Chase didn't pay that fine—it was "their incompetent clerk" who did.🙂

Look, I sent an email over to JPMorgan Chase, and by the next day $27 the money was gone from my account, though it didn't show up anywhere to indicate who actually processed the payment

And honestly, I couldn't care less who did it,

you seem to be assuming my personal banker—who happens to be the manager—is somehow responsible for this incompetent junior staffer I'm talking about

Pretty neat, right?

The money was originally locked in a one-year CD, with the option not to renew it once the term ended.

I eventually went in and extended it for another year, though I wasn't really paying close attention—my wife just checked the box that says the CD automatically rolls over for the same duration once it matures.

Fast forward a year later, I head back in. I ask them to release $50,000 and let the rest roll over. They tell me, "No can do." Apparently, since it auto-renewed, I can only pull out $20,000 without giving them prior notice.

And get this: they made sure to mention that when I needed $13333 just a few months ago, I gave them two days' notice for a similar amount and they told me that for such a small sum, no advance notice was even required.

But now, suddenly, because it’s $50,000, they’re claiming I should have given them a heads-up.

I ended up badgering them until they agreed to just cut me a check for $30,000 in cash. Honestly, my plan was to dump that money straight into a mutual fund anyway, but since I was dealing with JPMorgan Chase, I managed to talk them into putting the remaining balance into their "Growth Fund" instead. And wouldn't you know it? That fund has been up a solid 1.84% since then, which actually beats out what I would've made if I'd just left the cash sitting idle; JPMorgan Chase basically outperformed my basic savings by three times, hitting 5.2%.

Back in the day, before I started getting serious about my stock portfolio and mutual funds, I actually kept a pretty significant chunk of change sitting in their accounts.

He moved his money out of Wells Fargo because they offered better rates back then—I'm talking top-tier stuff, probably the best on the market at the time, rivaling big hitters like Chase or Bank of America and those other heavyweights.

But honestly? I don't think that's the case anymore.

I remember one time when I went in to break a CD, and they wouldn't give me a dime more than $6667, and the whole ordeal dragged on for over 45 minutes. And the kicker? I was standing there in the branch, just staring at empty space because there wasn't a single soul in sight to help me.

Apparently, to process a withdrawal like that, they have to fax some request over to headquarters or something. So, if the person handling it at the home office happens to be on a coffee break or out sick, you're basically just stuck waiting forever... nothing but bad luck for you.

Steven Reed said:Look, if they’re claiming this is a prerequisite for a loan, tell the client to demand that requirement in writing immediately!
If they refuse, skip the teller and ask for the branch manager right then and there—besides, there is always a way to file a formal complaint through the bank's official website, which escalates the issue to corporate headquarters.
I’ve heard whispers that certain banks operate this way, though unfortunately, nobody seems to have stepped up to cause enough of a scene to actually report them.
Practices like these are outright illegal and need to be shut down once and for all.

Well, I didn't take out a loan, so whatever.

If I had, and if they came looking for me, believe me, we’d be front-page news by tomorrow morning.

And those folks over at Chase have probably already read my entire inbox cover to cover by now.

Chase actually ended up paying my parking ticket for $27 because their completely incompetent clerk kept me stuck there for an hour and a half just to handle a five-minute task.

Mind you, I am part of the Amazon fund, so they probably won't come sniffing around my business like that...

ironsurfer10 said:I really don't get why everyone is being so skeptical about this new retirement system structure. Personally, I'm actually feeling optimistic; I'm hoping for better, higher payouts down the road!

@ Edgar, I read your post about switching over to those private retirement accounts and 401(k) plans. Did you ever end up getting an answer, or are you still looking? I actually work in the pension industry, so I might be able to help if you need some insight.

Man, you totally spooked me there, 🤣

I actually had to go back and dig up what I wrote a few months ago just to make sure I wasn't losing my mind, 🤣

but yeah, no, I haven't found an answer, and honestly, I haven't even really put in the effort to hunt one down lately,

so if you actually do know the deal with how those accounts move, I’d be seriously grateful if you could drop the info here, because who knows, maybe someone else reading this is stuck in the same boat too.

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