Category: Retirement Plan Alternative

Are you putting your retirement savings in prison?

October 17th, 2013 by Pamela Yellen | 1 Comment

Ted Benna is known as the “Father of the 401(k).” In the late ‘70’s, he worked as a consultant to business owners whose main agenda was “How can I get the biggest tax break, and give the least to my employees, legally?”

Tax nerd that he was, Benna discovered an obscure part of the tax code – section 401(k). Voila! By 2012, nearly 75% of all company pension plans had disappeared!

What does Mr. Benna say about his beautiful 401(k) baby today?

If I were starting over from scratch today with what we know, I’d blow up the existing structure and start over!”¹

Uh oh.

Per the US Senate Committee on Health, Education, Labor, & Pensions: “After a lifetime of hard work, many seniors will find themselves forced to choose between putting food on the table and buying their medication.” The U.S. Census Bureau says the average value of 401(k) accounts of pre-retirees between 55 and 64 is only $170,645; the average value of their IRAs is only $147,345. And half of all those close to retirement age have less than $50,000 in these plans.

Something went horribly wrong. Actually, several things went horribly wrong, not only with 401(k)’s but also their kissing cousins: IRA’s, Roth Plans, 403(b)’s, SEP-IRA’s and so on.

And the problems with these government-controlled plans are in these five key areas:
[Read more…] “Are you putting your retirement savings in prison?”

1. New Wealth-Killing Revelations About Your 401(k) and IRA

I'm going to retire and live off my savings...

While doing research for my new book (The Bank On Yourself Revolution, due out on February 11), I came across four stunning new revelations about 401(k)s and IRAs. If you have money in one of these plans, I urge you to read this exposé to find out how to protect yourself from making costly mistakes.

2. Is Bank On Yourself “Snake Oil”?

3 Steps to a Financially Stress-Free Life

July 29th, 2013 by Pamela Yellen | Leave a Comment

Has financial stress become the new normal for most of us?

If you’re feeling financial stress and worry, you’re not alone. But it’s not inevitable. You don’t have to panic about your present or agonize about the what-ifs in the future. In this blog post, I’ll share three time-tested keys to achieving financial peace of mind, so you can weather whatever curve balls life throws at you…

Step 1: Have a Sizeable Liquid Rainy Day Fund

Life happens, and we should all expect the unexpected. Without safe and liquid cash reserves, how will you cope with:

A medical emergency?
Disability?
A broken major appliance or leaky roof?
Loss of a job?
A family member needing assistance?

Without a sizeable liquid rainy day fund, you may be forced into selling or liquidating your nest egg assets prematurely—the investments you planned on keeping over the long haul. When this happens, the timing is often terrible. You’re at the mercy of current market conditions and forced to sell at the worst possible time.

Honestly? That’s how the majority of people live. Their fortunes depend on Wall Street, the Dow Jones, the next paycheck coming in. (Great Grandma at least had that old jelly jar filled with cash!)

But what if your financial pyramid looked like this?

Important 401K and IRA Advice

July 11th, 2013 by Pamela Yellen | 2 Comments

While doing my research for my new book (The Bank On Yourself Revolution, to be published on February 11), I came across four stunning new wealth-killing revelations about 401(k)’s and IRA’s.

If you have money in one of these plans, I urge you to read this advice about your 401K and/or IRA today to find out how to protect yourself from making costly mistakes:

Wealth-Killer #1: The fees you’re paying may be much higher than you think

I’ve written in the past about how Congress passed a law in 2006 protecting employers from liability as long as they automatically put employees’ contributions into certain types of mutual funds, known as “default” investments.

Target-date funds (TDF’s) have emerged as the default investment of choice. Unfortunately, they’ve also proven to be very risky AND they’re among the most costly mutual funds you can buy. (Would it surprise you to learn the mutual-fund industry lobbied Congress to get that law passed and make sure their interests were protected? Didn’t think so.)

So last month, an article in Forbes (“The Trouble With Target Funds”) revealed that, according to the prospectus of one popular target-date fund, your projected fees and expenses for each $10,000 invested is $2,478 over a ten-year period (assuming it grows at 5% a year).

That’s 25% of your savings!

So, if you had $300,000 in that fund for ten years, you’d get soaked for – are you sitting down? – $74,340! (And that’s just over a ten-year period!) It also doesn’t take into account all the other fees you’re charged in a 401(k).

The author of this article concluded…
[Read more…] “Important 401K and IRA Advice”

Why I swore I’d never write another book

June 27th, 2013 by Pamela Yellen | 2 Comments

I absolutely did not want to write another book… but I wanted to share with you what changed my mind.

Yup, after months of brain-numbing work and putting in hours that could kill a horse, I just sent the manuscript of my second book off to the publisher. The title is, The Bank On Yourself Revolution: Fire Your Banker, Bypass Wall Street and Take Control of Your Own Financial Future.

It will be published early next year, and there is no doubt in my mind it will hit all the best-seller lists, just like my first book. (Of course, I’ll let you know how you can get an autographed copy.)

This book is incredibly well documented and will blow the lid off the “conventional financial wisdom” and expose it for what it really is – a way for Wall Street and the banks to continue to line their pockets at our expense.

Writing my first book in 2008 was one of the most painful experiences of my life. It was all-consuming of my time and energy for nearly a year. I swore to my husband Larry that I would never, ever again set myself up for the stress of looming deadlines, the agony of the editor’s red pen, and the loss of so many weekends and so much sleep. Nope. Never again.

Then the book hit the best-seller lists. (That was nice and softened the pain a bit.) And we got tremendous response from folks who were thrilled to have discovered Bank On Yourself. (That was even better.)

Are you ready to have the peace of mind of knowing at least a chunk of your nest-egg is in a plan that goes in only one direction…

And has never had a losing year in over 160 years? You can know the guaranteed value of your Bank On Yourself plan at any point in time before you decide to move forward. To find out what your numbers would be, request your FREE Analysis, if you haven’t already.

But then the backlash started. (Not fun at all.)

Is risk a four letter-word?

June 7th, 2013 by Pamela Yellen | 1 Comment

Have you ever filled out one of those “what’s your risk tolerance” questionnaires to determine how much money you can accept or tolerate losing in the market?

Brokers are now required to have you do this. Or you may have filled out a self-scoring one online. You know, ones that ask questions like what would you do if the market dropped 10% or 20%?

Well… it turns out these questionnaires are “unhelpful at best and harmful at worst,” according to experts on investing and the psychology of risk.¹

Here’s why…

These questionnaires assume your risk tolerance is an integral part of who you are and no more changeable than your IQ or shoe size. But nothing could be further from the truth.

Researchers have shown that your tolerance for risk varies constantly, depending on literally thousands of factors. Studies show how much risk you’re really able to tolerate is associated with many factors such as: [Read more…] “Is risk a four letter-word?”

Why you need Dow 32,000 today

May 15th, 2013 by Pamela Yellen | Leave a Comment

I have an important question to ask you, and taking a moment now to answer it may rattle you…

When do you think the Dow will go to 32,000?”

Does that seem like a crazy or dumb question? It’s not. I’ll explain why in a moment, but I have another question for you first:

What would you consider to be a minimum acceptable annual return on your money for taking on the nerve-wracking risk and volatility of the stock market?

5%? 7%? Maybe even 10%?

Over the past two years, we surveyed tens of thousands of people about this, and most responded that they wouldn’t consider risking their money in the market unless they could get a 7% or more annual return.

But let’s say you only insisted on a 5% per year return…

How will these 3 financial surprises affect you?

April 22nd, 2013 by Pamela Yellen | Leave a Comment

There have been three recent surprising revelations I urge you to pay close attention to, if you have any money invested in the stock market and/or you have an IRA, 401(k) or other government qualified retirement plan…

1. The ugly truth about the stock market’s new record highs

Take a look at the chart below which reveals how, when measured in real purchasing-power terms, the S&P 500 Index is nowhere near its March 2000 high. In fact, the index would have to increase by another 32% today, just to get you even (in real dollars) with where you were more than 13 years ago:
Your Retirement Plan Powered by Wall Street-Fast Graph
Even if you look at the total return of the S&P 500 (including reinvested dividends), the real (inflation-adjusted) purchasing power of your investment remains negative after 13 years. And this assumes you have no fees, commissions or taxes, which, of course, will take another big bite out of your savings.

2. Long-term investors received only HALF the return of the S&P 500 [Read more…] “How will these 3 financial surprises affect you?”

Retirement confidence hits record low

April 3rd, 2013 by Pamela Yellen | Leave a Comment

Here’s what to do…

Americans’confidence in being able to retire comfortably is at a record low, despite the economy showing signs of improvement and the stock market hitting record highs.

Senior Worker - Coffee Server — To compensate for their lack of retirement funds, more people are planning to postpone retirement.

That’s according to the just-released annual study by the Employee Benefit Research Institute.

The statistics are bleak:

57% of those surveyed report having less than $25,000 in total household savings and investments. Only 24% reported savings of $100,000 or more
Only 24% are very confident they’ll be able to live comfortably in retirement
Only half said they could definitely come up with $2,000 to cover unexpected expenses within the next month

How long do you think $25,000… or even $100,000 in savings will last a person in retirement? On average, a man turning 65 this year will live another 20 years, and a woman that age will live another 23 years.

To compensate for their lack of retirement funds, more people are planning to postpone retirement. That strategy may not work very well, since more than 47% of current retirees were forced into retirement sooner than planned.
[Read more…] “Retirement confidence hits record low”

Why do so many people prefer THEIR facts to THE facts?

February 22nd, 2013 by Pamela Yellen | 2 Comments

As Mark Twain noted…

Most people’s egos prefer THEIR facts to THE facts.”

And I’ll bet you can think of several people who are guilty of that right off the top of your head, can’t you?

One of my mentors, Dan Kennedy, also noted, “People are quick to dispense advice on any subject, regardless of their qualifications. Most people don’t even distinguish between ‘opinion’ and ‘knowledge.’ That’s why you must.”

When it comes to Bank On Yourself, there’s a lot of opinion being dispensed as fact… and I thought I’d help you sift through three common misconceptions about Bank On Yourself in this blog post…

Myth #1: The commissions paid on Bank On Yourself plans are high

Often, this accusation is made by financial representatives who profit from investing your dollars on Wall Street. They even say agents only sell these policies because of the high commissions.

What they don’t realize is that Bank On Yourself Professionals receive 50-70% less commission than financial representatives who structure policies the traditional way.

And the shocking fact is that the financial representative who manages your money in the stock market is making at least ten times more than the Professional, if you contribute the same amount of money each year! [Read more…] “Why do so many people prefer THEIR facts to THE facts?”