By the way, there you go again, misrepresenting the benefit of the 401(k) system.
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That sounds like a good reason to pay it off with the 401(k) money.
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Any shares held in the ESOP were immediately vested and tucked into the 401(k).
The question then becomes whether or not to contribute unmatched funds to the 401(k).
Unfortunately, the importance of the 401(k) plan takes a backseat to more pressing issues.
Economist Teresa Ghildarducci blames the 401(k) system that most of us use to save for retirement.
Retirement plans such as the 401(k) receive favorable tax treatment under the U.S. income tax system.
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Rolling the 401(k) into something else, rather than cashing it out, keeps the funds tax deferred.
There is an exception to this general rule, and that is when the 401(k) offers matching contributions.
For example, investor lawsuits in the 401(k) arena have recently led to greater disclosure and lower prices.
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For employees who have larger pretax balances, they can convert part of the 401(k) at a time.
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She is now saving 10% of her salary (which has increased over the years) in the 401(k) plan.
The program involved a retirement plan known as a 403(b), which is a public-sector cousin of the 401(k).
Soon the 401(k) was embraced by big corporations in the 1980s as a replacement for costly pension funds.
These accounts will take the best of the 401(k) plans and make them available to every working family.
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Essentially, they want to treat the past 17 years under the 401(k)-style system as though it never happened.
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Spending time understanding and properly supervising the 401(k) is often way down their list of things to do.
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The 401(k) investors who kept contributing to their plans gained an average of 64% during that time period.
The 1978 law that Congress passed creating the 401(k) system explicitly allows for the creation of pooled plans.
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But confirming what most investment pros had predicted, the 401(k) funds lagged even more, by two percentage points.
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In the transition to the 401(k) world, costs shifted from employers to employees.
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This differs from the 401(k), which is connected to your workplace and typically includes contributions made by your employer.
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Because everything about the 401(k) is too individualized: investment management, risk and fees.
Torya Blanchard, who cashed out the 401(k) she earned as a French teacher, opened a successful 48 square-foot creperie.
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Before the funds were withdrawn from the 401(k) and wired to some bogus account in Cyprus, the transfer was cancelled.
Getting back to the 401(k) issue, in our opinion the problems with these plans are only beginning to show up.
Worse still, the flawed design of the 401(k) virtually ensures, in my opinion, that errors in calculating account balances will arise.
In 30 years, the 401(k) went from a small program to a multi-trillion-dollar industry supporting thousands of financial planners and money managers.
He has written a series of good stories lately about the 401(k) plan that millions of Americans use to save for retirement.
As background, the 401(k) rules from the DOL and IRS are complex.
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