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The Smartest 401k Book You'll Ever Read: Maximize Your Retirement Savings...the Smart Way! Hardcover – Bargain Price, June 24, 2008
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John C. Bogle, Founder, The Vanguard Group
Solins book will show you how to plug the leaks in your 401(k) and 403(b) plans, sidestep the minefields in your financial future sown by the investment industry, and get on the road to a secure retirement.
William Bernstein, author of A Splendid Exchange and The Four Pillars of Investing
Dan Solin has produced a retirement savings masterpiece: all will lament not being taught these lessons at the beginning of lifes journey! Brooks Hamilton, Senior Fellow with the National Center for Policy Analysis and co-author of NCPAs Reinventing Retirement Income in America
About the Author
More About the Author
He is the co-author of Mandatory Arbitration of Securities Disputes, A Statistical Analysis of How Claimants Fare, which examines the fairness of the mandatory arbitration system imposed on investors by the securities industry. He testified before a congressional subcommittee investigating the mandatory arbitration system.
He writes financial blogs for The Huffington Post and USNews.com.
He graduated from Johns Hopkins University and the University of Pennsylvania Law School. He is the director of investor advocacy for The BAM ALLIANCE and a wealth advisor with Buckingham Asset Management.
Top Customer Reviews
On the one hand, I totally agree with his claim that the entire 401(k) system is corrupt, as is the entire investment management industry, and the U.S. government is a willing and active cohort in this scam to rob American employees of their retirement savings. My own 401(k) plans have seen paltry returns over the last 15 years, despite my effort at picking the "best" funds that were available to me. (No, I don't chase past year's performance.) Call me bitter, but from talking to my friends and former coworkers, this seems a commonplace experience, and this book explains why it's the case. The action chapters, esp. in part 3, are also decent, although as another reviewer has said, the entire action plan can be summarized in two sentences: diversify your portfolio, and only invest in low-cost index funds. The author does provide a list of funds to consider, although your plans may not offer them at all (see the "cheat sheet" in chap. 24 of the 2010 edition).
On the other hand, I'm not sure what the author's true motive in writing this book is. Is it really to help us worker bees to save for our (gloomy) retirement? As I was reading the book, I got the feeling that he was writing the book primary to sell the book, kind of doing what the mutual funds he criticizes are doing. For example, he cherry-picks on certain numbers, such as quoting historical returns without mentioning the significant inflationary effect of survivor bias (i.e., only companies that survive get included in calculating market returns).Read more ›
He offers far more than another book about how Wall Street and the insurance industry are ripping us off in our 401(k) and 403(b) retirement accounts. Though Mr. Solin does explain how our hard earned money is siphoned off by the "experts" that provide these plans, he also explains practical easy steps we can take to minimize the impact. These steps include:
* Using an IRA with better options.
* Rolling the 401(K) to the IRA when you leave an employer.
* Picking the "least bad" funds within a poor retirement plan.
* Choosing assets that fit with the rest of our nest egg.
* Joining the investment committee of our employer's plan.
Albert Einstein once said "if you can't explain it simply, you don't understand it well enough." Dan Solin gets it and explains it with brilliant simplicity!
If you want financial independence years earlier, "The Smartest 401(k) Book You'll Ever Read" is for you. It will give you sound and simple advice that's equally simple to implement.
For those who make their fortunes from providing these outrageously expensive plans, you'll hate this book. Read it anyway.
Author Dan Solin provides helpful and necessary information for those who are currently in a 401, who will be, and also those who'll be switching jobs. After leaving an employer there are a multitude of options of where to put your 401K money. Solin does note the latent gimmicks and tricks that take your hard-earned money in hidden fees.
Ten of millions of Americans are now relying on Defined Contribution Plans (401Ks) as Defined Benefit Pension plans (Pensions) are now nearly extinct. How much of your 401K will go toward your medical and pharmaceutical drug costs when you're old? Will the old rule of withdrawing 4% of your principle without eating into the principle be enough for you to live off of? Tax-deferred means - deferred - not tax free. Will Congress change the rules on taxes, again and again, as they so often have? What will the average rate of return per annum be? What will the average rate of inflation be? We must make a variety assumptions and calculations.
Solin's advice and info is critical because those with 401Ks are statistically putting all of their eggs into 1 Financial Market Basket.Read more ›
Solin is a DFA advisor so he promotes DFA index funds. He cites some papers which show that investing in DFA funds gives higher returns than using Vanguard Index funds. He forgets to mention that DFA advisors usually charge a 1% ER, so the return of DFA funds must be incrementally higher by 1% over the return of Vanguard index funds invested by the do-it-yourselfer.
Solin correctly rails that 403B's are terrible investment plans for teachers. He cites the case where the NEA was sued for collecting $50M in fees from investment providers.
Solin also points out that the Supreme Court said it was ok for Congress to retroactively change the tax laws for 10 years! This could be the justification Congress needs to begin taxing your IRA's, 401K's, and Roth IRA's not only on the current date, but 10 years retroactively! Very interesting food for thought.
Solin also correctly advocates that 401K funds should have to divulge actual expenses incurred versus hiding them so the investor can't find them.
One thing that Solin did not provide was a rule of thumb for deciding whether to invest in a high cost 401K investment or use a low cost taxable investment. I have seen some rules-of-thumb saying that if the 401K investment has total expenses over about 2% ER, then skip the 401K and go to a low cost taxable investment in index mutual funds.
Other than recommending DFA funds over Vanguard funds, I don't disagree with any of the 401K advice Solin gives in his book. If a DFA advisor with the 1% fee is what you need to control your behavioral finance tendencies to sell low and buy high.......then the 1% fee is probably worth it.Read more ›
Most Recent Customer Reviews
I thoroughly enjoyed reading this book as it provides a practical strategy in managing your 401(k)'s. Read morePublished 4 months ago by Robert A. Tylicki
This book is full of useful information. I recommend it to anyone who wants to really make things simple for their 401K and at the same time want a comfortable retirement.Published 5 months ago by Ronal Rowlett
Great information in here... and simply written!!
How to avoid losing your hard earned retirement to "money hungry" fund managers.
INDEX FUNDS ONLY, BABY!!!
I gifted this to all my children at Christmas and they all, to a person, now understand what their 401K plans are all about and why they're leaving
so much money on the table... Read more