Baby Boomers – Maybe the Revolution has begun – Please Listen and Learn!

Today for the first time I read an article that is inciting a revolution amongst American Workers with Employer Sponsored 401(k) Retirement Funds to get seriously involved in managing them. Hooray! Hooray! Hooray!

Bill Donoghue is the hero who may start the revolution. He is calling for American Workers to unite to protect their 401(k) savings. Thank you Bill for your American Workers retirement revolution article, “Bear-market revolutionaries“. I just hope Baby Boomers in particular read it and take action.

Unless the mainstream financial commentators who know and understand the problems take the initiative and write about it, nothing will happen. Bill please keep this problem front and center.

Bill pulls no punches in telling American Workers to get involved in their Employer 401(k)’s. He reminds us of the 2000-2002 bear market and the devastation that was visited on many about-to-retire Baby Boomers. Those Baby Boomers just got most of their money back at the end of 2007 but are likely to be significantly down again due to the sub prime debacle. They can look forward to another 5 years of work to replenish their nest egg a second time in 10 years. Ouch!

The only person responsible for your retirement is YOU. Your employer is probably too busy trying to run his business and keep you employed, to be interested in your retirement fund right now. He is probably convinced that all will be well in the long term, not understanding the Baby Boomers precarious position of needing money now or very shortly.

Employers have off-loaded their 401(k) plans to the financial experts to manage and who as Bill says,

“Most mutual funds families’ fund prospectuses state they will do nothing to protect shareholders’ assets from a bear market. They will not sell stocks short, go to cash, or hedge against obvious risks.”

Ask your Employer or their fund manager what they have done to protect your retirement nest egg since the November 2007 stock market down-turn.

It’s definitely a case of putting the fox in charge of the hen house.

His six step priority list is great advice and should be pinned to the workers locker-room wall.

My only concern is that you should not sell severely depressed assets right now. If you have a balanced portfolio in your employer 401(k) then consider moving into cash those assets that have fallen less that 10%. Unfortunately it is too late to take out the rest.

He rightly says be wary of what is happening with regard to retirement funds. Congress has got in on the act and needs to be seen to be doing something. The Financial Industry, quick off the mark as usual has come up with a new product called life-cycle funds. This is a good-sounding name that implies proper management of your retirement funds throughout your life with minimal involvement by you. Congress has taken it on board and believe it’s job is done.

Neither Congress, the Financial Industry nor your Employer will take responsibility to ensure your retirement nest egg avoids large losses. 2000-2002 and 2007-???? is testament to that fact.

This is not a problem for only American Baby Boomers. it applies anywhere in the world where Baby Boomers have their retirement funds under the control of their employer or their nominated financial managers.

As I said earlier, it is your money, your retirement fund and ultimately your responsibility. Learn from Bill Donoghue’s article and take heed of his call to Take Acton Now.

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