Wednesday, November 4, 2009

Harap2 KWSP tak jadi macam ni...

Why It's Time to Retire the 401(k)

By Stephen Gandel Friday, Oct. 09, 2009

Retiree Robert Shively spends his days on the golf course. For many, that would be a dream come true, but not quite in the way Shively does it. The 68-year-old is the cart mechanic at the Niagara Falls Country Club.

Two and a half decades ago, his then employer, Occidental Petroleum Corp., cut its traditional defined pension plan in favor of a 401(k)-type system. So instead of getting a guaranteed pension check of $1,308 a month for his 36 years as a full-time, salaried employee, the former chemical-factory worker receives $225 a month from his 13 years as an hourly employee, plus $180.16 a month from a profit-sharing plan Oxy had for salaried employees until 1994. He also has $70,000 left of the money he saved from his tax-deferred 401(k). On the days he works, Shively rises at 5 a.m. to get to the golf course. He mostly enjoys the job. But on tournament mornings, he has to be at the course at 4 a.m. A few years ago the country club switched from gas to electric carts, some of which have four 84-lb. batteries each. Every year, Shively and another worker have to lift out all the batteries and store them for winter. "Your body aches all over," he says.

This isn't how retirement was supposed to be.

If you have even peeked at your account statements in the past year, it's painfully obvious that something is wrong with the way we save. The tax-deferred 401(k) plan, and others like it, such as the 403(b) and the IRA, have become our nation's go-to retirement piggy bank. Invented nearly 30 years ago as an executive perk — one more way to dodge Uncle Sam — the 401(k) was never meant to replace the employer-guaranteed pension fund, supplemented by Social Security, as the cornerstone of our nation's retirement system. But propelled by a combination of companies looking to cut costs and consumers who wanted control of their retirement destiny, that's exactly what happened.

The ugly truth, though, is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves. In the past two years, that has become all too clear. From the end of 2007 to the end of March 2009, the average 401(k) balance fell 31%, according to Fidelity. The accounts have rebounded, along with the rest of the market, but that's little help for those who retired — or were forced to — during the recession. In a system in which one year's gains build on the next, the disaster of 2008 will dent retirement savings long after the recession ends.
In what must seem like a cruel joke to many, the accounts proved the most dangerous for those closest to retirement. During the market downturn, the 401(k)s of 55-to-65-year-olds lost a quarter more than those of their 35-to-45-year-old colleagues. That's because in your early years, your 401(k)'s growth is driven mostly by contributions. You control your own destiny. But the longer you hold a 401(k), the more market-exposed it becomes. It's a twist that breaks the most basic rule of financial planning. (See 10 ways Twitter will change American business.)
The Society of Professional Asset-Managers and Record Keepers says nearly 73 million Americans, or just under 50% of our working population, now have a 401(k). And collectively we pour more than $200 billion into these accounts each year. But retire rich? Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement. That's two years of college. Even worse, 46% of all 401(k) accounts have less than $10,000. Today, just 21% of all U.S. workers are covered by traditional pensions, and the number shrinks every year. "The time may have come to consider returning 401(k) plans to their original position as a third tier of retirement planning, behind pensions and Social Security," says Alicia Munnell, who heads the Center for Retirement Research at Boston College. "They should not be the thing we rely on for retirement security." And the government seems to agree. This summer, the Government Accountability Office concluded, "If no action is taken, a considerable number of Americans face the prospect of a reduced standard of living in retirement." That's what is known as an understatement.

The 401(k)'s defenders say bad markets don't make the accounts a bad idea — and that it's still too soon to tell whether they work. Many companies adopted them less than 20 years ago. Even then, most firms (including mine) still provided pension plans to their workers. So boomers retiring now were never focused on piling money into 401(k)s. In order for the plans to succeed, workers have to stash savings regularly for about 30 years. Most accounts haven't been around that long.

See TIME's Pictures of the Week.Read more:,8599,1929119,00.html#ixzz0Vrd7C21W

PS: Harap2 KWSP tak jadi macam ni. Tapi dari banyak berita pun, majoriti pencarum kwsp tidak memiliki simpanan yang mencukupi untuk menampung persaraan hari tua. Ditambah pula dengan pulangan yang hanya sekadar cukup2 untuk melepasi kadar inflasi. Cukupkah kita hanya menunggu duit kwsp bila bersara? Aku pun malas nak fikir benda tu. Apa yang aku buat sekarang, aku cuba keluarkan duit kwsp sebanyak mana yang boleh (dan dibenarkan oleh pihak kwsp) dan aku invest kat tempat lain yang bagi pulangan lebih tinggi. Selain tu aku pun buat simpanan berasingan dengan kwsp untuk tujuan pelaburan. Kita tak boleh sekadar mengharapkan kwsp bila tua kelak. Macam2 boleh jadi.

Pada sesiapa yang keluarkan duit kwsp untuk melabur dalam amanah saham pula, aku tak kata jangan. Tapi make sure follow closely performance saham amanah tu. Jangan hanya mengharapkan agen je buat sumer keputusan. Be warn!


treec00l said...

1st of all,

thanks for the info sharing.

scary, dowh. Na'uzubillah.

IMHO,beberapa option yg mungkin boleh diguna pakai utk meminimumkan risiko ni :

a. utk Akaun 1, bila layak utk invest kat unit trust, keluarkan dan masokkan dlm ASW (sebab ASB xleh). sebab? return lg tinggi.

b. utk Akaun 2, bila layak, keluarkan utk buat bayar deposit rumah (invest dan rumah sendiri) dan utk kurangkan prinsipal hutang SAHAJA. rase mcm rugi jerk kalo gune utk bayar installment, baik digune utk kurangkan pokok hutang.

c. Doa, semoga Allah memudahkan urusan kita di dunia dan semoga Allah memberkati hidup kita, amin ya Allah ;D

Wallahu'alam, betolkan kalo saye silap.

askrool said...

aku ada terbaca dalam cashflow quadrant tentang benda nie.....tapi masa tu ramalan je ...tak sangka betul2 jadi.....jadi sama2 kita amik iktibar...

sourplum said...

point ko kt sini. kwsp bg dividen rendah sgt la eh?

mdizone said...

hi tree! thanks for da tips. Memang option2 tu cadangan yang amat bernas pada ketika ini. aku pun buat benda yang sama juga.

sourplum, point aku untuk posting ni ialah supaya jangan hanya mengharapkan duit kwsp untuk menyara persaraan kita. interest yang rendah merupakan salah satu point. Yang lebih utama ialah kita tiada kawalan terhadap dividen yang diberi. Bila kita tiada kawalan terhadap pelaburan yang kita buat, ini merupakan risiko. Cuma pada aku, kwsp kita masih bagus berbanding tabung 401k kat us tu. at least pokok simpanan dalam kwsp tidak berkurang, cuma tahap dividen je yang rendah. kalau 401k, dengan pokok2 simpanan pun hilang kalau ekonomi gawat. Perkara ini juga berlaku terhadap kebanyakan unit trust di luar sana yang terdedah dengan pasaran saham. Masalah yang ketara bila kerajaan benarkan kita keluarkan duit akaun satu untuk melabur dalam unit trust (selain dari asw), ramai pelabur tidak tahu apa yang perlu dilakukan. Ejen2 pula hanya ghairah mengejar komisen dan hanya bercerita tentang pulangan berpuluh2 peratus. Tapi tidak pula diceritakan risiko yang duit pelaburan pelabur terdedah kepada kerugian.

so saranan aku, anggapkan simpanan kwsp ni sebagai bonus kita bila bersara kelak. bukan sebagai sumber utama. Lain la kalau bila kita bersara, duit kwsp ada berjuta2. Kalau setakat baru rm200k, fikir2 la balik. Silap gaya perbelanjaan 5 tahun pon tak lepas.

sourplum said...

ouh.. ok
i got ur point