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About it for more I'm joined by Chad park's president and CEO of the online 401K Chad welcome to the show this number is too big isn't.
Absolutely it is way too big that's a small Condo in Florida if you think about it.
It's it's like.
Fortuyn's as much as the average American has saved in their 401K most people have 25000 dollars say that's about the media and you.
You know if people knew they were paying this much in -- I think there would be a revolt.
We would hope.
You -- well okay so that's not the only problem though the real problem is that Americans are saving enough for retirement why is that.
I think really in the bottom line what we've seen in our research and and approaching this market is that it's there's no immediate gratification.
In -- -- -- you know -- We live in a microwave society want instant results instant gratification I wanna be rewarded today for what we're doing.
And then the other part of this is we really believe it is biologically impossible for us to think that we have a future.
Top well how about.
But let's take a look as we started with talking about fees for the average 401K.
Look at -- just pay a little bit of attention to your fees to make a very big difference.
Let's see -- 50000 dollars in your retirement account and your pay and 32 basis points up for what K you -- -- roughly a 160 bucks a year in fees.
But if you pay no attention to this he left that these escalates -- a two and a half percent you're paying over 12100 dollars a year in fees that what does that do.
-- long term earnings by I think it was Einstein that said that compound interest as one of the wonders of the world.
And it works in your -- -- also works against you so what we see in these illustrations.
Is the negative effect of compound interest so -- not earning interest on your interest and it's every year as your assets grow.
You are you have less to earn more interest on in the -- it's one of these mathematical formulas which you just can't.
Get your head around you really need an illustration like we've shown training delivered right you -- -- -- -- see -- going -- year after -- -- your making more money on -- money -- That's -- -- encouraged actually save more but you say there's a huge retirement crisis in this country what do you mean.
Well we have the three legged stool pension.
Social security and personal savings.
And I think that most people in the sixties and fifties probably have that available to them.
And what we're finding is as we move through the age groups 40s30s twenties.
That these people are not gonna have the ability to have a pension -- work their bankruptcy municipalities bankrupting companies.
Social Security is projected the last of the twenty years and a major adjustments and so we really see that most people are gonna plan on that is a major pillar of their retirement savings.
You gotta do it yourself these -- I mean there's no way around it.
Look -- -- the good news here is -- Department of Labor is requiring more disclosure I think that's right so at the very least you mean you should have more information about the fees that you are paying.
And get them under control what size -- would be reasonable.
Anything under one half of 1% in my opinion I know lower the bad -- low.
The better you know fees you need -- there have to be fees because companies have to be able to provide this infrastructure to be able to have us.
Save for retirement and take advantage of the incentives of the government puts on the table.
Now there's a certain amount of -- which becomes excessive and that's really for the marketplace to decide what do you think is too much and that's where free market and competition comes in.
To allow companies like ours and others to really offer different -- and so you don't have to -- up to go more for.
Nation the better that's the way I feel about it you know and you've got to make sure eight -- contribute as well as much as you -- break up new limits -- year I think it's 171000 dollars -- government is allowing you to set aside 75 in 2013.
So it keeps on going out right.
But you gotta make sure those fees are low chat thanks for coming on very well tell our viewers again your website address it is the on -- 401K dot com.
Brilliant thank you so much -- I'm -- appreciate it.
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