You can avoid investing in a fraudulent fund a la Madoff by doing your homework. You want to check out the fund’s past performance, the fund’s fees and watch out for anything that sounds too good to be true.

It’s true that stocks are riskier than bonds and cash. But investing in a mix of stocks and bonds is often the best bet for a long-term retirement portfolio. Low-fee index funds from reputable firms like Vanguard are a good place to start.

Hope this helps,
Kristen

http://www.401khoax.com/

Maybe its time do something different. I believe the amount of taxes we pay as a percentage of income must increase due to recent shift to entitlement philosophy. Consumption tax is a great dream and I am a big fan but if we want to be real we have to admit that this has not happened for 100+ years and the IRS base is so strong we will NOT see this change in our lifetime.

On a slightly different tack, I have the impression that a Roth is more advantageous to your heirs than a regular IRA, should you die with some money left. The heir’s tax gouge on a regular IRA is pretty large; because you’ve already paid the tax on the money in the Roth, your heirs don’t have to pony up as much cash when they inherit.

-thank you,
from a very uninformed person.

Don’t worry so much about the capital gains tax. Short term CG is the same as your Ordinary Tax Rate. Hold them longer than a year and the Long Term rate drops, in some cases substantially.
Google is my friend: http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

Disclaimer: I am not a tax guy.

Here’s a list of Vanguard’s ETFs.

BLV is the ETF version of VBLTX. If you buy that one, you’ll only have to pay the $4.95 commission. And your annual expense ratio will only be 0.14% instead of 0.22%.

Vanguard does not have an ETF version of their S&P 500 index fund. You might want to try VTI (their ETF that tracks the total U.S. stock market) instead. Or, if you want to stick with something tracking the S&P 500, you might want to try iShares’ ETF with ticker IVV.

In case it’s helpful, here’s a list of the lowest-cost ETFs I’ve found for each asset class.

VBLTX Vanguard Bd Index Fd Inc Long Term Portfolio
VFINX Vanguard Index Tr S&P 500 Portfolio

Is there another version of these?

-Rick Francis

What can I say, I LOVE the current tax deduction, and I have a feeling that by the time I retire, this country will move more towards consumption based taxes rather than higher income taxes to pay the bills.

Also, I’m one of those Dave Ramsey types who puts 15% towards retirement, has a college fund going for our son, and tries to pay off the mortgage as quickly as I can with anything extra we have at the end of each month (at the risk of losing the tax deduction, but oh well – I hate debt).

I’d be curious to read a follow up post from JD on why it makes so much more sense to max a Roth 401k deduction instead of maxing a traditional 401k deduction.

-Rick Francis

https://www.tradeking.com/p/home/tradeking/about/commissionsfees.tmpl