Frontline’s Martin Smith hits us a with a hard fact in PBS’s most recent documentary, The Retirement Gamble. If you maintain a typical 401(k), he found, then about 2/3rds of your returns, as a net percent, will go toward Wall Street compensation:
LINK TO FRONTLINE'S The Retirement Gamble http://video.pbs.org/video/2365000843Bogle: Costs are a crucial part of the equation. It doesn’t take a genius to know that the bigger the profit of the management company, the smaller the profit that investors get. The money managers always want more, and that’s natural enough in most businesses, but it’s not right for this business.Smith: Bogle gave me an example. Assume you’re invested in a fund that is earning a gross annual return of 7 percent. They charge you a 2 percent annual fee. Over 50 years, the difference between your net of 5 percent — the red line — and what you would have made without fees — the green line — is staggering. Bogle says you’ve lost almost two thirds of what you would have had.
Program: FRONTLINE
Episode: The Retirement Gamble
The Retirement Gamble raises troubling questions about how America’s financial institutions protect our retirement savings.
• Visit the The Retirement Gamble webpagehttp://dailyagenda.org/2013/04/25/wall-street-is-eating-up-your-401k/
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