Tuesday, February 24, 2009

Is 401k a Ponzi scheme?

It might be a bit hard to digest but several workers have seen their 401(k) balances shrivel over the past year and if we believe the estimates of Employee Benefits Research Institute then workers with at least ten years of job tenure have witnessed losses of between 20% and 30% in their account balances since the start of 2008. This makes me feel whether 401(k) plans are just to play havoc with your retirement?

Many of us may feel it is some kind of a Ponzi Scheme but even before 401(k) came into existence a number of companies were offering traditional pension plans which would ensure that they had a comfortable life even after their retirement and it was up to the employer to ensure that workers got the best deal.

Some may feel there is some grand conspiracy behind it and it has some serious flaws which helps the employers to get the monkey off their back but let me tell you at the end of the day you would be better off than some of the traditional pensions as government agencies backing employer pensions are already facing huge deficit and could witness their losses mount in the future. So stay cool as this shall also pass!!

Monday, February 23, 2009

A 100% Ban on UK Mortgages?

Recession is slowly and steadily pouncing on each and every nation around the globe and with no sign of economy picking UK is likely to impose a blanket ban on mortgages in the country

This seems very likely as the PM intends to save the banking system of the country which is already bleeding under the effect of recession, thanks to some senseless steps taken by them to up the business. (Greed has got no dimensions I must say)

Also the country is expected to announce a 500 billion pound bailout package soon which would surely cause a pinch to the taxpayers in these harsh times so a ban on mortgage makes sense at the moment. Dear Prime Minister in these bad times don’t expect people to even cast a look at mortgages as you wont find any takers for it J

My take:

In the good times we tend to forget that it never lasts forever and we only tend to realize when the ship leaves the port. So true when we talk about human nature!!