Monday, December 04, 2006

December 401(k) Meetings

And now a narrowcast: I'm doing 401(k) enrollment meetings for the next couple of weeks -- Dec. 6th is Warners (10 a.m.) and DreamWorks Animation (2:00 p.m); Dec. 7th is Cartoon Network (noon) and Disney Feature Animation (2:00 p.m.); Dec. 8th finds me at Starz Media (aka Film Roman); Dec. 11th I'm at Universal Cartoon Studios (2:30 p.m.); Dec. 12th has me at Nick and December 13th finds me a Fox TV Animation, 2 p.m.

Widercast: If you're working in the U.S. of A. and aren't participating in a 401(k) Plan, even though your company offers one, you should give serious thought to reassessing your position...

I've administered the Animation Guild's plan long enough to know that 401(k) plans are several leagues from being a perfect retirement solution, but they're better than nothing -- although worse than old-style "check-every-month" pension plans that are now dying off faster than cattle at a poisoned salt lick. In 2007, 401(k) Plans will allow you to put away $15,500 in various tax-deferred investment accounts. Given the times in which we live, you're well-advised to put at least something away, even though there are some problems, as the LA Times noted a couple of days back:

With companies rapidly abandoning traditional pensions, 401(k) plans have become a cornerstone of retirement security for an estimated 47 million people. Yet regulation and oversight haven't kept pace with the growing importance of these plans, the report by the Government Accountability Office concluded.

My two concerns with 401(k) Plans are the finite number of investment accounts and administrative fees. When you're a 401(k) plan participant, you're something of a captive. If you want to take advantage of the tax shelter aspects of 401(k)s and get a matching contribution from your employer (assuming he or she offers one), you also have to endure administrative fees and the limited number of mutual funds that your company's plan uses.

Still in all, it's better to grit your teeth and enroll in a plan than not. Because when you hit sixty-five, you'll need all the financial help you can get.


Anonymous said...

And it's never too late to start, although the earlier you start, the better (due to the magic of compound interest).

Social Security won't exist for many of us, and pensions are going the way of the dodo. People in this industry are already familiar with socking away cash for down time - this is just longer-term socking.

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