Blog

Don McNay
Financial Columnist and Structured Settlement Guru

“Running on Empty. Running into the sun but I’m running behind.” — Jackson Browne

Internal Revenue Code section 401(k) is the only section of the U.S. tax code that the average people can cite. They know it has something, and often everything, to do with whether or not they can retire with dignity.

The adoption of section 401(k) in 1982 turned out to be one of those big moments that changed everything.

401(k) plan investments are a primary driver of the investment markets. It is the employee retirement benefit that most companies offer.

These plan investments are also the reason that many people are pacing the floors at night, watching their retirement get delayed or destroyed.

Until 401(k) came along, pension plans were usually defined benefit plans.

A defined benefit pension is one that gives you a set number of dollars for set period of time. It usually pays out over the course of your lifetime after retirement.

With a defined benefit plan, the employer takes responsibility for making sure pension money is safe and properly invested.

State and local governments are about the only entities that currently offer defined benefit plans. Most, like my home state of Kentucky, are struggling to figure out how to pay for promises to current retirees by politicians from long ago.

As a financial consultant, I advise anyone who can get a defined benefit plan to maximize it. As a taxpayer, I don’t want to pay for my neighbor to retire at age 50, when that is not an option for me.

With the advent of the 401(k), employees with little or no investment experience were required to pick among investment options offered by an employer.

Employees were put in the position to fail. Many have.

It is up to the employer to pick what investment company handles the employee’s money. If the employer picks a dog, with few options, the employee is out of luck. (more…)

John McCain and Mitt Romney share a secret. It’s 23 years of Mitt’s tax returns.

Mitt gave them to McCain in 2008 when McCain, then the GOP presidential nominee, was vetting VP candidates.

This time around, Mitt has won the GOP nomination, but now he’s hiding those 23 years of returns from the American people. He handed them to McCain in exchange for a VP bid. But Mitt is denying that information to the American people when he’s asking them for something more important – the presidency.

Mitt, a quarter billionaire, disclosed his federal payments to fellow one percenter McCain, who owns so many houses he couldn’t count them. To America’s middle class riffraff, Mitt has divulged significantly less — a partial return for 2010 and a promise of the 2011 return when he finishes it.

Ann Romney told ABC reporter Robin Roberts last week that the riffraff need far less to determine who will be their President than McCain did to pick a VP. Here’s what Ann said:

“We have given all you people need to know and understand about our financial situation and about how we live our life.”

You people. That would be the uppity riffraff who dare to question the rich Romneys.

Mitt has explained all this before. He’ll tell voters what’s good for them. And what’s good for them is part of one year’s return and maybe another year later. That’ll do it. Here’s how he put it to CNN:

“People always want to get more. We’re putting out what’s required plus more. Those are the two years that people will have, and that’s all that’s necessary for people to understand something about my finances.”

That’s all that’s necessary. Got it? Mitt told you. Now go home and shut up about it.

Mitt might do better with middle class voters if he got down off his high-steppin’ dressage horse. But if he did that, he might never get taxpayers to repay him the $77,000 he lost on that horse. That $77,000 loss, an amount larger than most Americans earn in a year, was revealed in the partial return Romney did release. No wonder he’s reluctant to disclose more.

Ann Romney described Mitt’s refusal to give additional years this way on ABC:

“There are so many things that will be open again for more attack. And you just want to give more material for more attack. And that’s really – that’s just the answer.”

The answer, Ann Romney said, is that there are so many things in those secret returns that would provoke criticism. And the quarter billionaire running for president don’t countenance no criticism from riffraff. (more…)