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Old 12-11-2016, 01:29 PM
 
29,775 posts, read 34,863,854 times
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Quote:
Originally Posted by rjm1cc View Post
What was wrong with using an IRA or ROTH?

What are the fees charged to each employee?

How good are the investments.
TBD, The link is a good read:

I have read previously about and the following is one of the big hmmmm's I have and still have.
Nearly 7 million Californians will be automatically enrolled in state-run retirement savings plan under new law - LA Times

Quote:
The program’s funds will be used to invest in a “diversified portfolio” focused on “long-term financial growth,” according to the governor’s office. The retirement plan is not guaranteed by the state, meaning it is not responsible for any potential losses by retirement savers.
Will California politically allow what will primarily be low and moderate income workers actually lose money in a program they pretty much forced them into? Me thinks not! Then what? Why are state employees guaranteed a specific payout and these folks aren't will probably become a question. Previously I have read a concern that the state employee pension trust fund might down the road be used to guarantee a payout. That's another concern not expressed in this article.
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Old 12-11-2016, 02:25 PM
 
1,190 posts, read 658,914 times
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Quote:
Originally Posted by rjm1cc View Post
Thus inflation will make the "investment" a loser. The investments can not be in instruments that will not grow as they approach retirement. Seems very misleading to tell these wage earners that they have a good government retirement plan when they could do better in a ROTH or regular IRA.

In short they have to save more than a dollar to day to pay for there expense in retirement. Thus they might need to set aside 30 years of living expenses. If they are low wage earners how can they afford to save this much?
good question.

Apparently after the 3 years, and they haven't sorted this out yet, they will be offering more investments so the money will grow a little. Another issue is the Employee Retirement Income Security Act of 1974. It is not subject to that for whatever reason making the investment less secure.
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Old 12-11-2016, 02:30 PM
 
1,190 posts, read 658,914 times
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Quote:
Originally Posted by TuborgP View Post
TBD, The link is a good read:

I have read previously about and the following is one of the big hmmmm's I have and still have.
Nearly 7 million Californians will be automatically enrolled in state-run retirement savings plan under new law - LA Times



Will California politically allow what will primarily be low and moderate income workers actually lose money in a program they pretty much forced them into? Me thinks not! Then what? Why are state employees guaranteed a specific payout and these folks aren't will probably become a question. Previously I have read a concern that the state employee pension trust fund might down the road be used to guarantee a payout. That's another concern not expressed in this article.
Anyone can opt out but yes, will be automatically enrolled.
Yes, the investment isn't as secure as let's say, getting the same ROTH outside of employment
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Old 12-11-2016, 04:04 PM
 
12,299 posts, read 15,194,052 times
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It should help. The 401k is the best retirement scheme devised, but many workers lack access to it. Sure, some will opt out, but most will stay in. Even at a modest salary of $20k a year, that's $600 annually invested. Over a long career, that adds up. Could be great for many workers. Maybe even reduce turnover, as fewer employees jump to large companies which have retirement plans.
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