Saturday, May 28, 2005

The Coming Retirement Funding Crises!! Or Money, Money, Who’s got the Money?

If you think that the only thing you have to worry about regarding your retirement is if Social Security is healthy then you better think again. The scandal taking place in private retirement programs is becoming a much bigger problem and its being largely ignored by the both media and the legislature.

While the questions raised about the future of Social Security benefits has left us looking for a pea of truth under moving shells of deception we are being kept from seeing the much larger picture of private retirement funding problems.

It comes as no surprise that many sectors in the economy are having a hard time today but it is being underplayed just what this means for the future of retirement in America. For example take the recent case of United Airlines and its bankruptcy. On the surface it’s a pretty cut and dried case of a problem sector company (air transportation) filing for business bankruptcy.

But the facts of this bankruptcy go much deeper than that. United Airlines is being allowed by the bankruptcy court to screw its employees out of their pensions. The bankruptcy court ruling in this case has resulted in United Airlines pulling off the biggest default in the history of retirement funds. This ruling is a sad day in American judicial history.

Worse yet with many airlines (not just United), auto manufactures (including GM) and retailers (like Kmart) seeking protection through, sale, reorganization, or bankruptcy we will continue to see huge under funding in employee retirement programs. While the companies involved are allowed to walk away from these obligations the employees and tax payers will be stuck with them.

We have seen the federal Pension Benefit Guaranty Corp. go from a $10 billion surplus to a $23 billion deficit in under 7 years. (The PBGC is the federal agency which insures traditional pension plans.) And while most Americans know even less about the PBGC, which is maintained by corporate premiums, than they know about the Federal Depositors Insurance Corp. (that insures bank security) they will soon be made aware of their precarious situation.

Currently the PBGC has $39 billion in assets while having and estimated $63 billion in long term liabilities. At the same time, the PBGC estimates that the total under-funding in the pension system(that it could be at risk for coverage) has reached a record $450 billion. At this rate the under funding problems of Social Security look puny by comparison.

No insurance program can endure that kind of outflow and of course the tax payer is on the hook for any amount needed to bail out the system. This problem has the potential to make most of the scandals of the last few years ago look small and insignificant by comparison.

It also comes at a time that couldn’t be worse for the American worker. This hemorrhage of red ink is threatening our private retirement system just when it will be needed to help shore up retiree’s incomes during the coming Social Security crises.

So while major corporate salaries are still in the stratosphere and worker salaries are being pummeled by the twin terrors of outsourcing and lowered earnings we watch as corporate thefts of the night busily stealing our retirement funds. There use of corporate bankruptcy laws comes after new legislation that has personal bankruptcy more restrictive and harsher than at any time in recent history.

We are watching corporate America steel our retirements from us while penalizing us by making us pay for it as never before.

What can be done to resolve this problem before it’s too late?

We can start by recognizing the problem and facing the fact that we’re already been ripped off to the tune of Billions of dollars. Companies are failing to pay the funds to employee’s retirement programs that they are obligated too under their existing contracts.

That must be put to a stop!!!!!

We all need to be writing our Congress men and Senators demanding that such events as have happened with United Airlines not be allowed to continue.

We also need a much higher premium for corporations paying into PBGE if we are to end the shortfall that exists with the PBGC while we can still can. Corporations are getting a rate that is much too low for the risk that is being assumed and they must be made to pay up.

We need bankruptcy laws that protect retirement fund payments from forgiveness. It’s time that the employee receives the necessary protection to prevent him from being left holding the bag. Under current law they lose twice; once as the employee and again as the tax payer.

So remember you’ve been warned!

You neglect this problem at your own peril.

Failure to act will doom this next generation of retirees to face the worst conditions of any group of retirees in America since Social Security was instituted.

Wednesday, May 25, 2005

What are the Differences between Viruses and Spyware?

I guess I should have known that my last blog would bring several questions from readers about what are the differences between viruses and Spyware. I guess I can understand the confusion since there are no definitions that all can agree on when defining these terms.

So here are my answers to the questions I received.

Just bear in mind that they are my answers and I know that not everyone would agree with them but I feel that they generally define the problem and clarify these terms. They are based upon my own experiences and judgments and certainly aren’t intended to be considered as definitive. They are just my perspective based upon my years of working with computers and fighting viruses, Spyware, and other malware.

What is a virus?
It’s any program containing all the code necessary to reproduce itself from a self-contained package that allows it to replicate from computer to computer and network to network without any human intervention. Virus can range from being nesciences to being dangerous threats. All of them cause some damage and some can completely destroy a computer system or network.

How do viruses spread and how do they do it so fast?
Viruses are spread when their code is run on a computer allowing the virus to replicate and make other copies of its self. These copies are then spread to other computers as payload within another program. Often it’s contained in an email but it can be hidden in any program that is downloaded to a computer ranging from an mp3 file to a text document. Since viruses are small self-contained packages that can be copied quickly and are sent as small payloads they can and do spread very fast.

What is Spyware?
Spyware is any program that resides on a computer with the intent of gathering user information and secretly sending it to someone else. Spyware in general doesn’t try to replicate itself but is only interested in residing on the machine it’s installed on and gathering information. Spyware may be as innocent as a program that watches what sites you go to and thus allows for targeted ads or it may gather any and all information typed or located on a computer. Key loggers are a good example of the latter. It is this wide difference in what Spyware does that make it so hard to define, detect, and control.

How do I get Spyware?
Spyware gets on a computer through active content on a web site or by downloading a program that then secretly installs the information gathering portion of the program. The information gathering is then done without the user’s knowledge or informed consent. Often a computer user willingly installs Spyware on their computer by installing a program that purports to do some innocent function but ends up spying on them and reporting back to someone with the information.

(Remember to use caution since many of the screen savers, weather monitors, wallet programs, and other freeware on the web are really marketing Spyware and should be avoided.)

Why is Spyware getting so much of the attention now and not viruses?
Well I’m not sure which is getting the most attention but I know that Spyware is becoming more of a problem than viruses. Spyware is much harder to detect and scan for and it’s much harder to get rid of. Currently most virus detection programs are close to 100% effective at virus detection while Spyware detection is luck to hit an 80 to 85 % detection rate. Worse still is that while it’s easy to define a virus just what is Spyware is much harder to define.

What can I do to prevent Spyware and viruses from getting on my computer and compromising my system?
Well you’ve all heard the standard answers. Be careful and trust no one. Watch what sites you go to and don’t open email that seems to be suspicious. Use a good firewall program, keep your antivirus program up to date, and scan for Spyware with a good Spyware detection program. And I agree that if that’s done with the right tools you will avoid trouble with not only viruses and Spyware but the Trojans and the other malware that’s out there as well.

That leads to the question of; what are the best choices for these programs and how should a person go about using them? I think that this matter is important enough that I will write a second article describing the methods I’ve use for over 5 years to avoid having any major problems with viruses, Spyware, or the other dangers out there on the net. Being in the tax and accounting business I have had to deal with these and other problems so as to protect both my computer systems as well as my client’s data. The method that has evolved has grown over these years becoming more and more involved and using several programs but it’s still easy enough for most people to implement it.

So stay tuned and we’ll discuss my solution to protecting my system in detail. Hopefully it will help you to develop a system for yourself that will work and protect your computer from attack and surveillance.

Tuesday, May 24, 2005

Is Legislation Ever Going to Address Spyware!!!

The House has finally passed a bill against Spyware that may contain some much needed help against those who write it. Since it’s only passed the house it’s not a law yet but the Senate seems ready to address the issue and should pass something similar this year.

This bill contains some real punishments for Spyware writers with prison sentences of up to 2 years and fines of up to 3 million dollars per violation. And if you use Spyware to perform other acts like identity theft you could have up to 5 additional years added to your sentence. I’m not sure that 2 years in prison is enough but 3 million dollars in fines is a pretty good deterrent.

So if the Senate passes something that is close a bill of some kind could become law this year. It’s hard to believe that something hasn’t managed to get passed with all the pressure being put on to do something about Spyware.

This is one of many times that Congresses and the Senate are definitely responding to slowly on a matter of great importance to protect our technology infrastructure. It seems that they continue to fail to understand the need to protect our technology base from the many existing threats that could destroy it.

However, I predict that unless it's more effective than the can spam act it will have little impact on Spyware. But we can hope that it helps and any legislation is better than none in this matter. So while it remains to be seen just how it will play out anything that may reduce Spyware and make our on line computing safer needs to be done. Just don't hold your breath while you wait for this law to help.

The first problem is that even amount the savviest users no clear definition of what Spyware is has been agreed too. That makes it hard to outlaw something if it can't even be defined by those who will be charged with helping enforce this legislation. Even among the companies that are producing anti-Spyware software you will see that there is little agreement as to what should be considered as Spyware.

Different Spyware programs will find may differences in what they consider safe while all fall short of detecting everything that is truly Spyware. This is something that must change or Spyware will always be with us.

Some of these anti-Spyware programs even contain Spyware themselves. This is the ultimate insult for users who use these programs hoping to solve their Spyware problems. They end up introducing Spyware on their systems while trying to prevent it.

The thugs that promote such fraud should be the first ones dealt with and it should be a hard, swift, punishment. The bill defines such actions as changing your start page, capturing private user information, or changing system files and settings as constituting Spyware. I’m sure that all of these specific actions can be agreed upon as improper functions unless allowed by a fully informed user.

Second; while most Spyware practices are already illegal (under deceptive-business laws) only two Spyware companies have been sued so far. We just aren’t using these laws to bring to justice those who are violating basic business law as it is already written. That means more laws aren’t going to help until we start applying the laws that we already have on the books.

Third; it’s the computer users themselves that cause a lot of the problem. By using available software to clean and protect their systems a user can stop all but the most insidious forms of Spyware now. Yet many users fail to do just that. I still find people and companies that aren’t even using a firewall for gosh sakes.

Worse yet users continue to use programs that contain Spyware willingly and with little regard as to its effect on their systems. That little chance that anything will be solved by laws until users wake up and do a better job of checking out the programs that they install and run on their system. Remember Gator (The Gator Corporation is now Claria Corporation), Gator eWallet, and Bonzi buddy are still out there and still being used on a lot of computer systems even though they are known offenders.

It seems that some users don’t care what the software does as long as they like the features that it provides. That is unfortunate since all of these programs can be replaced by programs that do the same functions while offering features as good or better just minus the Spyware. And fourth; even major companies are using programs that are for all intents and purposes Spyware. It's time that companies that should know better quit using these methods to spy on their customers. Many of the methods of registration and digital rights protection currently being used are just fancy Spyware programs as far as I’m concerned.

Spyware isn’t right for any reason and our technological infrastructure must find a way to provide protection with out infringing on the rights of the user. It's like trying to understand why Yahoo and Google are still using popup screens and ads in certain locations while offering popup blocking software that blocks these very types of ads. It seems the height of gall to get people to pay to have popup ads only to have them blocked by the very companies that they have been paying to run the ads.

Well that’s a matter for another article. Stay tuned and soon we will look at the dark side of popup ads and the blockers that are used to stop them.

You may see a good article on the subject at

Thursday, May 19, 2005


In part one of this article we discussed the upcoming Roth 401k and the existing standard 401k with the hope of helping you to understand that one of these two programs is most likely your best bet to provide for your retirement.

We looked at the low rate of participation among eligible workers in 401k’s in general and younger workers in particular. Then we considered the risk to the future of retirees in this country in light of the question of the solvency of the Social Security System.

With the failure of far too many workers (especially young ones) to save enough to insure their financial security during retirement and the questions of Social Security Solvency you would think that these problems are the major hurtles to be over come.

But you would be wrong. The real dangers to retirement programs and 401k’s in particular are much more serious and have been around since 401k’s first began. Introducing Roth 401k’s hasn’t solved any of the problems that exist within the 401k program.

These problems have been covered up for years by the employers, plain supervisors, managers, insurance companies, brokers, and Federal legislators who are responsible for protecting the investing public. Just as they allowed for junk bond traders and crooked investment advisors to rob us in the past they are allowing unscrupulous tactics and greedy plan providers to do the same to us today under the 401k program.

While these problems have been just under the radar of most investors and basically ignored by the media they are beginning to draw some attention. You can only hide a rotten apple so long in the barrel before it’s found. Let’s hope these problems are solved before it’s too late.

If they aren’t I predict that the resulting scandals and losses for the investing public will make even the Enron and WorldCom frauds look small.

With that in mind lets take a look at these problems and discuss what if anything can be done about them and what you as a participant in a 401k program need to know to protect your investment.

Current 401k participation, vesting, and employer matching fund rules are designed to favor the employer to the detriment of the worker. Many plans won’t allow a new worker to participate for at least 1 year and they allow the employer to take back their matching funds if the worker leaves before having several years of service. Even worse than the 1 year wait are the plans that don’t allow for any new participants or changes except during a very limited time during the year. I’ve seen plans that only allow you to sign up for a one week period twice a year. That means that many workers effectively have more than a 1 year wait to sign on. This is much of the underlying reason for poor plan participation by younger workers. It’s just too easy to forget and fail to take care of starting a plan under this type of limitation. So while Employers promote their 401k programs as a fringe benefit and point with pride to their matching funds portions they know full well that many will never see any of these benefits. They put matching funds in only to get them back in the future when the employee leaves. That’s good for them but bad for the worker and it undermines the future of our retirement system by lowering participation. 401k programs should have an automatic registration and allow the worker to keep any matching funds paid into their account.

Worse many employers aren’t putting in the matching funds that they are required to under their plan. They simply keep the money and the worker is kept unaware that the program is under funded. This should be treated like the criminal action it is but it is seldom punished and this practice has been going on for far too long. Many of the 401k programs ran by troubled industries are under funded and it’s the workers and tax payers that will pay the price for retirement fund failures in the future.

Currently approximately 75% of the plans charge more, many times much more, that they charge for regular individual accounts. 401k plans should get a lower rate not a higher rate. They get away with it because it’s not fully or fairly disclosed to the plan participants what there rates are. So they do less work for more money while hiding the fact from the investors. There are no standards or rules that require a reasonable rate or service charge for 401k programs. That allows for greedy brokers and agents to charge far more than is justified for their services. While I hate legislation in such matters it is the only thing that will solve this problem. These practices hurt fund performance and undermine future value. A fund that has an investment of 500 dollars a month for 25 years and earns 9% interest will be worth approximately 561,000 dollars. If the same investment only earns 8% it will only be worth approximately 476,000 dollars. That’s a difference of 85,000 dollars over only 25 years. That’s an average of 3,400 dollars a year that’s lost to the investor. The worst offenders for over charging for fund management are the plans that are run by the insurance companies. They might not know how to get a good yield for you but they know how to get one for themselves. The resolution of this problem will require that employers have to be more accountable for the fees they negotiate for their plans. Currently they have no incentive to care what is charged as all of the expenses are paid by the investor and the investor has no say in these negotiations. Not the best arrangement to be sure.

And of course the investment advice that is given to investors in 401k programs is very little and lacking in depth. Worse yet investors are removed from the day to day activities of the fund and their investments. They are only receiving quarterly reports and they usually lack detail. So poor performance is the norm with ROI being less than it should be. To compound the problem a lot of the choices given to the investors are overly expensive mutual funds with little or no diversification. The average plan is heavily invested in the sponsor companies stock and has only two or three different funds being held at any one time. Plans should encourage investors to build around low load mutual funds or stock indexing funds that have little overhead and reasonable management fees. Maybe it’s time that the employers have to pay part of the fees so they would have an incentive to keep costs down.

Lots of plans limit drastically the choices of what mutual funds are available for investment. What chance does an investor have when their choice is between two funds that offer little difference in there costs or the rates of return experienced. To encourage workers to have more input and receive good third party advice would go far to alleviate the problems with ROI while encouraging diversification. As we stated in part 1 too many workers have much too large a share of their money in company stock which can be risky if something happens to you employer.

So does that mean that you should avoid 401k programs? Not at all. 401k’s are still one of the best investment options available to you. It just means that you must be careful and take control to prevent these problems from hurting your investment. It is possible to prevent much of the damage once you know the problems. Knowledge and information are power and they can put a stop to most of these problems. So what are the defenses you should be using?


Don’t be over eager to borrow against your 401k program. If you have to leave the company they will close out the loan. That will be treated as a withdrawal from your fund and as such will be taxed and possibly penalized as being an early withdrawal. You will have spent the money and now owe taxes and penalties that you don’t have available. Plus you can’t put the money back in so you lose the tax deferred growth that you had under your 401k program. Believe me over the years I’ve seen many people take a real beating because of 401k loans. Just imagine you’ve lost your job, had your 401k fund reduced by the remaining loan amount, and you get to pay taxes and penalties on the amount of the loan repaid, and you’ve already spent the money. That triple hit hurts.

Don’t take the money and run. When you leave a company roll your 401k over to an IRA. Never cash in a 401k early unless you ABSOLUTELY have no choice or you will take a hit in taxes, penalties, and the inability to replace the money. When it gone it’s gone and so are the tax deferred advantages of having that money earning within a 401k program. So how expensive is it to take money out early. With a 10% early withdrawal penalty, a minimum 10% federal tax, and your state tax (if you have one), you will pay 20 to 30% in taxes plus not have the money growing tax deferred. That means that if you took out 10,000 dollars you would take home about 7,000 dollars. It’s worse still if you are in a Federal tax bracket above 10%. That’s one way to go broke in a hurry. You might as well go to a loan shark at those rates.

And last but not least take charge it’s your money.

Demand to know what you are paying in fees and expenses and if they seem high ask if they can be lowered. Ask questions and don’t stop until you understand the answers as to what your investment choices are. Talk to other workers who are in the plain with you and seek safety in numbers. The more of you involved the more you can fight back against unreasonable charges.

Study your statements and be sure that they are correct. They make mistakes too and you need to watch them. Don’t be one of those people that I get at tax time that hasn’t even opened their statements and couldn’t understand them if they did. If you’re confused or don’t understand seek out an advisor to help you find answers.

Your financial health is much like your physical health. Get a second opinion on anything you don’t understand. Your tax preparer or accountant is a good place to start. They should be willing to take a look and help you with simple questions for little or no cost.

While your 401k is a long term investment don’t get over sold on buy and hold as your method of investment. It’s ok to buy something and sit back and wait just keep watch and bail out if it ends up not working out. Even long term investments need management and no amount of time makes up for sitting for years in a low yield stock or mutual fund just because you think that you aren’t suppose to do anything but buy and hold. Fortunes are lost using that formula.

I watched a person who worked at AT&T buy AT&T stock for years as it climbed higher and higher and split numerous times. The problem was that I then watched as AT&T began its long slide down with the investor holding on all the way. When it was over they didn’t get back their original investment. Stock that at one time was worth almost 200,000 dollars ended up brining only 23,000 dollars. They had invested almost 26,000 dollars so they lost 3000 dollars and because it was in a 401k all of the 23,000 dollars they took out was taxable while the 3,000 dollar lost wasn’t deductible. I just couldn’t ever convenience them that AT&T wasn’t going to come back. They had been so conditioned by the buy and hold philosophy that they just wouldn’t sell. That’s one client that I’ve always felt that I failed even though I preached to them every year when I did their taxes. I still feel that I should have been able to get them to bail out but I never could. I just wish I had another chance at doing that. I don’t know what I could have done that I didn’t do but I’d like the chance anyway.

But that’s a story of another article on another day.

Wednesday, May 18, 2005

Part 1

While 401k programs are one of the best choices for American workers to use when preparing for retirement there are troubling developments and warning signs of more on the horizon.

The study by the large global human resources company Hewitt Associates called "How Well Are Employees Saving and Investing in 401k Plans, 2005 Hewitt Universe Benchmarks," provides a detailed look at the first problem with 401k programs today, lack of employee participation.

While most employers (especially the larger ones) are seeking to educate their employees to the benefits of investing in 401k programs employees aren’t paying attention. The numbers of employees who precipitate in 401k programs has largely remained constant for the last few years.

After studying almost 3 million employees who could participate in employee sponsored 401k programs Hewitt found that the number of workers involved in such plans only increase by about 2% last year. That increase brings participation to only about 70% of all eligible employees with available 401k programs. So 30% (approx) of employees who could be participating in a 401k program have chosen not to do so.

That’s a disturbing figure and a worrisome trend at a time when it is becoming all the more important for workers to save more for their retirement not less. We face a time of uncertainly about Social Security in this country. What, if any, benefits will be available for future retirees under the Social Security System remains to be seen. So we need to increase participation in our retirement savings programs like 401k’s if we want to be assured of avoiding a financial crisis in the future.

We also face an uncertain time as to what will happen regarding inflation. While it’s been modest for awhile energy and energy related costs seem set to explode over the next few years. That could mean inflation will be much worse than current projections predict. If inflation rears its ugly head it could be the final piece in the puzzle that spells hard times for any future retirees that aren’t properly prepared. We may yet see retirees having it worse than any time since Social Security was implemented.

When you look at the best group in the study (those above 30) they only had an average balance of approximately 69,000 dollars in their 401k accounts. That’s much better than the under 30 group but that’s not nearly enough when you consider how long they’ve been saving. They need to do much better than that or they’ll be at the mercy of Social Security a time when it may not be there.

Of workers less than 30 Hewitt found that only about 46 percent participated in a 401k program. And worse yet one in four of this group had an average balance of less than 5,000 dollars saved in their 401k account. That’s certainly not going to provide much security in their retirement. This is the very group who can least afford to not be saving more for their retirement. It’s only by starting to save at a young age that most of us will ever manage to have any meaningful accumulation in our retirement accounts. It’s the magic of compounding interest over time that creates the necessary return on investment to provide us with financial security.

So participation in a 401k or something like it is critical and the younger we start the better. This study showed however that this isn’t what’s happening. We are starting later and trying to catch up by saving more as we get older. The wise course would be to reverse this and save while we’re younger and let compounding interest do the heavy lifting. The younger we start the less we have to save to have the same amount later on.

Employees also aren’t doing any better at diversification or developing balance in their 401k funds than they are about saving enough. They need to take responsibility and educate themselves so they can do a better job of seeking to keep funds invested in securities and financial products fitting their age and risk tolerance. It isn’t hard to lean enough to keep your funds spread among a group of securities to protect capitol, keep your risks manageable, and still make a good ROI.

Add to that the fact that far too many employees are keeping too large a percentage of their 401k accounts invested in the company that employees them. Just ask the former employees of Enron and WorldCom about the wisdom of not diversifying your portfolio beyond the company that you work for. A very large number of Enron and WorldCom workers learned about diversification too late to ever recover from making that mistake. Not keeping all of your eggs in one basket is still very sound investment advice.

And last but not least is the fact that Hewitt found that while almost 80 percent of employees who were in a 401k plan contributed enough to receive some company match in 2004 only one in three (31 percent) contributed enough to obtain the full company match. As many as one in five employees (22 percent) failed to contribute enough to obtain the full 401k company match. That’s giving money away by default and is just plain silly. If I ran an ad tomorrow saying that if you came and deposited money in your bank savings account I would match some portion of it I’d have people lined up for miles. Yet that’s just what your employer is promising to do and he has a hard time finding takers. So contribute enough that they give you all the money you can get through matching funds.

Well this brings part one to a close. We can wrap up what we learned in part one about 401k’s with this simply list;

1. Start saving as young as possible.
2. Take advantage of a 401k program if you have the chance.
3. Keep your holdings diversified for your protection.
4. Educate yourself so you can take responsibility for and manage your portfolio.
5. Give at least enough to get the ENTIRE employer match available.

Just remember financial security and peace of mind can be yours! It’s more a matter of discipline than anything else.

In Part 2 we’ll finish up our look at 401k programs and what else we have to worry about while investing in them.

(The entire study this article was based on “How Well Are Employees Saving and Investing in 401k Plans” is Available for $350 by contacting the Hewitt Information Desk at (847) 771-2500 or

Tuesday, May 17, 2005


Yes January 1, 2005 is rapidly approaching and with it the new Roth 401k will finally be available.

It offers to the 401k investor the advantages of escaping taxes on the growth of their 401k contributions just like the Roth IRA program has for individual IRA investors. I predict it will soon grow to be a major factor in many investors’ retirement plans. The growth of individual Roth IRA investor programs will pale beside what the Roth 401k’s are going to do. Finally we have a good investment vehicle that offers tax advantages as well as allows for decent contributions and it’s available to many if not most workers. It’s going to take off as soon as the investors realize what an opportunity it is.

Remember there’s going to be a lot of pressure on individual investors over the next two or three years to find their own security with Social Security benefits being placed in jeopardy. Doubt, Social Security, and retirement planning don’t go well together. (By the way stay tuned for an article coming soon on this blog that will discuss the Social Security issue in depth.)

Remember there’s no indication that any “private accounts” that end up being created under Social Security will escape taxes or experience good grow so stake out your claim on the future and contribute as much as possible to any IRA and 401k programs that you have available. (More coming soon on how to tell if your 401k is a good one and the danger that it is being under funded by your employer.)

Also remember only about 1/3 of the employers now offering 401k programs are signed on to offer Roth 401k’s on the January 1st start date.

If your employer isn’t one of them now is the time to start asking “Where’s my Roth 401k. Show me my Roth 401k.” You need to have the option to be able to make either Roth 401k contributions or standard 401k contributions based on your needs. Even if the Roth isn’t best for you right now that may change in the future so keep your options available!

Remember you need check out the new Roth 401k investment opportunity and see if it’s not something you should be investing in BEFORE January 1 so you have time to act as soon as it’s available too you.


Attention: All of you out there who are in a position to be thinking about filing for bankruptcy need to act quickly or risk losing the opportunity to file under the old bankruptcy laws.

It may already be too late in some areas due to filing delays and over loaded courts. So….. PLEASE….. If you have any thoughts on filing for personal bankruptcy yesterday was too late and there may not be a tomorrow.

The new bankruptcy laws as passed by Congress and signed into effect by President Bush are the most sweeping in years. Maybe the most profound changes for the average filer since the bankruptcy laws were first written are to take effect very shortly.

It will take away many if not most of the basic protections that have existed for those wanting to file Chapter 7 bankruptcy and force them into the much less desirable Chapter 13 bankruptcy repayment procedure.

I’m not going to bore you with the complete list of changes but this bill must have been written by the banks and credit card companies and given to the legislators who sponsored it.

Using the pretense of stopping bankruptcy fraud and misuse Congress has passed and the president has signed into law the worst piece of legislative skullduggery I’ve seen since tea pot dome.

The financial industry has finally gotten their way and the average bankruptcy filer will be the loser. This bill is more to enrich the financial industry than prevent fraud and misuse. What ever the banks and credit card companies spent on buying Congress off on this bill it was a bargain.

Basically the changes that will have the most negative impact are;

No longer will you get as much protection for your vehicles, your home, or other personal property. The protection left under the new law is a gutted version of what it was.

And worse yet are the new rules on how you figure you’re living expenses. Now you will use the IRS amounts allowed under the tax code not your ACTUAL expenses. This results in a much lower allowance for expenses. In many areas of the country the results are so low as to be ridiculous.

That one change alone will result in many filers being kept from Chapter 7 bankruptcy all together by distorting how much a filer has to use for repayment of debt.

That leaves filing for Chapter 13’s bankruptcy repayment their only option. Worse still using these low monthly expense amounts will require much larger monthly payments to pay off the filers obligations. You may be forced out of being able to file under Chapter 7 bankruptcy and then made to pay more under Chapter 13 bankruptcy.

Not fair but be that as it may it’s now the law so be prepared for the worst when you talk to your lawyer.

So now you know. File now or risk being forced to repay at greatly increased monthly payments.

I intend to write more on the new bankruptcy and what it means in a later article but I felt obligated to get this one out ASAP since time is running out for files to avoid this new law.