Here's why. I'm a former wholesaler. The planning business is currently focused on growing advisory based practices, no commission and an asset based fee charged for management. The majority of business is still wannabe Gecko's as previously described, commission based brokers posing as planners. A commission guy is incentivized to churn clients and maximize earning without losing client, an investment advisor is incentivized to grow your assets as it increases his expenses. And by the way they know less about finance than you will ever imagine. They actually don't care or believe in anything besides hairgel, their existence, and the raging superego behind their unjustified salaries. Wholesalers are generally no better. Finance has attracted these, lets be honest here, whores because of the high salaries. Problem here is there is no passion, so to succeed they mislead and defraud. Even Investment Advisors have fee structures that would make Bogle cringe. Think of the trilions charged in fees over the past ten years, it truly is the wall street machine. Now, we as a society of shareholders are enfranchising owners but not accountability. However, that is another story and why guys like Icahn earn their daily dole. Also, everyone and their brother chases after high net worth clients. No one cares about mass market, they miss the boat. We built a product that could be packaged in turnkey solutions for mass market where the client goes to a website, fills out questionairre and receives turnkey retirement solution. If more advice required, telephone in for an hourly fee. Sometimes these brokers crack me up, the truth is they think they are so much better than Joe sixpack that why bother with him. And they lead lemings off a cliff over and over again. A former high school classmate, who was a GED graduate because he dropped out due to behavior and drug problems, is now a wirehouse broker. They need to increase the difficulty of the S7, I finished the test in about an hour a few years back. FINRA, set the bar please.
Mr. Nuclear Security Guard was only unemployed for 3 weeks..too bad he took a 11k tax hit for cashing out his 401k. A loan shark would've given him a better deal than that.
I thought the penalty for early withdrawl was the normal tax and a 10% penalty. Guy must have been in a pretty high bracket?
Well, the "premature distribution" is added to your other income for that year... bumping up the tax bracket.. + 10% penalty... His $19K net sounds about right.
Yeah see... he was dealing with The Gummint... and they don't have to give you no deal better than a loan shark.
Understood and something I constantly find myself having to say, but for the flip side... Is a nation of capitalists responsible for the social lubrication that will allow former factory workers to become 'knowledge workers' ala Drucker? Bill Gates uses his philanthropy to build computer labs in inner cities? What a nice guy, creating his market. This is the sad truth, but if the public sector fails these people we as capitalists much allow for their promotion. As traders we know the free market system does not perform well at subsidizing losers, and trading is a zero sum game but society and life in general is definitely non-zero sum. I do not favor equality of result, but equality of opportunity is the ideal of American capitalism.