401(k) Debit Danger


	401(k) Debit Danger

Tina Russo

9-26-2008 8:41 AM

2740 views

tags:

401(k), debit card, reserve primary fund, bruce bent

Tina Russo says:

The creation of the 401(k) debit card makes it even easier for you to tap into your retirement savings. That's not a good thing.

1 Comment |

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9-26-2008 11:04 AM

deb2012

Bent is "bent" to say the least

At least legislation against this is on the docket:
In July, U.S. Sens. Charles Schumer (D-N.Y) and Herb Kohl (D-Wisc.) introduced legislation barring companies from offering these debit cards.

"Companies looking to raid Americans' 401(k) accounts are making a comeback," says Schumer. "This legislation will protect people's nest eggs from companies peddling debit cards that can deplete retirement savings with a simple swipe."

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/0cc9720b-515b-4845-84f9-0a676a132744/5EA7597B-A9DC-4F8D-A0EB-FB599673B4FE/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html" href="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html" style="font-size: 11px;">www.forbes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html"><P>Until Sept. 16, 2008, life was good for Bruce R. Bent, founder and chairman of cash management firm The Reserve. </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html">By July 2008, his modest Wall Street-based cash management firm amassed an impressive $125 billion in assets under management.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html">So the news early last week that Bent's own $66 billion Reserve Primary Fund had "broken the buck," sinking below it's $1.00 NAV to $0.97, and would suspend withdrawals must have come as a rude shock to investors. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html">Despite his recent setback, Bent has a new financial innovation aimed at another important market for savers. Bent wants to be the father of the 401(k) debit card. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.forbes.com/finance/2008/09/22/reserve-primary-bent-pf-ii-in_ms_0922money_inl.html">The card works like any other ATM card, but the cash you withdraw comes out of your 401(k) via a special <A rel="nofollow" href="http://www.forbes.com/finance/2007/09/11/money-market-retirement-pf-retire-in_js_0912soapbox_inl.html?partner=lingospot">money market fund</A> set up by Bent's firm.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/5EA7597B-A9DC-4F8D-A0EB-FB599673B4FE/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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