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Getting Personal: Power of attorney, hemorrhaging 401(k)s

On tap this weekend: One listener wonders about the power of attorney, what it means and what responsibilities come with the role. Another listener asks for advice about investment choices for his parents, and a third wants to know why his 401(k) has been bleeding money for 15 years.

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I think you missed several boats with the man (steve?) who lost 15% in 401k over 15 yrs. The most important issue was to stop the bleeding. If he starts a Roth as you suggested (without asking if his income allows a Roth) and makes the same investment decisions then he will lose money in that acct, so thanks for nothing. Probably he is is one of the avg investors who buys high and sells low, i.e., he switches investments from equitites to cash or bonds when the mkt is at its worst, hence soon to rebound. Getting him out of his losing strategy would have been the most important help he needs.

Your show have in general good advice, but my heart bleeds to hear so many american are lacking simple common sense and very basic calculation when it comes to handling money. we all can benefit great deal who invest in 401k if you stop advising people to invest in stocks to loose hard earned money when none of you I think work for banking sector. I agree it is important to save but when DOW and S&P index are at same point as 2000, I am sure most of american lost money by investing in 401k choices offered by their employers. When there is minus growth it is loosing way instead of grow money by investing. Do you have any advise other than investing in stocks?

I think the first callers parents could also look into graduating CDs at their online financial institution with manageable amounts that is extraneous to their emergency funds- with graduated expiration dates. In other words, put 2k in a 3 month CD that might have a higher rate, another similar amount into a 6 month CD, another in a 9 Month CD and another in 12 month, another in 18 month. Or some lesser combination of the above. In this way, if they do discover they might need some of that money- they simply do not reinvest into another CD and they can get money coming back in periodically that has matured at better rates. This is still a conservative approach, that may add a few extra $$ for them over the course of the year- as long as it is planned well with funds outside of their emergency needs.

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