Thanks to then-Commissioner Cecilia Jones, wildflower plots bloom along South Walton roads. Since the county refrains from mowing the plots, Gulf Coast Blue Lupine often flourishes, an unintended consequence for Blue Mountain Beach’s namesake. The Village of Blue Mountain massacred, via the Bush Hog, a stunning stand of Lupine, another unintended consequence. Landscaping and Round-Up also destroy, unintended I’m sure, Lupine stands, a plant only found in Walton, Bay and Okaloosa Counties.

Last month PBS Frontline featured “A Retirement Gamble.” While I gave it an “A,” most of the industry loathed it. Don’t shoot the messenger, y’all. Frontline had me from hello featuring my long-time heroes, Zvi Bodie, Jack Bogle and newbie Helaine Olen, author of “Pound Foolish.” Granted, Frontline waxed nostalgically for the good old days of defined benefit plans. Frontline downplayed the reality many workers never qualified for pensions, plus 401(k) plans are portable and potentially more beneficial given our mobile workforce. Every person/couple bemoaning 401(k) plans seemed to be living an upscale, fashionable life; Apple laptops and cable TV are luxuries.   

Frontline hammered the industry over 401(k) fees. 401(k)s are complex critters. For instance, a plan has to meet all kinds of government-mandated tests to make sure that the plan doesn’t disproportionately benefit higher-income employers and owners. What I don’t get is the industry fighting fee disclosure like Audie Murphy. The industry trots out a red herring suggesting fee disclosure will raise costs. The fees are being paid. Just add ‘em up; it will be good for the industry and employees. For instance, Rosemary Beach incorporates ETFs in their 401(k) plan thus lowering costs and improving options. 

Take heed anytime you hear “Your 401(k) doesn’t cost you anything.” That’s only true if you ignore 12B-1 fees annually draining your investment; a fee completely absent from ETFs, DFA and Vanguard mutual funds. Also implied is the employer picks up all costs, a fact belied by the 12B-1 charge. We have only taken baby steps on the road to retirement plan cost disclosure; the industry has historically done an exceptional job of hiding costs.   

Congress deserves their fair share of abuse. As federal employees, Congressmen/women have access to the Thrift Savings Plan (TSP) providing low cost, index investments in the S&P 500, U.S. small companies, international market, the U.S. bond market and essentially a money market type fund or all you need. The TSP has annual expenses around .2 percent, if your 401(k) has all-in costs of 1.5 percent, you will have 70 percent of Barney Frank or Michelle Bachmann’s balance assuming identical returns. The TSP beats any 401(k) plan — hands-down. 

Robert Brokamp coined the term 401(k) industrial complex at his blog, An unintended consequence of the 401(k) industrial complex means saving 8 to 10 percent of your salary beginning at age 25, earning 3-4 percent over inflation for 40 years then managing the withdrawals efficiently for 20-30 years. If you lose your job, get sick and can’t work, drop out of the labor force to raise a child or get divorced, then tough luck. Ditto if you retire when a bear market starts. At least you have Social Security.

The tax attorneys who pioneered 401(k) plans had no clue what they wrought, another unintended consequence. 401(k) plans were intended to supplement Social Security not replace it.  

Buz Livingston, Certified Financial Planner has the only investment management firm in the entire world headquartered in Blue Mountain Beach. He helps clients along Florida’s Emerald Coast and around the country with financial decisions. For more information, call 850-267-1068 or visit For financial tweets follow him @BuzLivingston.