LogFAQs > #970448208

Ok, Ill bite on this topic. Not so much to defend 401Ks per se - as I do recognize the shift from pension-based plans to these has shifted the burdens and risks to common folk - but literally just to share my personal experience.

Ive been contributing to a plan now for 21 years, and have been tracking the performance in depth for the last 10, starting in 2012 just when we were starting to exit the crash of 2008-12.

Heres a chart depicting my contributions and balances over time:

https://gamefaqs.gamespot.com/a/user_image/3/1/7/AAb05zAAECIl.png

What this ultimately shows is:

• Life-to-date Ive contributed about $140k (dark blue line)
• Employers match of about $80k
• Current balance, even with recent market volatility, is about $375k (top red line)

So all in, Ive more than doubled my personal contribs, as well as have received the associated tax deductions from that.

Things looked bleak back in 2008-12, no doubt. Thats why I started tracking this in detail. But even then, I was never once in the hole or at a loss due to my employers contributions.

This has been by far my largest and best performing asset over time, and when looking back I wish I would have put in more and put it in earlier. There really is something to be said for time in the market vs timing the market.

Its allowed me to do a few things recently:

• I took out a loan against it in 2018 to pay off some debt and start building out a separate brokerage account. Ill be paying off the loan here in a couple months and will probably take out another one to do the same.
• I used a CARES act withdrawal in 2020 to take out funds to use as a down payment for a new house. Ill be repaying my last third of that back this coming year.

Both of these options involved minor fees, and no tax impacts.

Like someone earlier in the topic said, stocks are on sale and cheaper than they have been for a while, so it really is a decent time to get in vs at the peak a year or 2 ago. Sure, there is risk, but options really are limited. I thought otherwise many years ago and limited contributions in order to get more cash at the time. As mentioned, when looking back and seeing what has actually transpired since then, I can say with certainty that was a mistake.

Im not saying go crazy or put in more than you can afford, but I do feel pretty strongly that its good to start somewhere, and at a minimum do what you need to do to get the company match. That way youre really not just playing around with your money only.