Current Events > Ever realize how big a GIANT SCAM 401K really are?

(+) Yeah! (+)

UnfairRepresent posted...

So it's absurd to have this "ooh you have this small fortune floating around in the netherspace!" "Can I access it now?" "NO!"

It is in stocks that the elites can cash out from though

Not in the nether

If you were allowed to cash it out they would lose value and money

That is the scam

WingsOfGood posted...

It is in stocks that the elites can cash out from though

Not in the nether

If you were allowed to cash it out they would lose value and money

That is the scam

agree

I always opt out every year even though my company will match it.

Retirement sucks anyway since people usually die sooner compare to those that work until they drop dead.

With the way the world is heading, most of us probably won't have the option to retired anyway. It's better to spend your money now and get that extra vacation trip you want rather than saving it for an unknown future.

The problem is the needs of retirement have grown beyond what current safety nets provide, and probably beyond what they reasonably can. Just putting money in the sock drawer, even without inflation, isn't enough to last long. 401Ks promise what get a lot of people rich: buy assets that grow in value over time so you get more than you put in. You can't tap them because of the reason people are pushed to get them: too many are too irresponsible to save something, and too selfish to die quietly when they're in poverty because they didn't save much for their old age, probably out of a misguided belief they'll die before then.

Now if the government could promise better returns and standard of living off social security they probably wouldn't be seen as a good investment, but that system's stretched to the ends already. Most of us that know seniors have a few stories of checks for 700 a month, not covering bills, let along the additional medical (Canadians get the fresh concept of offering Medical Assistance in Dying pamphlets). But no one, especially people like yourself that use phrases like late stage capitalism, wants the government to do much of anything to generate needed return, and only want others' taxes increased, so we're stuck with them as the better option.

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.

UnfairRepresent posted...

agree

Yeah someone gets it!

lightwarrior78 posted...

But no one, especially people like yourself that use phrases like late stage capitalism, wants the government to do much of anything to generate needed return, and only want others' taxes increased, so we're stuck with them as the better option.

Bro

What a dumb paragraph

Do you guys not understand how employee matching works? Even if you take it out and get a penalty you still are coming out with a positive gain. Just don't take so much out at once it raises you into a different tax bracket. With my employer retirement accumulation plan added with my 401k I have 14k in it right now and I've contributed less then 4k.

I only go to employer match.