

401(k)s are a sham - lisper
http://www.salon.com/2013/08/06/big_finance_lied_401ks_will_not_save_aging_americans_partner/

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jandrewrogers
The problems with retirement savings going forward are many and varied.

First, it is increasingly difficult to achieve good average returns in the
financial markets as a small-time retail investor. There are myriad reasons
for why this is but the fact remains and is unlikely to change soon. That so
much capital is chasing increasingly meager investments is one of the reasons
we have cycles of overheated markets and crashes.

Second, Americans are _terrible_ at saving money. An unbelievable amount of
income for the average American household is wasted on frivolous consumption
and collecting status symbols. When I was genuinely poor I always managed to
save some money (indeed, it is what put me in the habit when I was not poor)
but I know countless people who make six-figure incomes who have no savings
and lack even the most rudimentary discipline to do so. In most cases, socking
away 20% of their take home pay would not even require a material lifestyle
change, just making more prudent financial decisions. This falls squarely on
individual Americans; few have legitimate reasons why they cannot save at
least some money.

Lastly, the government really can't solve this problem for us by doing the
saving for us. As poor as the return in the markets is for many people, the
returns on capital handed to the government are consistently even poorer.

For most people, the second point is the most important. Live below your means
and save the balance. 401(k) is really beside the point. I don't even put my
savings into retirement accounts, in part because the investment options suck
in those accounts. Simply not pissing money away on frivolous and imprudent
expenses is sufficient to start building significant savings for most people.

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bifrost
This article is so slanted I am amazed that its not hawking some kind of
retirement product. You'll note that the article cites research by the
"National Pension Rights Council", an organization basically only quoted by
this article, and an organization likely only interested in preserving its
outdated way of dealing with retirement funding (IE: 100% employer funded).

While figuring out what to do with your IRA or 401k may seem daunting, its
not, and its certainly better than a pension...

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samolang
The only actual point this article makes is that its hard to save up enough
money to live off of for 20-30 years. You can't trash 401(k)s without
providing an alternative that is better. It's hard to save for retirement.
That's a fact of life. 401(k)s are one of the easiest ways to do it though.

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3825
The best thing about 401(k) is the employer-matching. Am I missing something?
It is just an investment vehicle, right?

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samolang
Plus you don't pay federal income tax on the money when putting it in and then
don't pay capital gains taxes on your gains year after year. They neglect
mentioning that not paying capital gains on your 7% gains saves you more or
less 1.4% of your money with is more than the 1% fee they complain about.

