Comment by dabidab
3 hours ago
This. People are locked in their 401k and penalized when taking it out says a lot about what it is.
People should honestly read Killing the Sacred Cows it’s an eye-opener for anyone invested in 401k.
3 hours ago
This. People are locked in their 401k and penalized when taking it out says a lot about what it is.
People should honestly read Killing the Sacred Cows it’s an eye-opener for anyone invested in 401k.
A "401(k)" is not a monolithic entity. In practice, most employers offer a choice of funds, with the most popular being a year-targeted fund that rebalances between equities and bonds as you get closer to retirement. Having said that, you can probably dump your entire portfolio into government bonds, small cap stocks, or euro futures.
And your proposed alternative? Please provide at least 50 years of historic returns
If I could pick from any possible retirement plan, I'd want in on the UK pension system that's guaranteed to beat inflation and earnings growth. Until the money runs out, at least!
> …says a lot about what it is
Doesn’t it say that it’s a retirement fund, intended to be saved until retirement age? The 10% penalty is little more than a wrist slap level deterrent, too. It’s usually like ~1 year of returns. Not a huge deal if you need to dip into it.
(There’s plenty to criticize about the whole 401k system of retirement accounts. But these criticisms seem misguided)
I mean put it in context of the OP.
People putting retirement funds in a pile of companies that often have little impact on local communities they live in.
They’re changing laws to fast-track sketchy IPOs, putting hard earned money at risk why? So we can send people on a death-mission to Mars?
Point being, they are doing what they will with other people’s money and won’t suffer the consequences. Removing the checks and balances is exactly how financial disasters happen.
You can move your 401k money between several funds at any time.
Exactly right, there's even ones so conservative they market themselves as cash equivalent. Basically zero gain/loss in those funds. If you're so worried then go login to your 401k and change it.