For most Americans the 401k starts as a line on their first HR form: tick the box, let a slice of every paycheck disappear into an invisible account, and trust that decades later it will deliver freedom. The brochures promise that if you just stay disciplined, skip a few nights out, keep driving the old car, funnel cash to that account, you’ll retire a millionaire.
However, for millions the ending is not a tropical-beach postcard. After forty years of work and sacrifice, the balance they unveil is only a few hundred thousand dollars, barely enough to keep budgeting like a broke college kid for the rest of their life. That is not a flaw in the design; that is the design.
The 401k replaced the old-fashioned pension plans of the previous generation. It shifted the responsibility for retirement income away from employers and placed it squarely on the worker’s shoulders, while Wall Street collected fees for managing the money. In theory the deal sounded fair: contributions reduce your taxable income today, the employer might add a match, the market works its magic through compounding, and at 65 you ride off into the sunset. In practice the average sixty-something American today holds roughly $200k - $250k in their account; even those regarded as “good savers” often top out around half a million. At the traditional 4% draw-down rule, that pot pays $20k a year before taxes. But wait… Those figures include the wealthiest billionaires pots as well. What about the median values? $87k…. 4% now pays you $3,480 per annum. How’s that retirement looking now?
A figure that feels closer to survival than to freedom.
Read the rest of the Medium article here
https://medium.com/@401jkk/401k-the-45-year-trap-513fe3b1ad65
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The system is rigged against us in so many ways
But we're creating something to fight back
https://i.redd.it/5jba92y4hq8g1.gif
The medium article about the fee trap is great too
https://medium.com/@401jkk/the-401-k-fee-trap-how-1-compounds-into-retirement-theft-f912aed4262c
One huge take way is that if you don't get employee match you are better off not choosing a 401k
Great read
Always a good read from the medium articles
401JK resonates with so many. Such a great idea behind this project!
Why is this post getting downvoted? Seems like there is a group of people that dont want the 401jk message to be spread
It doesn’t matter, it’s their loss.
Interesting take.
Love it
Worked for 15 years, never signed up for 401k. They flip your money for 40 years , penalize you if you want to take it earlier, make millions and you get peanuts at the end or simply die. Needless to say that I saved and invested it on my own terms, properly and watching the sunset...
Yeah this shit is just unfair as fuck. Take your future into your own hands people. Join the movement, invest in 401jk and retire before your knees do
💯
Whos 401k has a 40-45 year maturity? Mines set to pay me 7k a month when i retire and that money doesn't run out until im like 91 so i can probably move that up.