/biz/ - Business & Finance

>>17396349
i get to avoid taxes for now and I have $500K in them right now and saw a 30% rise in 2019. If I had taken that money out I'd have blown it on shitcoins, gadgets and hookers so I am glad they exist.

They are, but you aren't supposed to talk about it.

>>17396349
It's good only if your employer matches your contribution. My employer matches up to 5% contribution of my paycheck. And then on top of that every year they add 2% of my salary as one lump sum to my 401k at the end of the year. That shit snowballs and it's a good idea to just have a savings account Anon.

>>17396547

>>17397576
Yeah employer matches are really the only reason to do it. But even then those can just be golden handcuffs, especially if they make you stay X years to get their contributions vested

>>17396349
60 isn't even close to being dead unless you live in Africa or something. A 401k gives you means to retire somewhat early, and also leave an inheritance if you socked away enough money. You also don't necessarily have to have an all stock 401k. You get one that's mostly cash if you're a complete retard.


The only people who think 401ks are a scam are retards who don't understand the market.

>>17396547
I wish it was illegal to lie on the internet

It's not really a scam. Your contributions reduce your taxable income which is nice. However, it shouldn't be your sole financial vehicle for retirement.

You should definitely also have some liquid cash, a Roth IRA, dividend stocks, crypto, precious metals, etc.

I would just be wary of your state's/country's laws regarding cashing out and taxes. Try to do it in a tax friendly place.

It's free money. Instant 2x from matching, then you get taxed when you take it out instead of using post tax income and then getting taxed again when you take it out. Assuming you picked where the money goes you could see some nice growth from this. I usually take matching and put the rest in taxable accounts since I want to do early retirement meme, but it will make a nice boost once I can withdraw without penalty. Social security is the scam one. Can't say where the funds go and can't get any benefit from it after it's bankrupt.

Be me
>dump a percentage of my pay into a company Roth
>figure since it’s already taxed I should be able to take it out
>no anon, you can’t touch any of it until your 55 or you quit, sorry
Fucking scam. No match either.

>>17397576

>it's good

You are NEVER EVER EVER going to see that money again, you do understand that right? That money is GONE. It's invested in the largest stocks and equity bubble in human history, which is about to burst any year now. It might not be this year or the next, but if you're under 40 you have 0.00000% chance of ever touching this money again.

You know where it's going: https://youtu.be/KRnddZ1t8SA

>>17397576
>implying your contribution isn't money they were going to give to you anyway

now it's locked in a boomer ponzi scheme account

They are a scam. Most 401k plans restrict you to only being able to invest a few cherry picked high cost funds. I once worked at a company where the lowest expense ratio of all the stock funds was 1.9%. I did the math and it was better for me just to pay taxes on it than pay fees that high.

But now I have a plan where I can transfer some to a brokerage account and invest it myself. I still have to pay fees when trading though, so its still somewhat of a scam instead of being able to use the many brokers that now offer free trading.

I don't understand why its not like an IRA where you can just do it yourself, why is tied to an employer? (because its a crony capitalist scam)

>>17398090
So why not just stop contributing and put aside the money that would have been put in your retirement account to trade with on robinhood?

>>17398090
>Most 401k plans restrict you to only being able to invest a few cherry picked high cost funds.


Fidelity manages like 1/3rd of all 401ks and they have a fairly diverse choice of funds. You can dump all your money into a low cost S&P 500 index fund for the next 40 years and pay almost nothing in fees.

>>17398142

That's what I did until I switched jobs

>>17398156

Yeah, its getting better now days, but for years after they started 401ks it was an absolute scam.

My employer uses a Simple IRA and the firm that manages ours I was actually in the red so I cancelled mine. Even though my employer matches 3% I was still down 3% for the year.

>>17396547
>I have $500K in them
Wrong. The bank has $500K in them. You have nothing.

>>17398300
Are you retarded? Banks have nothing to do with your 401k

LOL, you guys crack me up. It's a 100% return on investment the moment you make it (if employer is matching 100%). What other investment is GUARANTEED to do that? Stocks would have to crash 50% for you to break even. And at that point the only thing you'd wish you'd done is stuff more cash under your mattress.

>>17398405

We're talking about 401ks, not employer match. And its much better to get the employer match straight up then have them subtract it from your salary and act like its a bonus when they add it to your 401k.

>>17398405
my employee pays me twice as much as i pay in. I could not save at all and i would end up with 1 million at my retirement age but it want to quit earlier so i gotta save some money.

>>17396349
You're forgetting the part about your employer holding a portion of your wage hostage unless you pay into the ponzi. That "match" isn't as generous as it sounds

>>17398425
It's an incentive to get people to pay for their own retirement. Obviously cash would be better, but tax advantaged savings will always beat non-tax advantaged savings when investing in comparable funds.

If you're going to complain about 401ks it should be that they have failed to provide retirement for most Americans. If I get divorced, sued, or injured my 401k funds can be raided by vendors/lendors to pay for my debts. They can't do the same to a pension fund.

>>17398556

Exactly. 401ks were originally the replacement for the pension. Instead of companies rewarding long term employees with pensions, big government took over that cost and incentivized people to throw their retirement savings into equities. Companies got rid of pensions and the government ran retirement savings. It was crony capitalist scam to pump money into financial companies. 401ks absolutely failed to secure people's retirement as a replacement for pensions. 401ks 100% failed, all they did was prop up financial companies who run the plans. Maybe they have finally become slightly less of a scam but that doesn't mean we wouldn't be better off with straight up getting tax breaks or a higher salary immediately than having the government coerce us into pumping our money into equities, and relying on the government's promise that they won't tax us anyway in 20-40 years.

>>17397941
Oh shit I just realized I think mine does that. And for a measly 2 percent while I have to put in FOUR PERCENT. What a sham indeed.

>>17398733
I think it takes 3 years to fully vest, too. Fuck I should just go all in on crypto with that money

I wouldn't say it's a scam, but it certainly is one of the greatest ponzis in human history that solidifies a nation's economy.

How else would you incentivize the people to continue to keep their money in a nation and prevent capital flight, as well as keep them focused and good citizens for the future, as well as promise them a comfortable future (whether it is real or not), and keep the economy of that nation strong?

You keep taking the money you earned and put it back into the market.

>>17396349
They r

>>17398686
This isn't crony capitalism. This isn't big governement.

>Instead of companies rewarding long term employees with pensions, big government took over that cost and incentivized people to throw their retirement savings into equities.

Companies are free to choose how (and if) to give retirement to their employees. Companies have also chosen to renege on their pension deals for decades now. It doesn't matter if 401k's existed or not. Pensions are a thing of the past. They're never coming back.

The only thing the government does is determine if its best to have potential retirees have SOME savings. 401ks are the bare minimum incentive. It's a tax DEDUCTION, of less than 10k per year for the vast majority of Americans so that they have some savings.

If you believe that a <10k tax deduction is crony capitalism you're basically a libertarian, and thats a whole other discussion.

>>17398817

You don't want to shit where you eat anon.

>>17398733
>>17397941

Only employer contributions are "vested". What you put in is yours regardless of how long you stay.

>>17398893
>Only employer contributions are "vested". What you put in is yours regardless of how long you stay.
Well I knew that. But the match is so fucking low

>>17398843

Before 401ks if a company didn't offer a pension, no one would work for them long term. A pension was a requirement to be a competitive employer. Then the government created 401ks and companies marketed them as a replacement for pensions. All of a sudden it became a competitive advantage to have a 401k, let the government pay for the retirement, and market it to employees as the equivalent of a pension.

Then then government regulated pensions, and required they hold a certain percentage in government bonds, then the government lowered interest rates to ridiculously low levels. The government made pensions a massive liability and bankrupted them. 401ks and low interest rates are what killed pensions. The government killed pensions to force people to invest in financial products.

It doesn't matter if its a tax deduction. They could just lowered overall taxes instead. Whether the government taxes more or less doesn't really matter, it just affect the money supply, how they change taxes on different things is how the encourage or discourage investment. And 401ks encouraged the masses to funnel their savings into the financial industry. 401ks are the epitome of crony capitalism.

>>17396349
they are, and you'd have to be an absolute moron not to understand that; congrats anon, you're possibly not an absolute moron for figuring it out

>>17398907
Depends on your employer, but you should be saving 10-15% of your salary, so a 4% match is a significant portion of your retirement savings.

Personally I invest about 40% of my income so I can retire early, but I max my IRA and go beyond meeting my employer's match. I don't max my 401k contribution to the 14k/year limit though, because I won't have access to it until I'm retired.

Again, regardless of how little the match is, its a GUARANTEED 100% return on investment. You should use it.

>>17399018
Do lowering taxes incentivize people to save for retirement?

The answer is clearly, no. Taxes are at historic lows and it has no impact on people saving for retirement.

It's also bizarre that you keep using the term "crony capitalism" in this context.

I should ask, if you're not a libertarian, what government regulations would you approve of to incentivize people to save for retirement?

Again, lowering taxes has not worked. Companies giving cash instead of 401k plans has not worked.

>>17396349
And this why you will be cleaning shart off the floor at Walmart when you're 70.
Starting a 401k early in your career is the single easiest way to retire with a million dollars or more.
>B-b-but but wage cuck all your life and then be too old to enjoy your money.
A 401k is just one bucket to put your money into. You can still retire early if you know what you're doing.

>>17398021
I don’t have $500K in mine but otherwise agree with that anon. The total return in mine at its recent peak was nearly 40% yoy because of my heavy weighting in emerging markets. My match is 6% so can’t leave that on the table desu famalam

>>17399129
You're just making up bullshit I max out my 401k ($19k year) and I'm only in the 20% tax bracket.
Lots of people do.

>>17396349
>made-up of worthless securities that created the 2008 collapse
My 401k is mostly an SP500 index fund.
How is the SP500 worthless and how did it cause the 2008 bust?
Be specific.

>>17399240
32% of Americans have ANY amount in 401k
(US Census Bureau statistics)

13% of Americans with ANY amount in 401k savings maxed it to 19k in 2018
(Vanguard statistics)

What does your data say?

>>17399299
My data says that 68% of people too dumb/lazy to get a job with a decent 401k.
My data also says that you don't have to max it out to get a tax benefit.
Not a lot of officecels can afford to put $19k a year aside. Many people still contribute over what they need to get their match.
So anyway, why is a 401k a bad thing just because not everyone takes full advantage of it?

>>17399405
You're making my argument.

401k's are not bad, you should at least match the employers contribution.

Who are you arguing with?

>>17398021
>>17399221
500K is not that much in your 401K if you've been maxing for 10 years, get matching and you're all in equities. But yeah keep believing the 401K is a scam and shitcoins are better investments.

this is literally why the fed will never ever let the stock market dump more than 10-20% and rather just prints money so everybody who has to deal with dollars takes the burden wheter he is in the stock market or not.

>you make 100% return right off the bat with a company match
>Can withdraw the money for a down payment on a house tax free.

yup i'm thinking your retarded.

>>17397576
>Numbers on the screen says I'm rich, but can't take the money out.

Looks like a ponzi, smells like a ponzi. But I'm sure you are right anon. You aren't getting scammed by boomers. Oh also don't forget to make children, at least 2. More the better.

>>17399717

because it's a tax free retirement account. of course their are going to be penalties. Stay poor.

>>17396547
>If I had taken that money out I'd have blown it on shitcoins, gadgets and hookers
This.So much this.
DElayed gratification amirite.
Have fun with your jewpaper whn you will be 70 yo. Plenty of time to enjoy hookers then.

lmfao why is everyone saying you can't withdraw from a 401k?

quit the job, request a cash withdrawal, pay 10% penalty. it's that fucking easy.

if you don't know where your money is or how to access it, you're fucking stupid and shouldn't have money.

>>17400041
Yup. You can also borrow money interest-free if need be

The whole system is a joke

>>17396349
>>can't takeout until nearly dead at 60
how is it even protected against inflation?

They're not a scam. Not as good as a pension obviously, but they're still good

>>17396349
everything is a scam. life is a scam.

>>17396547
Im coooomin

>>17399299
68% of people will vote for fair and equal redistribution of your 401 gains ;)

>>17400887

This. You are always on the losing end of every transaction.

>>17396349
Total scam. A couple years back I needed some short term funds for moving and resettling. I was looking at around $5-6k, an amount that I would be able to repay quickly but would rather not put on a credit card for obvious reasons. I had $500k across three 401k plans. Not a single one allowed taking out loans against the balances. Try to take a disbursement and Uncle Sam rapes your butthole. Very clearly that is not my money that they're holding. I hope they put it to good use.

Being a wagie is a scam, the whole economy is a scam

>Is a 457 as good as a 401k?
>If my employer has me paying into a pension fund should I bother with a 457 too?
t. investment brainlet

>>17402159
> Make a contract that stipulates that you can withdraw money at certain point
> Believe the contract to be a scam when you can't withdraw the money before that

>>17402277
>contract
>contract
Like I said, it's a scam. Thank you for outlining precisely why.

The real scam is the 401k providers that shitty companies force on their wagies. These assholes are taking a 0.5-1% "management fee" every year -- that's ON TOP OF the funds' fees -- for doing absolutely fucking NOTHING and I can't move my assets into my IRA provider until I lose this job, and even then I'm sure there will be a "fuck you" fee for rolling over. The fund selection is unreasonably shitty too, but at least there was a S&P500 index fund or I never would have put a cent in even with the match.