There is the issue of risk. A 401k has no guaranteed payout. I read a Radio Shack page on FB. One of the guys on the board mentioned in passing, a few days ago, how his 401k went to zero when RS went bankrupt. Color Tile, a Tandy Corp spinoff, also had all the 401k money in it’s own securities, so people’s accounts were wiped out when Color Tile went BK. I have read how Enron employees were pressured to put all their 401k money into Enron securities, and were wiped out. Some years ago, Honda of America employees sued over how badly their 401k sukked: the fund “advisor” put all their money into funds run by the “advisor’s” company, which all featured high costs and poor performance.
Fundamentally, a 401k offers the employer a bucket of money, with no accountability that it be well managed, for the benefit of the Proles who paid in the money. A recipe for abuse.
Steve
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My defined benefit pension is the fixed income part of my 4% rule retirement plan.
It’s about 80% of my BASE salary when I was working, and still covers my normal living expenses.
I get a COLA every couple years, too, but it’s not quite keeping up with inflation.
I’ll start taking SS in a couple years, which will increase my income enough for some “excess” each month.
SS will be part of my fixed income.
I have taxable brokerage and ROTH IRA for the equities portion of the 4% retirement plan.
My coworkers were(are) post grad educated (many PhD) and had the same issues Darryl describes: didn’t check the box, got advice from vulture financial planners, high fee MFs n ETFs etc.
It’s a lack of financial education, not “blue collar” or “white collar”.
I’ve NEVER worked anywhere that offered financial education.
When I talk to my former coworkers, they often tell me they are afraid to retire on their 403b.
ralph
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True. And a vulture financial class exploiting them all.
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