Finance and Economics > The Money Board

401(k)s will be considered unthinkable 50 years from now

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Smurf Hunter:
https://www.vox.com/2019/3/27/18174385/retirement-savings-401-k

Is this socialist drivel, or an accurate indicator of trends?

Mr. Bill:

--- Quote from: Smurf Hunter on April 03, 2019, 12:00:37 PM ---Is this socialist drivel, or an accurate indicator of trends?

--- End quote ---

Both?

Buried amongst the socialist stuff is the unfortunate reality that lots of people are not prepping for when they can't work anymore -- or if they are, they're not knowledgeable enough to direct their investments.

At some point, these people will need public assistance, and I forecast it will be funded by a tax on 401(k) and Roth IRA assets.

FreeLancer:
It’s a lot like healthcare.  Individuals more frequently prefer the immediate rewards over planning for future rainy days. And in a society that demands people not be abandoned to die in the gutter, the consequences of individual decisions (or bad luck) become the responsibility of the rest of us.

David in MN:
I spent a decade studying finance. I like the 401 and IRA because savvy people like me can optimize savings vs. mortgage. But it's unfair that a "freer" system that allows a couple of engineers to optimize their money after one spent so long studying finance. Some people just can't do what I do. I understand why a "guaranteed" government retirement sounds better than spending years reading and hours daily studying. I had the panic at 24 that the latter third of my life was controlled by investment. I get the terror that brings. I sympathize with those who don't fall into finance neck deep.

Smurf Hunter:

--- Quote from: David in MN on April 03, 2019, 02:39:27 PM ---I spent a decade studying finance. I like the 401 and IRA because savvy people like me can optimize savings vs. mortgage. But it's unfair that a "freer" system that allows a couple of engineers to optimize their money after one spent so long studying finance.

--- End quote ---

Maybe I'm an elitist privileged snot?  I feel that some people have failed as adults. This is on various levels, ranging from not starting fights in bars, to paying your car insurance.
Everyone has an excuse, and they convince themselves there is no other course of action available. I'm not going to pick on 20-somethings, I'm talking to people +/- 5 years of my own age.

I think the reality is that most people are not taking advantage of modern retirement vehicles. If only they listened to Dave Ramsey, they'd be far better off. No formal finance or math degrees needed.  10-15% of income saved annually into boring mutual funds is almost a full proof way to avoid dying in poverty.

This is yet another example of where we have to trade some freedom for the greater good.  Sure, I'm responsible enough to <insert topic of debate here>, but most people struggle. The socialists will say we can't make an exception for just the smart/competent/responsible people to do it, as that wouldn't be fair to those who are lazy/stupid/etc.

While we don't allow professional race car drivers a higher speed limit on public roads, I also predict it wouldn't lead to measurable increase in highway accidents either.

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