I really hate my 401(k) plan. It is like being robbed at gunpoint and told you have to keep paying the thief by the government because that is the only way you can plan for your future. 401(k) plans are designed to take money, not to make it. Your employer is not allowed to provide you with financial advice and, frankly, if they could give it they would probably suck at it anyway.
How much money should you contribute to a 401(k) plan? I feel like anything less than the maximum contribution will get me nothing but a lecture from the Dave Ramseys of the world. These guys make millions of dollars selling books and advice, so they don't have to worry about paying their bills. But if you donate 15% to your 401(k) that means you are earning 15% less than your paper salary.
Maybe I should not have bought a home and a couple of cars so my wife and I can get around. What was I thinking? We might not be able to pay the mortgage if I donate 15% of my income to the next financial meltdown but at least we'll be saving for the future.
I am not the only person who feels this way. There are others who hate the whole 401(k) concept. Maybe it sounded like a great idea in the Reagan years but it has turned out to be a big financial trap.
Trying to make sense of your company's 401(k) options is just the start of your woes. You can never execute the trades when you want to and if you have to borrow money for any reason you have to pay back the loan at a gruelling interest rate. Yeah, I'm paying the interest to myself except I'm really paying it to the 401(k) plan. I will never see that money again.
If you leave your company you have to figure out what to do with that 401(k). You can't take the money to live on unless you pay a penalty. Is that like kicking a man when he is down? "What, you lost your job? Too bad. Here is 90% of your money less taxes on the whole 100%. Sorry you lost 40% of your 'investment' in the last stock market adjustment."
Someone in Washington, D.C. thinks this is a good system. I don't blame him for being stupid. I blame the idiots who elected him to office. What were you thinking when you voted for these morons?
If you put your 401(k) into an IRA you're just asking for more trouble. Now you can no longer blame your employer for picking a bad plan, you have to blame yourself. And you still cannot get your money when you need it.
When I was looking for help with my 401(k) plan a couple years ago I found this article which says it's best to only contribute as much money as you can afford to live without. Funny, I thought that was what they said about the money you gamble with.
Go figure.
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