401s are they just a big scam? Is it a new reitrement thing that hasn't stood the test of time?

[Anonymous]

Not a scam, just a tax deferred way to save a portion of what you need for retirement. I have about $750k in my 401k, my DH has an equivalent amount, but I would never presume that is enough for retirement. We have a lot of other savings, they just aren't as tax effective as the 401k.

I guess we are technically invested in real estate as our primary home, in which we have a lot of equity and will have paid off in about 10 years, is more than we will need in retirement. But I am not counting on that because I am not sure we'd really downsize. Our second home is theoretically also an investment but again not sure we would sell it. I've owned rental properties in the past but was not smart enough to make money on that so would not get back in that game.

[Anonymous]

Anonymous wrote:It is not a scam, but it was not intended at its inception to be a "retirement" per se - just a tax-deferred savings account - and part of a "three-legged" retirement plan that includes (1) a retirement pension or "defined benefit" plan that nobody gets anymore unless you work for the government or a union, (2) social security, and (3) your 401k, IRA, thrift, Keough, and/or SEP savings accounts.

99% of people will not be able to live off their social security and 401ks unless, at the very least, they have no mortgage. My advice is to seek employment that provides some sort of pension - at least 1 spouse. One can work for the federal government for only 6 years and get a retirement I believe.

That being said, the best advice is to put THE MAX into your 401k.

Good luck!

so in general 401k + social security was never intended to fund retirement? I thought that people were pushing 401ks rather than pensions. Pensions are going away because it is impossible to guarantee an infinite amount of money. I guess I am going to work until i am 75 like my dad, no probem for me cause I am in IT.

It seems that the only people really making money off of 401ks are the companies administering them. They should only make money if there are profits, never understood compensating them when you lose money.

[Anonymous]

401k's are self directed. You can choose to put very little in, or the max. You generally choose where you want it invested. My 401k provider sends regular updates on what the balance is, what the returns are, and how much income that will generate upon retirement. The outcomes shouldn't be that surprising to anyone.

[Anonymous]

Anonymous wrote:Not a scam, just a tax deferred way to save a portion of what you need for retirement. I have about $750k in my 401k, my DH has an equivalent amount, but I would never presume that is enough for retirement. We have a lot of other savings, they just aren't as tax effective as the 401k.

I guess we are technically invested in real estate as our primary home, in which we have a lot of equity and will have paid off in about 10 years, is more than we will need in retirement. But I am not counting on that because I am not sure we'd really downsize. Our second home is theoretically also an investment but again not sure we would sell it. I've owned rental properties in the past but was not smart enough to make money on that so would not get back in that game.

You have a total of 1.5 million in 401Ks, and you're not sure it's enough? Please tell me you're over 50. You just made me feel very, very insecure and poor. I have nothing near that.

[Anonymous]

Anonymous wrote:OP here, Scam in the sense that you will be able to retire off of them. I mean we've had 2 horrible drops in value resulting in a basic flat line of ROI for the last 12 years.

How in the world does that make the investment VEHICLE a scam? You're not thinking very clearly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not a scam, just a tax deferred way to save a portion of what you need for retirement. I have about $750k in my 401k, my DH has an equivalent amount, but I would never presume that is enough for retirement. We have a lot of other savings, they just aren't as tax effective as the 401k.

I guess we are technically invested in real estate as our primary home, in which we have a lot of equity and will have paid off in about 10 years, is more than we will need in retirement. But I am not counting on that because I am not sure we'd really downsize. Our second home is theoretically also an investment but again not sure we would sell it. I've owned rental properties in the past but was not smart enough to make money on that so would not get back in that game.

You have a total of 1.5 million in 401Ks, and you're not sure it's enough? Please tell me you're over 50. You just made me feel very, very insecure and poor. I have nothing near that.

How much do you think you'll need saved, as a multiple of your income, in order to retire? We need $4 million, because we've paid off our mortgage, and can live on about $150,000 in today's dollars.

[Anonymous]

Look at investment real estate as you said. Excellent way to supplement your retirement income. Look in the DC metro area as close in as you can afford, buy SFH's and don't expect them to fully pay for themselves right away. Don't buy anything that is more than a 1 hr drive from your house! I have been buying and holding RE for the past 20+ years. We also fully fund IRA's and TSP which would give us an acceptable retirement income but selling the RE is where the real money will come from.