Reply to Anyone NOT maxing out your 401(k) even though you're making decent money?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]*raises hand* we're contributing but not maxing out. We have really sound personal finance habits but very little faith in the future of the economy. Signed, disallusioned millennial.[/quote]

I am curious where you put your money that you consider safer than a 401k, given your lack of faith in the future of the economy.  Gold bullion?  What investments do you think are immune to the collapse of the US economy?[/quote]

None are. That's the point. Stay out of debt, have an emergency fund, live within means, put some away for a rainy day. If there's something you want to buy or do that will enrich your life, so it now. Spend the money. There's no guarantee that you and/or your money will be there later. [/quote]

You're disillusioned enough to believe that the market (stocks or bonds) won't outperform your checking and savings accounts with their 0.1% interest rates? Or you're disillusioned enough to believe that the theory of compounding won't apply anymore?

I'm cringing just thinking about this -- and I'm an (older) millennial too.[/quote]

+1. Compounding isn't just going to go away -- it is a financial theory. So why does disillusionment matter? It IS possible that rates of return will be lower and you won't be able to roughly calculate a 6% return going forward and will have to more conservatively use 3-4%, and yet that IS still a return and a FAR BETTER return than what you get by just "putting something away for a rainy day" -- presumably in a 0.2% interest savings account. I really don't get what disillusionment has to do with this. If anything if we're looking at future returns in the 3-4% rates yearly rather than 6-7%, you need to be saving MORE to compensate for that, not less.[/quote]

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