Reply to Not maxing out 401k, even though high income

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[quote=Anonymous]It just hit me today, why are people so excited about 401k if it is taxed as ordinary income? If you are a low wage earner and/or file as HH, you hardly pay any taxes anyway.
Capital gains in regular investment account are 0% up to $63k as HH for 2024.
With 401k, all I see are fees, rules, ordinary income versus long term capital gains tax, early withdrawal penalty, RMD, lousy investment choices, hidden fees, fund fees, bad customer service.
'Contribution follow a schedule'? You can't stop them if market is hot and about the crash? What is good about this account for low wage earners or anyone?
Didn't want to start a new thread, but what gives. Any tax professionals here?
401k does keep people from learning to invest on their own. I'd still be working if I had let someone else do it for me and trust them.
BIL has 4 accounts somewhere according to him. All he knows is that he was shown a graph how much he should have at 67 and it sounded good. Sil borrowed form her 401k to pay rent for one month, and now has fees, penalties or taxes if she can't pay back. 
Seems like a horribly account to me. It's like the employer, government, and the servicers are working together to screw workers.[/quote]

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