You can’t pick up a newspaper today without hearing bad 401(k) news:
- Companies have cut their 401(k) matches, lessening incentives for employees to make contributions.
- 401(k) fees are confusing and exorbitant.
- Employer-sponsored plans are filled with nothing but dog investments packaged for layman investors.
With the glory days of the conventional 401(k) coming to an end, it’s no wonder that many investors have ditched or are considering ditching the 401(k) altogether.
But I ask, is the end of the 401(k) – as we know it – a bad thing?
I’m sure people like Suze Orman would say you have to keep pouring money into your 401(k) if you ever want to retire.
But the truth is that there are a variety of ways to build wealth that don’t keep us dangerously dependent on untrustworthy Wall Street execs.
For example, what’s so bad about using your 401(k) savings to invest in real estate? The self-directed IRA and Solo 401(k) let you do this, yet most employer-sponsored plans keep us handcuffed to investing only in securities.
If more investors looked into investing outside of Wall Street and realized that real investing doesn’t solely involve stocks, they would see that there is a world of investment opportunities awaiting them.
So I say, let companies cut their 401(k) matching incentives because this only enables more investors to see the conventional 401(k) for what it really is – nothing more than a way to make our Wall Street “friends” richer – not us.
