Do you think 401K is a scam?

Think of it as a long term vault where the government and your employer help you stack cash.

100%, why I chose $401jk instead.

We lost over 100k during covid - so yes it’s a scam

If you leave tax-deferred money invested in your 401k for 5+ years you will likely have greater returns (as compared to a taxable brokerage) if you pull it out early, even when you consider the 10% tax penalty.

No. The “everyday working man/woman” should be deferring to their 401k. Atleast the match the company gives. Truth is most people aren’t good savers. 401k helps to counter that. Also, the movie isnt accurate. You can start taking money without penalty at age 59 1/2.

If the market crashes all your money is gone. Your just playing the stock market.

…

Yes, 401K is a little scammy, but nowhere near as bad a scam as Social Security is (if nothing else since 401Ks are voluntary and the management of the fund can't just take the money for whatever they want like the government does with SS).

Odd. She doesn’t have to ask. She’ll pay income tax on it, and an additional 10% penalty, basically flushing a lot of money down the toilet. Entirely her call. Not recommended, but it’s her call.

I don't know much about 401K

A 401(k) is essentially a special savings bucket that your employer sets up for you. It’s designed to help you save for retirement by making it automatic.

Cheers buddy

Yes it's really a scam

She had cancer, I guess.

@grok what is title plz

Not a scam. It’s just not going to work for her, as she’s dying well before retirement age. Hardship withdrawals are allowed under certain circumstances like hers, but she will still incur taxes on the money that hasn’t yet been taxed.

No it does exactly what we thought it would do

It is a scam. If you need the money for a roof you can't have it. When you retire they don't give it all at once. If you work really hard you will likely die before getting to enjoy the money.

No, but social security is

I don't think so

Oh boy, the comments here. The “lose half your money” refers to the tax rate on high income triggered by a full IRA withdrawal at once (federal, state, local), plus a 10% penalty if you’re under 59½. The penalty exists in exchange for very favorable tax treatment of retirement accounts and to discourage early withdrawals that harm retirement planning.

Everything in the United States is a scam. 🤣🤣🤣🤣🤣🤣

Not sure how "scam" applies here. I put money in, my employer matches some predetermined percentage and it's tax deferred until I take it out after 65. If I take it out before that age, there are penalties. All these things are up front so where's the "gotcha" moment?

It's never all your money. If you take it out early there's penalties and fees. But when you reach 72 you HAVE to take minimum distribution. Save your own money and eliminate other peeps control of it.

Yes

We'll see if it's a scam when, in 30 years when we need it, they don't jack up the tax rates. I'm not optimistic.

if you mean social security, yes thats a scam. least 401k you have your money. you don't get to opt out of SS Scam.

The 401(k) feature of an employer's pension plan allows employees to contribute their own money into a retirement plan and reduce their taxable wages by that amount. Employers also match a certain percentage. It is not a scam. Any withdrawals are taxable.

How is a retirement account a scam?

It's not a scam. Like everything there's some good and some bad. Employer match, pre-tax dollars, use it for a loan...it should be an allocation of your portfolio of investments.

It's not

If think it’s debatable

I don't think so

@grok movie name

When it takes any number of pennies just because id cash out early? Yes!

This is a good watch tho

To some extent yes