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The 401k Ripoff

Updated on May 8, 2013

Have you considered putting your hard earned dollars into the 401k plan possibly provided by your current employer? Do they tell you they will give you something like a fifty percent contribution? Does this sound too good to be true? Well, you know what, if it sounds too good to be true it probably is.

Now do not get me wrong. I by no means claim to be a financial expert. However, 401k plans just came into existence a few years back and the first time I heard about them I actually got really suspicious. I mean why is it that you cannot withdraw your money without a penalty? That makes no sense! What kind of legitimate investment is it if they penalize you for using your own money? What if you have enough to retire early? So now some bank and your wonderful employer are going to also control your retirement age? I just do not get it.

Now I personally do not see the benefit of storing your funds in a 401k. It sounds like a big headache and you cannot even have access to the money when you really need it. Why not just put it in an interest bearing bank account and get it over with? At least you can take out your money any time without penalty.

Lets be real, most of us probably are not going to make it too much past age sixty five anyhow. With all the stresses that we have in life I mean I will seriously consider myself to be lucky to make it to sixty five at all.

Now I wonder what these big corporations get out of making us sign up for their 401k plan. Maybe they get some kickback from the banks or the government. I mean your money is just sitting there and earning interest and they are using it to fund their operations. Do you really see any of it? Probably not. You see crumbs for the birds!

Now I am poor and I try to be as much in debt as possible. I see no point in limiting my spending and try to owe as much money on credit-card as my credit limit will allow. Why you may ask? Well, it is because my boss pays me so little that no matter how hard I try I will never have any savings nor will I ever be able to pay off everything I owe. This is the reason why I decided not to care anymore. You see once you are dead all the debt you have will be forgiven and those rich companies will have to pay for it anyhow. So good luck and good buy.


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    • dburkeaz profile image

      dburkeaz 5 years ago from Gilbert, AZ

      Not rich, not republican ... just a responsible American citizen!

    • kosanya profile image

      kosanya 5 years ago

      you guys sure sound like a bunch of rich Republicans!!

    • dburkeaz profile image

      dburkeaz 5 years ago from Gilbert, AZ

      OMG! So much incorrect information in this hubpage.

      Not only are you way off on the origins of the 401k and penalties for early withrawl (see previous comment) you are way off on this:

      "most of us probably are not going to make it too much past age sixty five"

      The average man in the USA lives 75 years and the average woman 80 years

      "...they are using it to fund their operations..."

      Actually all 401k funds are held in a third-party trust that only YOU can access. So the companies that make you sign up for the plan do NOT have access to the funds, in most cases the company will match some of your contributions so they are actually giving up some of their money as a gift to you.

      " boss pays me so little that no matter how hard I try I will never have any savings nor will I ever be able to pay off everything I owe..."

      It's not your bosses fault, it's your fault, you (and only you) are accountable for your career (and your life). If you want to get paid more, either find a better job or figure out how to get promoted in your current job, or improve your skills so you are more valuable to potential employers. Employment in our fine country is not an entitlement it is a privilege.

      "...once you are dead all the debt you have will be forgiven ..."

      When you pass away, the estate that you leave behind will be responsible for these debts. That means whatever stuff you are buying on credit will be sold to pay your debts.

      "...I see no point in limiting my spending and try to owe as much money on credit-card as my credit limit will allow..."

      With this attitude you will be poor the rest of your life, learn to live on less than you make and you will be much happier, you will start winning with your money and maybe you wont have to publish such malarkey.

      I fear that there are too many people in the country with this disturbing attitude.

    • kschang profile image

      kschang 5 years ago from San Francisco, CA, USA

      You could have done a little research before ranting about this alleged conspiracy...

      401(k) was created in 1978, apparently before you're born.

      The reason you're not supposed to access the money is because all the money you put in is TAX-FREE (i.e. untaxed). If you made 1000 pre-tax, and contributed 10%, 100 goes into your 401k, not 90 or 80 or whatever it was AFTER deduction for taxes. Due to this higher amount, it will compound a LOT more than a regular savings account, which you can only contribute using AFTER-TAX dollars.


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