The lies of the 401k: why it might not work for you and what to do instead

If you have made it so far you might be interested in investing and most likely trying to understand the 401k. Unlike most financial influencers like Sharan the Finance Guy, Vivian your bff and others I will not advice you to keep maxing out your 401k.

Let’s begin by trying to understand the 401k. On November 6, 1978 the Employee Pension plan was replaced by the 401k. The previous pension plans were fully funded by the employers, which was funded by the companies earnings. By replacing pension plans with 401(k), employers shifted shifting the burden of saving for retirement to employees.

Money is a sensitive topic and a commodity most of us would not mind having more of. If you have been working for a few years, you might be secretly yearing for the day when you don’t have to show up to your job anymore, when you can live on your own terms without worrying about finances. Rightly, many influencers right now are touting the 401k how you should be putting the money away reducing your current income tax and saving more by paying taxes in the years where you don’t have an income.

Before you follow this advice blindly, I want you give you some food for thought.

One: The 401k is a 45 year old concept and the world has changed a lot since then…