Is Your 401K A Scam?

Welcome back to another Thinking on Thursday topic. As I continue my research on topics related to retiring and elder years, this one came up a lot, and of course, is one I and lots of others can relate to. A scam is probably not completely accurate, but many people do not truly understand their 401K and actually end up losing a lot of their earnings long before they retire.

Most places don’t even offer a 401K option to their employees, and if they do you probably have to work full time to participate. I really am not sure I understand why because my research shows all of the burdens is on the investor, that’s you, not the company offering it to their employee. So, right off the bat, I call BS. At the end of last year, I pulled out of having any more money taken from my check and put into my 401k. Why?

For several reasons.

  1. I did not see any stability in the company I was working for and figured the would be rolling over the business to another healthcare managing company in a couple of years, just like the many previous ones before them. Rolling over a 401k is a pain, and I can’t cash it in without huge penalties, and I wasn’t vested so it didn’t even matter. Most companies don’t have you vested until at least 5 years working for that company. The new job I am starting at next week is 6 years to be vested.
  2. I have about 10 years to retirement, and while they can put my money into less risky portfolios, not all of them are set up that way. I really do not know enough about investing to take any kind of high risk with my money.
  3. The fees these companies charge are ridiculous.

If you don’t know about these things and your 401K I suggest that you learn about them. I urge you to watch the video below and if you do have a 401K start looking into what amount of fees you are paying, where your money is actually invested in, etc.

Index funds may be a much safer place to invest your hard-earned money. They have way less risk and are easy to manage so the fees are nominal at best. Read more about index funds here, and there is a short video that he ranked as the top 5, after the longer video. I do not know that they will make you rich, his title is his title.

I am not an investing coach or money coach. I am a health coach, and retirement issues are a huge part of health.

Disclaimer

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