The 401K system is the largest Ponzi scheme in the history of the world, only 2nd to the US housing bubble that was engineered to occur.
It is naive to believe that generation after generation can benefit from the stock market yet tens of millions of people are counting on it 100% because *GASP* the govt condones/approves/suggests it, and makes it foolishly attractive with ‘pre tax dollars’
The reason that defined benefit plans were done away with is because it wasn’t possible for professionals to manage money with solid returns decade after decade for many thousands of people, yet it is now ‘expected’ that amateurs will have a better return.
Just as real estate ‘professionals’ were cheerleaders for the housing bubble and many were sucked in by their ignorance,(because houses never go down) those whose incomes rely on the financial markets are cheerleaders for the 401K system and convinced of its success, blinded by their income.
As long as leverage and derivatives exist, it is likely that the scheme will go on in one fashion or another for a long time.
The wake up call will be when something REALLY big happens and *ONLY THEN* 99%+ of the people will say that nobody could have seen this coming AND ‘poor me, just like everybody else’ and EXPECT a govt bailout.
The govt will not have the resources to bail these people out and perhaps it will be game over at that time.
Good luck to those who are COUNTING on this system.[/quote]
HLS, I totally agree with this. I’m planning on shlepping by on 3 small pensions and collecting rent. I’m considering buying and fixing up rental houses with an “equity partner” in a couple of years and collecting rent on them. I’m working on my DRE “PM” designation as I write this.
I can’t imagine how the most vocal young “worker bees” on this forum are going to “retire” with $2-$3M and still keep their families’ lifestyles at the level they have been “accustomed to.”
I have recently come to the conclusion that rental income is the way to survive, IMHO. Unlike the stock market, this income stream is totally under one’s control. Admittedly a pragmatic “control freak,” I’m attracted to that. Those young Piggs on the current “retired cop under 60” thread who are prognosticating whether they will need $2M or $3M to retire are using the rarest and most “grandiose” examples of unclassified executives as the VAST majority of gubment retirees have monthly pensions between $350 and $1800. I believe in saving for retirement if one is able to but in my mind, it’s wacky to assume you will need $65K to $100K annual income in retirement. You’re supposed to have your principal residence paid off by then (or live in subsidized senior housing or a senior mobile home park if you do not have any assets).
