Home › Forums › Financial Markets/Economics › Why American is failing to prepare for their retirement? › ninaprincess wrote: If there
[quote=ninaprincess]
If there is a young person here my advice is to max out on 401K and spread out your investments.[/quote]
This is bad advice IMO.
As mentioned, Wall Street will harvest a lot of money off of your 401k.
I’d guess 99% of employees who auto “invests” in 401k’s don’t have a clue what fees are being charged to your account.
For most it’s a way to dollar cost average, a really poor investment strategy.
It’s also hard to be nimble with a 401k. When the inevitable market shocks manifest you’ll probably lose a lot of value – think 2008.
Also, it’s very likely that 401k’s will be taxed at a much higher rate than they are today (think Jerry Brown).
I could see maybe contributing up to your company’s matching in a roth 401k and that’s it.
Why not take that extra money and buy whole life insurance (more flexible), or pay down your mortgage?
Also, the income whole like insurance can be tax free.
