this post was submitted on 20 Jan 2024
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Asklemmy
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From the very moment you start working your first job, put 5 to 10% of every paycheck into a 401K and or IRA account. Start this as early as possible so that you might stand a chance of retiring one day. Do NOT depend on social security or anyone else to care for you when you are old. Sure wish my parents had engrained this idea into my head ....instead I'm starting late and will pay dearly for the missed years of contributions.
Why do you expect that the savings in a 401K will be worth something once you want to retire?
In Germany, about 20 years ago they pushed evwryone to additionally to the normal state funded retirement to have private insurance too (Riesterrente) over time all this money was stolen by shady insurance people who got super rich (Meschmeier or so his name) so that what is still left is not worth anything. But the state owned retirement is still working kind of OK.
(I'M NOT FROM THE uS, so I'm not sure if 401k is state owned or private)
401k (employer sponsored) and IRA (individual account) are managed by investment companies. They’re not a state operated asset. It seems unlikely that the government would move it away from these investment companies because they’re probably great a lobbying.
The law states that these retirement accounts should be completely untouched and recoverable if the company goes bankrupt.
Historically the market returns have been around 7% annually over the long long term but that fluctuates a lot and might not even be possible into the future but America is good at pumping those numbers up so idk.
Yes. “Put your money here, it will be there when you’re old—we promise.” Is a ridiculous plan.
You get to choose how your 401k is invested, though. The only difference is a tax advantage.
The advice is just: save money, let it grow using compound interest, use tax laws to your advantage.
There's no "trust the government" in that advice.
When I get too old, my plan is a bullet. Can’t spend that 401k when it will be stolen from me by the time I get there. Look at the world and the path it is on.