Tuesday, August 25, 2015

Of Course 401(k)s Are Crap

Thanks to loopholes in ERISA, companies ditched their pensions and put these scams in their place.

They are being used to save companies money on pensions. Nothing more, nothing less. Defined contribution plans were originally set up for high-paid executives to augment pensions. They were NEVER designed to replace them. Loopholes in ERISA guaranteed companies would shaft their workers by forcing them to go without any kind of savings plan or in these worthless 401(k)s while the companies saved a tremendous amount of money in pension costs by ditching them altogether.

People peddling these scams either are stupid or they refuse to tell people how much money you would have to save to have anything even remotely comparable to a pension. Hint: It is literally in the hundreds of thousands of dollars to save enough to be equivalent to even a small pension. With the job market the way it is, few people work for one employer their entire career or make enough that they can save enough money for it to be comparable to a pension.

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