401ks are for suckers

Must admit I was one who thought this article was utterly ridiculous when it first came out. And now....who knew this piece would be so prescient?!?

She's right, but the government didn't "botch" Social Security. It's a Ponzi scheme, and has always been one. There is no "trust fund" -- that's a deliberate lie. It's not an insurance policy -- it's a tax. Check your leave and earnings statement -- it says Social Security Tax. Read about the 1960 case, Flemming v. Nestor. In its brief, the government had to admit that everything they told the American people when they foisted this socialist scam on them was bullshit.

whoops...espousing, not espowsing. sheesh!

http://kitco.com/charts/popup/au1825nyb.html

all you folks espowsing 401(k)'s and the like...fair enough, if you want to be like every monkey out there working for a living. i'd much rather control my own destiny. i lived a life much like ms. halpern describes in my 20's as well. got serious in my thirties and retired at 37. not making great dough, but getting by, for now. in a couple of years i will be awash in cash, all because i chose to cash in my government sponsored retirement fund and live life to the fullest. dance, monkey dance!

"Social Security is broken" = "Wall Street would surely like to get ahold of that money and game it."

You are trash, I want you badly.

401K plans require the participant to make informed choices about investments and are subject to market forces. 401K plans are not perfect, but they are better than nothing and it looks like that is what you are going to have when you are old: nothing. It is time to smarten up. If you make your deductions PRE-TAX, you lower your tax bill NOW and get more money NOW as well as save. Put your money in government funds or foreign bonds until things get better.

If you are making less than a million a year and think you will be able to retire on a 401k, you're a fool.

more power to you! you're obviously a complete idiot and the sooner you run out of money and destroy yourself, the better for ALL of us!

A 401k is NOT A PENSION.....it's like gambling....with regulations.

Wow, what a typical brain dead "modern" female. How's that snorting coke thing working out for you, you horrid piece of vapidity. Let me guess, you probably also subscribe to feminist ideology with no clue how it was invented and financed by the elites to destroy the family and culture. Please do us all a favor and kill yourself. Us spiritually healthy people are sick and tired of your "Sex and The City" mentality.

Many 401Ks offer self-directed brokerage options, where you can transfer lump sums into a brokerage account created under the umbrella of your 401k. This is how I was able to get gold, silver, copper and platinum miners, alternative energy indexes, Uranium, Euros, Aussie dollars, emerging market bonds, and I am shorting the S&P, small caps, mid caps and real estate all from my retirement account. When the author of this article retires I'll be the one hopping across the globe like a VIP.

I think she's absolutely right; and this from a 58 year old conservative. Any systems put in place by the US government, the banks or any financial services groups should not be trusted. There is ample proof that none of these plans were designed to help the average wage earner.

"Social Security is broken" = finance speak for "Your company played with and lost your pension money"

She can snort all the coke off my ass anytime.

This time of mentality is giving the younger generations a bad rap. But the truth is, the younger generations & old have the same mentality. Over 50% of those eligible in this country to participate in a 401K do not, match or no match. But it is also the general mentality to delay the thought or let some one else worry about it. My company will put together a plan, or let the government reform Social Security and health care and they can take care of me. Or I will inherit money from mommy and daddy (who are living longer and odds are they will not get nearly as much as they thought). It is a damn discrace that people cannot take responsbility for their own lives. Too many people spend to much money to have fun (oftened confused with happiness). Fun is a short term feeling. Typically replaced the next morning with a headache or bloated feeling from too much food or alcohol. Happiness is long term contentment. Figure out the difference and it can make a huge impact on your life. Stop trying to keep up with the Joneses and start acting like a grown up.

Wow, I'm in sheer awe of how incredibly dumb this article is... I'm the first to admit that 401k plans need massive reform. They should work like IRAs, where the investment choices are dictated by you, not the company. However, unless the options in the 401k are incredibly expensive (and unfortunately some are), it is still worthwhile for most people to contribute. Grow a brain and do your due diligence! Look at the expenses in the plan. It's not that hard. Nobody's forcing you to blindly hand over money to the "government". That's what social security is for.

Re: the same government that botched Social Security...It was never meant to be a long-term solution, and we shouldn't be depending on the government for anything, anyway. My employer will match me (100%) up to 6.5%, and it's 100% vested after 7 years. Granted, I don't intend to leave this job, I live in a low cost of living area, and don't make that much, but I see it this way. I'm losing about $50 post-tax , and gaining $125 pre tax savings. (Every other week.) It's free money. If I have to withdraw, I'll still be ahead.

Re: the same government that botched Social Security...It was never meant to be a long-term solution, and we shouldn't be depending on the government for anything, anyway. My employer will match me (100%) up to 6.5%, and it's 100% vested after 7 years. Granted, I don't intend to leave this job, I live in a low cost of living area, and don't make that much, but I see it this way. I'm losing about $50 post-tax , and gaining $125 pre tax savings. (Every other week.) It's free money. If I have to withdraw, I'll still be ahead.

oh my lord. this is the worst bit of selfish 'let's stick my head in the sand' bit of looking at money i've seen.

Anyone that makes financial decisions based on an article they read in TONY deserves to be poor. The author can make comments like these after mommy and daddy paid for her NYU schooling and help out on her $3,000 a month rent.

Goodness, you're a very stupid girl. Among many laughably idiotic points you make: "Employer contributions are discretionary (i.e., in times of “business hardship,” they may be nixed—though TONY financial adviser Wayne Banks tells me this has never happened); and while you’re 100 percent vested in your contributions from the get-go, the company’s match follows a timetable: stay only one year, and get 25 percent, and so on. In creative fields with high turnover (like ours), that level of commitment is, well, scary." So if you don't participate you get ZERO employer match; and if you do and stay a year you get 25% of that match. But you think it's a bad deal somehow? How did you get hired? It couldn't have been your amazing analytical skills. Good luck with your eating out "addiction."

You can come and crash on my couch when you're a strung-out octogenarian.

What's that thing on the woman's shoulders? It looks like a head and likely smells like a head but it sure doesn't sound like one. This may be the absolute worst advice I've ever seen in print. Sweetie, stick with the food section before you actually hurt someone.

Wow. I really hate these "I'm so hipper than thou" articles. Mostly because they're usually a load of nonsense. You're such a rebel for not putting anything away for later *eye roll*. I do so hate the "gimme" generation we're stuck with lately. And it's not age-group specific. I know older women who're still living in the fantasy world of Live Now Because Thinking About Tomorrow Is Boring and Uncool.

As someone who's managing to both live life to the fullest *and* save for the future, I'd have to say you, like most of the idiots I went to college with, are pig-ignorant of the realities of life and what living really is. It's not the superficial pleasures of "gorging yourself" and "snorting hard drugs off the backs of go-go boys." It's actually have real relationships, knowing that you're able to do what you want, for a long time, instead of sacrificing the future for some fun today. Of course, I've got a lot less to prove to the world than you evidently do

More power to her!!!! Besides people doing hard drugs off the backside of strippers probably aren't gonna make it to 65 anyway.

By opting out of a 401K, the author seems to believe that her money will actually double. She’ll be able to freely spend her money on food and drink while still somehow being able to easily access that money in an emergency. Actually, it’s through her 401k that she has an opportunity to double her money. By investing 3% of her income, her paycheck is barely affected and yet she doubles her savings through the company match. But this fact (and many others) elude this author. I didn’t get any enjoyment and learned nothing while reading the illogical and inane justifications. I’d rather watch children gorge themselves on candy. The result is pretty much the same – a sad mess. Instead, why not share the experiences of someone who made these same mistakes but learned something from them? Or of an intelligent 20-something who makes smart & reasoned choices (I know for a fact there are plenty out there). Instead, we get this muddled, poorly-written, and pointless piece of drivel.

I was pretty irresponsible with my money when I was 26. I did contribute to a 401k but I spent way too much money on shopping & entertainment. So, I can relate to the author's choices. The difference is that I knew I was being irresponsible & making bad choices. What's appalling about the article is the real lack of self-awareness and objectivity. That's a bit scary. The author jokes about being 65 and eating cat food but that's a reality for many people. Perhaps the author expects to be rescued from her situation - a financially-viable knight will sweep in and save her from her excesses. Or perhaps she has family that will provide. Otherwise - unless she wakes up & gets smart (as I did) she'll be living the life she mocks.

Halpern makes a few good points, such as that never-going-to-be-vested matching funds are often used as a carrot and that there are several conflicts of interest, but saving absolutely nothing for retirement is just stupid. The key here is BALANCE. If Halpern wants more freedom and control over her money, then there are thousands of places where she could get an IRA, select her own investments and steer her own ship. I started my first IRA last year. I was twenty-six.

It's this sort of idea that makes me glad Social Security won't be around when my generation (I'm 27) gets to retirement. I'd hate to be providing basic necessities for someone who willfully and consciously blew all savings opportunity to be "gorging myself on expensive cheese in Paris and snorting hard drugs off the backs of go-go boys in Berlin."

Wow. Maybe find some middle ground...that might help you in the long run.

This is one of the most poorly written articles I have ever read. You obviously know nothing about finances, so instead of writing articles about them, maybe do a little research next time. It is articles like this, and people like the author, that give our generation such a bad rap. I'm happy to say I save 20% of my salary, and don't feel like I am missing out on "living" at all.

LOL, sounds like a 26 year-old. I can barely remember - but my 401k had about $1,000,000 when I retired - and that was before company 'matching' was invented - so my opinion of the 401k system is actualized, not estimated. And I like them. "a minor addiction to eating out" Maybe you should do an article on this. I've noticed that most young savers are trying to do something to control 'eating out' - it must be near sport status for the young. Fifty years ago we 'ate out' when we were hungary and away from home, it wasn't a form of entertainment. When did eating in a restaurant become such fun?

Wow. What a sucker---that's pretty sad. Because no one who has saved for retirement has ever really lived...it's impossible to do both. I really can't think of what to say except "What an idiot" and "Maybe this is poorly executed satire."

Wow, this girl's an idiot. Putting 3% of her gross pay into a 401k would be virtually unnoticed in the net pay, but with company matching it would accumulate to real money for retirement. What a waste. And it's irresponsible. With or without social security she's going to need money for retirement. Never mind that 401k money can often be used for big purchases like a home or education. I'm all for enjoying life, but grow-up.

As the author of The Smartest Investment Book You'll Ever Read and the The Smartest 401(k) Book You'll Ever Read (to be published in June, 2008), I read your article with special interest. 401(k) plans are plagued by excessive costs and dominated with hyperactively managed funds. The primary beneficiaries of these plans are employers, the mutual fund industry and the plan advisors, many of whom receive kickbacks (called "revenue sharing payments") from mutual funds who want to be included in the plan choices. While it may, or may not, be in your best interest to participate in your 401(k) plan, I can assure you that your skepticism is both warranted and admirable. Dan Solin