• flossdaily@lemmy.world
    link
    fedilink
    arrow-up
    26
    arrow-down
    3
    ·
    1 year ago

    401k plans are a scam not because of what they are, but what they replaced.

    Companies used to offer pensions. These were retirement benefits that were handled by the company, and the company bore the risk of underperforming markets.

    For a number of reasons, pensions were much better for workers. Now, only some unionized workers get them.

    • grayman@lemmy.world
      link
      fedilink
      arrow-up
      1
      ·
      1 year ago

      There’s so much inflation these days that pensions are impossible unless the pension money is invested to keep up with inflation. So it’s the same thing at best out a worse option.

      • PeepinGoodArgs@reddthat.com
        link
        fedilink
        English
        arrow-up
        2
        ·
        1 year ago

        So it’s the same thing at best out a worse option.

        It’s not though. With a pension someone work that knowledge manages that investment. With a 401k, the employee is. Except most employees don’t have that kind of time or expertise. So, it’s “our fault” that we end up with a poorly managed retirement when… we could just do pensions.

    • MrFunnyMoustache@lemmy.ml
      link
      fedilink
      arrow-up
      2
      arrow-down
      1
      ·
      1 year ago

      I don’t know about you, but when I’m 70 and the company that pays my pension suddenly goes bankrupt, I don’t want to be caught with my pants down. I would rather not put all my eggs in one basket.

      • flossdaily@lemmy.world
        link
        fedilink
        arrow-up
        1
        ·
        1 year ago

        Like people don’t lose their saving in the market anyway? But when your 401k goes in the tank, your broker doesn’t have the legal obligation to fund your retirement.

        • walden@sub.wetshaving.social
          link
          fedilink
          arrow-up
          1
          ·
          1 year ago

          If that happens to your 401k, that’s your fault. As you get older you are supposed to shift things to be more conservative… You can even put your money in things that are guaranteed to not go down. There are target date funds that do this for you without you having to think about it (although I think target date funds are a little too conservative from the start).