The 401K Lie

or not, or yes

This content is for informational purposes only; this isn’t legal, tax, or financial advice. This isn’t advice or an invitation to buy or sell any securities or investment product. Duh.

I say this a little tongue-in-cheek, sorta true, sorta not, but kinda true. I guess it depends on your pre-programming and how you view life and money, which is as varied a subject as one can come upon these days. The 401 (k) is as much a part of American life as apple pie, methinks.

Even for those unbaptized into anything financial, when you get your first job out of that party time they call college, for most people, clicking a few boxes on a form mentioning a 401 (k) and a company match is par for the course. Sadly, that is the last time many folk even think about it, besides in passing, until a few decades have slipped by and it’s far too late.

Still, even with the 401 being a true miracle worker for retirement for most of society, a panacea to the live now, think later masses, the older I get, the less I like mine.

• How can this be?

How can one love such a wonderful financial vehicle of investment and retirement, a true balm of Gilad, yet come to bear such ill will towards it, sneering in vain at its locked-away riches, as far as the other dark side of the moon? I will tell you.

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The American Dream - feat 401k.

There is nothing more classically corporate cubicle-vibe than a bunch of angry, old, bitter lifelong workers standing around a water cooler, discussing 401 (k) strategies and dreaming of leaving the rat race after 30 or 40 years. Depressing.

Don’t get me wrong, I think humans are wired to work; sitting on a beach staring at your toes for decades probably isn’t what you were made to do.

But, work can mean a lot of different things. It’s work to travel, do yard or garden work, raise children, volunteer, backpack, explore the outdoors, etc. By work I mean do something meaningful that is also hard at certain times.

You might disagree with me; that’s fine, but the 401K has been both the best thing for the average person and the worst thing … all at the same time. Why?

It’s hard to feel bad for folk who’ve worked for the last few decades and arrive at that magic retirement age with nothing to show for it. The 401K has provided an amazing investing vehicle to ensure anyone can be ready for “what comes next.” Get the added benefit of a Roth 401K, and there is pretty much zero excuse to end up broke and eating asparagus out of a ditch before kicking the bucket.

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Getting locked into that mindset.

Before you put all your eggs into that one 401K basket, you should ask yourself a few pointed questions. At the very least, just sit back in a chair with a hot cup of coffee, stare at the ceiling, and ask yourself what you want out of your life and where you see yourself in 10 years. Have you even thought about it?

• Maybe it’s the millennial in me, that desire to fight against the system that’s been sold to us since childhood.

The same old wars, same old company store, same old job with mediocore pay that gives you a few weeks of vacation a year, they toss you a few bones to chew on, medical coverage, 401k, pizza parties.

All you have to do is trade your entire life, your time on this spinning rock, in exchange for that 401K match.

Have you ever wondered if it’s worth the trade? Do you want to wait till you're basically 60+ years old to enjoy your life, family, friends, and freedom?

Like most things in life, the 401 (k) can be too much of a good thing. What it is at its core, what it provides us, is exactly what we need. It’s good to have it. But it can lull us into a mindset and a sense of complacency that will steal our best years from us. Blind you to the simple fact that there are other possibilities and ways to approach saving money, retirement, and what that second half of life could look like.

For example, I highly recommend checking out Kevin of Unmapped; his unique perspective on life, work, and money can give you an alternative approach to retirement and investing.

• One that flips the script of working in a cubicle for 30 years, only to end up unhappy with your best years behind you … I’m sure you’ll be happy fawning over your 401K when you're 60 years old, like Gollum and his precious.

Is the 401K a lie? What do you think?

Have we all been hoodwinked into just slogging away from decade to decade, looking forward to the weekends and dreading those Mondays? All because you’ve been told, or heard, that the only way to “make it” is to buy a bigger house, car, and wait until that 401K balance reaches epic proportions, at which time you can grab your walker or cane and hobble out the door into eternity.

You should, by all means, put gobs of money in your 401K, take all the match you can get, ya know, the same old thing. But you should also ask yourself: is the way I’m investing my money best suited to meet my long-term needs and the vision I have for myself in the future?

I’m not here to tell you exactly what to do.

I just want to jog and shake you out of the 401K slumber you probably find yourself in after way too many years giving daily standup reports and attending yet another mandatory team-building exercise.

You should work; it’s good for you. But what kinda of work do you want to do? Where do you want to do it? How? Are there alternative investment strategies with different focuses that could at least give you more options over the next 10 years?

Or will you wake up in the exact same spot?