I'm way above average according to this article, but the idea of relying on 401(k)s for retirement has bothered me for a long time. klein - I believe you and I have discussed this, actually, in passing. I don't trust that 401(k)s basically rely on the market forever and always trending upwards thereby guaranteeing your initial investment will be reliably worth that much more over time. I do absolutely believe 401(k)s became popular because they are so less expensive to employers than pensions, and that possibly everyone has been sold on theories regarding market and investment as opposed to what will actually happen. I don't know. I have a 401(k) and I contribute what, apparently, is "far above average" - according to this article - so clearly I buy in on some level, but I guess when faced with "doing something that might be beneficial if/when I retire" vs. "not," well, it's no choice at al and I'm going to have to go with the first over nothing. I wish this article was longer and talked more about other potential flaws in 401(k)s besides just the simple fact that people aren't putting (enough) money into them. I think there are more flaws than that.
So the market will forever and always trend upward. If markets weren't inherently positive-sum, no one would participate in markets. The theory in market participation is sound, it's the practice that's whack. Because it's a complicated financial system that employees are sheep-dipped into with no prep whatsoever, it's very easy to lose a shit-ton of money because you don't know about the little gotchas. This is by design: the people who run the industry make their money on the gotchas. The idea that shit's gonna go down and oh holy fuck why put your trust in your retirement fund is facile. You've got two choices: hoard guns'n'gold under your mattress or trust in the system. Something that happened a surprising amount up here in WA foreclosure courts: Washington State gives the foreclosed the right to demand that the forecloser "produce the note." This means that for Bank of America to kick you out of your house, Bank of America has to find the paper mortgage with their name on it. Which should be easy, but when your mortgage has been sold eighteen times, tranched six, securitized eleven and dissolved in bankruptcy court, it's kinda tricky to lay hands on that fucker. So what would happen is a bank would take Joe Destitute to court, Joe Destitute would say "produce the note," the bank would fail, and the judge would say "Congratulations, Joe, you own the house free'n'clear." And if you're behind on your payments, what you got to lose? After all, the worst they can do is throw you out, which they're gonna do anyway. And that's what collapse looks like: if you're in it, you own it until someone with a bigger claim comes along. As fundamental collapse has never hit a modern nation outside of war, there will be large, highly-motivated organizations attempting to keep shit working. That's you, your retirement fund and your mortgage, cooking along through thick and thin, forever and ever amen. The primary flaw with a 401(k) is it may not be efficient. There may be better instruments for investment. From tax purposes they kind of rock hard.
Where "working" means "you're just desperate enough to play the game, but not so desperate pulling out the torches and pitchforks looks like a better option", which isn't quite the same asAs fundamental collapse has never hit a modern nation outside of war, there will be large, highly-motivated organizations attempting to keep shit working
That's you, your retirement fund and your mortgage, cooking along through thick and thin, forever and ever amen.
Practically speaking, it's the same. No, walk with me. We're all "just desperate enough to play the game." NONE of us feels as if the way things are right now is serving us the best, but it's serving us well enough that it's totally not worth the risk of tearing it all down. What was the quote? Democracy is the system where everyone loses equally? Nearlly all of us, were the sky to fall tomorrow, would defend that shit we intrinsically know to be our shit. We would fight for those things that we intrinsically know belong to us. We would further band together with those people we know, who are also fighting for their shit, against "those" who would take it from us. "Those" are the people that intrinsically know that the system has been cheating them, that band together with those people that are also working to right an injustice. To them, equalizers. To us, looters. And just like that, it's a civilization again. A shaky one, a rough one, but realistically speaking, you're taking up arms to defend your mortgage, not your house. You're fighting for the status quo. That's why the gears keep turning. Because while we all dream of better things, we don't want to hack our neighbors to death with a machete to get them. Neither do they. You need to start painting up things like nationalism and racism and ethnic cleansing and shit to get people to tear their neighbors apart in the name of justice and you'll see that shit coming. THAT is when you need to take a long hard look at what your mortgage is worth and whether you want to take the penalty on your IRA.
I think I might have been too terse. You've got it pretty good, but I bet you wouldn't be mixing reality tv if you didn't have obligations that require money. I've got it pretty good too, but I wouldn't piss on people who call other people "resources" if they were on fire if I didn't have a father nearing retirement with ridiculous medical bills and no savings because I used to have a mother with ridiculous medical bills. Like everyone says whenever anyone speculates about how things might be done better, "but who will be the garbage man?" "Keeping shit working" means when you have the Great Depression you get the New Deal, but it also means you roll it back when people get too comfortable, on pain of there be no one obliged to drive the garbage trucks.
Right there with you. Buy a space to live, somewhere to be in the event that your 401k collapses. Pay off the mortgage aggressively. Pray to god or hell that you have enough money for food, heat and property taxes until you die. Or ethereum works to I guess.