Imagine being locked up in a dark cell, and you can't leave. You don't choose where you sleep, what you eat, or even what clothes you want to wear.
Sure you can get out, but not for decades? Who knows where you will be then, and all the opportunities you might have lost.
Welcome to 401k: Financial Prison.
Does this sound familiar? Every year millions of Americans blindly throw money into their 401k prison, and they don't even know what is going on behind those walls. Well here are 5 reasons why your 401k just might be your financial prison.
The Sentence: Your 401k has been sentenced. You cannot take it out until your are 59 1/2, unless you pay a severe penalty. All this time you are losing out on all the opportunity and wealth your money could be creating you outside these walls.
The Warden: Most people don't even understand where their 401k money is being invested. Many 401k's are poorly invested in stocks and mutual funds that are losing money. Instead of being in control of your money, someone chosen by your company is deciding what investments are best for you.
The Penalty: Sure you can pull your money out of your 401k, but it is going to cost you. There are severe penalties for taking your money out of your 401k, and many companies have hidden fees and policies that you aren't even aware of.
The Government: 401k's are under government control. We have a national debt and a spending craze that is only getting worse and worse. Where the government giveth, it taketh away. Your 401k is under risk of future government decisions and possible added fees.
The Taxman: You finally complete your life sentence. Now it's time to pay the tax. It's safe to say taxes are going to be higher when you retire. Couple that with inflation and your in for trouble. Many people are finding themselves with less money then they planned on. Their 401k retirement has left them short of their retirement dreams.
Your money is your money. You need to be in control. Understanding your 401k is a great step towards financial freedom. Contributing up to your match can be a great move, if you understand what you are getting into. However, understanding all your options will help you make the best choice when it comes to your short and long term investment goals.
There are other investment alternatives, some that may work much better for you.
Sure you can get out, but not for decades? Who knows where you will be then, and all the opportunities you might have lost.
Welcome to 401k: Financial Prison.
Does this sound familiar? Every year millions of Americans blindly throw money into their 401k prison, and they don't even know what is going on behind those walls. Well here are 5 reasons why your 401k just might be your financial prison.
The Sentence: Your 401k has been sentenced. You cannot take it out until your are 59 1/2, unless you pay a severe penalty. All this time you are losing out on all the opportunity and wealth your money could be creating you outside these walls.
The Warden: Most people don't even understand where their 401k money is being invested. Many 401k's are poorly invested in stocks and mutual funds that are losing money. Instead of being in control of your money, someone chosen by your company is deciding what investments are best for you.
The Penalty: Sure you can pull your money out of your 401k, but it is going to cost you. There are severe penalties for taking your money out of your 401k, and many companies have hidden fees and policies that you aren't even aware of.
The Government: 401k's are under government control. We have a national debt and a spending craze that is only getting worse and worse. Where the government giveth, it taketh away. Your 401k is under risk of future government decisions and possible added fees.
The Taxman: You finally complete your life sentence. Now it's time to pay the tax. It's safe to say taxes are going to be higher when you retire. Couple that with inflation and your in for trouble. Many people are finding themselves with less money then they planned on. Their 401k retirement has left them short of their retirement dreams.
Your money is your money. You need to be in control. Understanding your 401k is a great step towards financial freedom. Contributing up to your match can be a great move, if you understand what you are getting into. However, understanding all your options will help you make the best choice when it comes to your short and long term investment goals.
There are other investment alternatives, some that may work much better for you.
No comments:
Post a Comment