Why the traditional 401(k) is a horrible idea

Now please note this is my bias opinion after working with businesses and seeing how traditional 401k’s are structured and where the money goes along with the accumulated growth (or lack thereof) occurs. So take this as you see fit.

Let’s dive into the many reasons here.

1. You can’t be liquid and obtain your funds whenever you want.

2. You are stuck with stocks, bonds and mutual funds which are dying as the dollar tanks and you have no control over where your funds are invested or placed.

3. You are not able to deploy funds into high-yielding investments like cryptocurrency or real estate or even gold or precious metals or businesses.

4. You’re not able to invest some of it into long-term stable growth and highly protected Cash Value Whole Life Insurance policies.

5. You are paying hefty annual fees of 1%-4% or more to folks on wall street managing the portfolio they sold to your employer in which you have no say where the funds go. This could be hundreds of thousands of dollars they are taking away from you.

6. When you withdrawl your funds during retirement, you will be taxed as ordinary income making it subject to both state and federal taxes at time of retirement.

7. Today is the highest federal tax rate is only 37% but that has floated as high as 94% (1944). There were also 3 different decades (1950’s, 1960’s and the 1970’s) where the federal tax rate never dipped below 70%. Are you kidding me 70%.

8. Lets not even forget about inflation which is out of the world at the moment as the folks in the whitehouse continue to print money wrecklessly, you wont be able to withstand the 2%-4% annual inflation rate which could be far higher after 2021’s “Covid19 stimulus funding parade”.

9. Lets not forget how 2007 most people LOST 50% of their 401k overnight. Do you want to risk that without any cash flow or additional benefits?

10. Let’sgovernment not forget about the employer match. Did you realize that most employers who don’t have to match a 401(k) who sets limits by the way and most likely get a legal kickback from the fund manager would pay you several dollars higher per hour or per salary? Yes, this is very true, nothing is for free folks this is how they get ya.

11. Federal goverment pulling back on bond buying. This along with the massive deflation in the US dollar has pushed massive investors to start hedging and investing in bigger things like cryptocurrencies that are over $1TRILLION in market cap and growing strong. This has a massive impact on precious stocks, bonds, and mutual funds which will cause them to implode again. The government can only print so much money and keep the bubble alive.

I guess the main question is do you want to lose 50% or even up to 100% of your life savings or do you want to pull it out and put it into things that bring you a much much higher rate of return than a whopping 7.5% if you are lucky? If so then I highly encourage you to click the button below and get a complimentary assessment with us.

Dont’ Just Take My Word For it….Hear What Others Have To say.


Now don’t take my word for it. You can also listen to financial experts like Grant Cardone or James Altucher, who share my same exact perspective in regards to 401(k)’s being a big scam. Grant Cardone said “The 401(k) is merely where you kiss your money away for 40 years in hopes of it growing.”

James Altucher stated that “401(k)’s are complete scams. This is another trillion-dollar industry that has a lot of money at stake if people stop believing in the mythology bolted to the scam. There is even revenue-sharing employers and 401(k) plan managers.. Is this legal… You bet it is.

I could go on and on about why the 401(k) is horrible, but as many know most people don’t have a huge attention span. With th,at I recommend you watch the video or if you are a speed reader then slam this down.

The only advice I have for you is if you have a traditional 401k yes even with your employer, stop contributing more than just the match. Do not contribute more to it than they are matching. Take the free cash and go. The remaining amount of money you do get, you should invest into a Self Directed ROTH IRA and Traditional Self Directed IRA so that you can grow those with investments you know such as investing them into Real Estate, Businesses, Crypto, Precious Metals ect.

Traditional 401ks are broken and were never meant to be a one all be all retirement plan, it was created as a forced savings plan for employees and provide tax benefits to the employer. Check out some of our other articles and VLOGS to see what other options you have available to you.