[jaxn]

Why is that nuts? A 401k is hardly a pension. Once the money is in it is your money. If you were to start putting 10% of your income into your 401k or IRA now, you would be able to live off it in 40+ years easy.

Yes, I think passive income is great. Most of my income is passive and I plan to keep growing that part of my life, but that doesn't mean it is a fool's errand to have a retirement account.

[joystickers]

10% is a considerable chunk. This is especially true for someone straight out of college who doesn't have a high income to begin with. You could argue that his/her expenses are lower than someone with a family, but the counter to that again is the income. Someone with a family isn't making a starting salary anymore.

Another problem I have with the 401k is that "most" people leave it in the hands of fund managers who we're told know what they're doing. I'm one of those that leaves it to a fund manager as well. The biggest argument for the 401k is that the market will perform X% by the time you retire based on historical data. This assumes that trend will continue and that you don't unexpectedly lose a chunk of it as many retirees did in 2008.

Another problem I have with the 401k is that it's incredibly illiquid. If you take money out before you retire you're strictly penalized.

I'm not saying don't invest in the 401k. I invest in it, but only enough to get my employer's full match. If someone is offering you free money, you take it. I'm suggesting that it's better to take control of your own finances and earn enough passive income to live on. The 401k money should be a bonus, not the salary.