[juunpp]

Well, read up on what existed before the 401k in the US, and how retirement works in Europe for comparison. You're betting on stonks going up and then switching to bonds and safer investments closer to retirement, hoping that the caprices of capitalism won't wipe your savings when you need them. Except: https://nypost.com/2022/06/09/401ks-drop-amid-market-turmoil...

[jeroenhd]

European pension funds do exactly the same, the money doesn't just disappear into a vault somewhere. This is good because the profits can help combat inflation over a lifetime of work. The height of the pensions is very much dependent on market factors.

I think a bigger advantage of this system is that the money isn't your responsibility. Many people lack the fiscal responsibility to manage stocks and bonds or will do the smart thing and save up for later when they receive their pay cheque. By shifting responsibility to the individual the most vulnerable of society are most at risk of financial mismanagement and poverty during retirement or even not being able to retire at all.

[shadowgovt]

If inflation is 10%, then most places you put your money won't hold value over time.

[eatsyourtacos]

So, in a period where the market is down like 30% and inflation is up 10%.. your argument is putting it in the market is the way to combat inflation?

I mean, I get what you mean.. but we have a -40% differential here to prove you utterly wrong at the moment.

[shadowgovt]

My argument is that keeping it in savings, uninvested, or even in a mason jar in the back yard will also show diminishing returns. It will, of course, shrink slower, but the path is downhill along most axes.

[bigyikes]

-40% over what time period? The current economy is not the norm.