[koprulusector]

That’s what I ask all the 401k nerds. You could literally die next week. Sure seems like a great way to live; when you’re young and in your prime, live below your means to max out your 401k, which there’s a fair risk you won’t live to see or enjoy, or… just stop hoarding money and live your life (I’m not saying be financially ignorant or irresponsible).

17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall, don’t make it to age 65.[1] For reference, one must typically be age 59.5 before they can withdraw from their 401k without penalty.

So, if you save for 40 years, live below your means so you can maybe have a chance at enjoying all that money you’ve socked away. Pretty crazy to think that nearly a quarter of us won’t live to see or use the money beyond 5 or 6 years after retirement.

* [1] - https://www.ssa.gov/oact/STATS/table4c6.html

[theandrewbailey]

> www.ssa.gov

Interesting you cite Social Security, the mandatory pyramid scheme that every American pays into and many/most retirees rely on for income. If you die before you retire, you get nothing from Social Security. If you have a 401k and die before using all the money in it, your beneficiaries (the people who inherit your stuff when you die) keep it; nothing like that happens to your Social Security benefits.

[dragonwriter]

> If you die before you retire, you get nothing from Social Security. If you have a 401k and die before using all the money in it, your beneficiaries (the people who inherit your stuff when you die) keep it; nothing like that happens to your Social Security benefits.

Social security has both death and survivors benefits, actually.

[Dylan16807]

"Pay in $10k a year for 40 years, get paid $40k a year for 10 years" isn't a pyramid scheme.

You can go buy life annuities at your will, and they're pretty close in function and clearly not schemes.

[shadowgovt]

As someone who spends quite a bit of his time counting the sand in the hourglass that is one of his relatives' retirement funds...

There's no definite win-strategy here. It is possible to die young. It is possible to outlive your savings and live a miserable final years. We can't guarantee a happy solution.

(Well, TBF, we could decrease the misery of the one option by deeply funding social security, not to sustain it but to raise to a higher standard of living than previous generations ever knew because we currently live in a world with a higher productive capacity than previous generations ever knew. So I'm speaking of transient political reality and not concrete laws of the universe.)

[unmole]

> Well, TBF, we could decrease the misery of the one option by deeply funding social security,

Take from the young (poor) to pay the old (rich). Yeah, that sounds amazing, where do I sign up? /s

[shadowgovt]

Not necessarily. The source of funding for social security was an arbitrary decision. We could fund it with a wealth tax.

[Mordisquitos]

> 17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall, don’t make it to age 65.[1] For reference, one must typically be age 59.5 before they can withdraw from their 401k without penalty.

You are making the almost certainly mistaken assumption that the population of men who "live below [their] means to max out [their] 401k" are representative of the overall population of American men with regards to life expectancy.

[unmole]

> 17.27% of men don’t live to age 60, and another ~6%, or 23.57% of men overall

The demographics and actuarial numbers of people maxing out their 401k will look very different. The richest live ~15 years longer than the poorest.

[ndriscoll]

There are a few ways you can withdraw from your 401k early without penalty. The best is probably Roth conversion laddering, which requires that you plan your withdrawals 5 years ahead of time. If you have a spouse and children, then it also makes sense to consider what will help you best set them up for a good life; you might not get to benefit much from that savings, but maybe your children will be able to avoid starting their adulthood as debt/rent slaves.