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by skybrian
178 days ago
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> Companies offered pensions. … Staying at one company for 20 years is now a career liability, not an asset. This was already old news during the dot com era. The question is whether 401k plans and job-hopping still works out in the end. To do that, though, you need to be able to switch jobs enough times, which isn’t easy when jobs are hard to find. |
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It can, but it is a fragile "still works out in the end." It fails when a damaging event occurs near the time you need the money, such as a late-in-life divorce, job loss, illness, or financial collapse of investment vehicles. Winning at the 401(k) game means enough people losing their money through unlucky investments, and you get a cut of their losses.
Thought experiment: imagine everyone had enough income that they could save 10% in a 401 (k). BLS numbers say 10% of us wages is 1.1 trillion. Can you imagine the impact on the stock market if it received $1.1 trillion every year for 30 years? Where would that money be invested?