[codenerdz]

The article is mostly scaremongering, but the reason I posted it was mostly the 401k comments.

Any "old timers" (meaning those that put money away into 401k through out at least 2 recent market crashes, dotcom and the financial one) here willing to comment as to how their 401k fared? The biggest advantage I see(especially working for the company that does the matching) is that

a) Its a saving account that you cant take money out on a whim

b) Employee matching is free money

c) Youre not paying taxes untill youre ready to take it out and when you do take it out, your tax liability will be lower due to lower income

So you have all these financial advantages in 401k, the disadvantage is that you have to invest these funds wisely.

[JunkDNA]

It all depends on what your investing your 401k in, but putting it in a stock index fund is a pretty good guard against inflation. Stocks will adjust accordingly to inflation, but putting the money in the bank certainly won't. Also, it is amusing to me that people freak out and stop investing when the market tanks. That's like only buying groceries when they aren't on sale! The best time to buy stocks is when they are down. If you invest consistently over boom and bust, you can insulate yourself pretty well against major swings. Of course, free advice from strangers on the Internet is worth what you pay.

[kqr2]

A big advantage for most people is that it is an automatic savings plan. Although you have more options investing on your own, many people would either spend it or forget to invest it.

[muzz]

d) It facilitates dollar-cost averaging, and lengthy time horizons

Yes, you have to invest wisely, but most plans have an S&P 500 index fund for growth and a Bond fund for income (your allocation mix should be more growth when younger, more income when older).

[rprasad]

Until late in 2012, I came out ahead far more by paying down my graduate student loan debt than I did by contributing to my 401(k). However, that is because my graduate student loans are statutorily fixed at 6.5% or higher, whereas market returns have been close to zero or negative.

[muzz]

Market returns have been volatile. S&P 500 for the past few years [1]:

2012 16.00% 2011 2.05% 2010 15.06% 2009 26.46% 2008 −37.00% 2007 5.49% 2006 15.79%

[1] http://en.wikipedia.org/wiki/S%26P_500#Total_annual_returns_...

[rprasad]

Yep, missing a word in my original comment... my net market returns were close to zero or negative until late 2012.