My Wallet Wisdom Proved Once Again

Conventional Money Wisdom
Is not Always
Wise

Time Magazine featured the story "Why Its Time to Retire the 401(k)" by Stephen Gandel (October 19,2009). Written from the employee point of view, it details how doing what they tell you do financially isn't necessarily in your best interest. Mr. Gandel points out that 401(k) was originally set up 30 years ago as an executive perk - one more way to dodge Uncle Sam. Below are a few of his other revealing statements:

"The ugly truth, though, is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves."

"Even for people who don't have enough money to send their kids to college or buy a house, building their 401(k), they are told, is their first priority."

I have also known of people who would live in their car rather than touch their retirement funds. And I am wondering why anyone should be penalized for accessing their own money should they need it in an emergency.

The writer does go on to point out the positive side of the 401(k) plans. My point is not to bash 401(k) or other plans you may have, but rather for you to understand that what may be a great financial decision for others may not be in your best interest. The good news is that the public is finally questioning what they have accepted as the only truth. To me, that is very good news.