Guy who wrote book in favor of 401ks in the 90s - can't retire cuz his 401(k) is now in tatters

[JoePhilly]

29. This guy is a dope ... his 401k was not the problem.

I'm sorry ... I started my 401k in 1990. And its done just fine.

From what I see, what killed his 401k was the divorce, and the rather stupid mistake of cashing in 401k money because he bought a house that needed costly renovations.

Re-Read what he wrote ...

He lost HALF of his 401k in a divorce. That's not the 401k's fault. The other half didn't disappear, it went to his wife, so it still existed. He just didn't have it any more. His EX had it. And if you stay married, your spouse will be using that 401k money too. Or what, was he planning to kill her after he retired so he could have it all to himself. A 401k is an asset, and assets are divided in a divorce. That's just a fact.

And then, he made the foolish decision to buy a house that needed costly revisions, and to use his 401k to pay ... which means he decided to SPEND the money .. AND he paid taxes and fees for the early withdraw. But again, the 401k did not lose value ... He made a bad decision and SOLD IT.

The author glosses over the real issue. People make bad decisions. That's not the 401k's fault. In addition, the article does not discuss the role of company matches, or of the tax break you can take by funding a 401k. The article is correct that a healthcare crises or a lost job could cause one to use 401k money, but even then, that's not the 401k's fault. Personally, I'd like to see some change in the 401k program such that you could use it for Health issues or job loss. That would be a nice improvement.

Lastly, the article does not say anything about what most people would have done with the money if there was no 401k. Years ago, I had a friend recommend that I put money in a 401k. He said, social security could go away. He said, if a company goes under, you can lose your pension. A 401k is something you can control. You can pick the investments, and you can be as aggressive or conservative as you want.

I'm glad I did not blow that money on fancy cars or extravagant things. I've invested my 401k broadly. I tune it regularly.

Bottom line: The 401k wasn't the problem.