Crazy. Dow down -1000 at opening

[whatthehey]

39. Which is fine if you have a better deal. They are very hard to find however.

First some numbers: In 2012 89 million workers were covered by defined contribution plans out of an average employed number of around 142 million, so certainly a great majority (remember some of the rest still get defined benefit pensions).

93.5% of plans offered some matching, with the two most popular being 50% of 6% of pay or 100% of 6% of pay. I've worked at 6 companies. All have offered matching programs. But my anecdote matters no more than yours.

http://www.americanbenefitscouncil.org/documents2013/401k_stats.pdf

http://data.bls.gov/pdq/SurveyOutputServlet

Now can you do better? Possibly but not plausibly.


For one thing not taking advantage of a 401k/403b etc means you lose the pre-tax benefit. Most people pay higher tax rates in their earning years than in retirement, so avoiding taxes now and paying them later is a good deal. Can you overcome that by choosing better or lower cost funds? The choice of funds in 401ks is a mixed bag, but all I've seen offer either index funds or income funds, both of which are typically very low loads as all the fund manager needs to do is bung them into either SP500 or Russell2000 ready made allotments, or bonds and a few blue chip dividend stocks, no looking for hidden gems or breakout startups. Wise investors who don't want to start tracking cup and handle formations and arcane banding algorithms on their own would be well advised to go for this kind of fund anyway, so going away from 401ks means you lose pre-tax benefits and have to do more work yourself, and forgo the match most employers offer. If you are a trading genius can you make these gaps up? Well of course it's possible, but how likely is anyone that good at picking stocks to be working for a salary anyway?