Rich Wood
Contributor
I know the gov't and financial advisers push everyone into 401-k's, and IRA's with the opportunity to have deferred taxes, or opportunities in the public equity market, but is it truly the best long term investment?? I really don't think so, even with a match.
The reason I ask, is for a couple reasons.
1st - This type of investment strategy seems to be like filling up a balloon slowly that you then drain at a much later time in life (supposed retirement of 59 1/2). This just sounds terrible, that I have to wait this long to use the proceeds of my money to live off of without being penalized. Kinda like a soft social security plan. I would prefer to invest in something now, that pays interest or dividends immediately, that I can use to offset my income.
2nd - Returns in the market after financial organizations and brokers cuts are dismal at best - maybe 3 to 4% which barely stacks up with inflation. I had a professional money manager for 5 years - provide me with 2% returns in a very high up-market where the S&P was making around 10% gains a year.
3rd - When you have a 401-k as an entrepreneur, you have to then open it up to all of your employees which also forces them into the same long term deferred gains path. Boring and not the best investment for them either possibly.
Is there anything better out there that is a deferred plan or tax free plan, which grows 10-12% per year, and let's you take out your dividends or interest on a quarterly basis (even requiring to pay taxes on gains).
It seems like the 401-k plan is the most financially repressive policy next to Social Security that the gov't imposes on people, in fact forcing them to work later in life (can't draw out till 59 1/2), not providing next generational wealth as the 401-k dissipates with use (balloon of money, that depletes with withdrawals), and in market collapses, pushes people to have to work even more years - effectively eliminating opportunities for younger workers.
The reason I ask, is for a couple reasons.
1st - This type of investment strategy seems to be like filling up a balloon slowly that you then drain at a much later time in life (supposed retirement of 59 1/2). This just sounds terrible, that I have to wait this long to use the proceeds of my money to live off of without being penalized. Kinda like a soft social security plan. I would prefer to invest in something now, that pays interest or dividends immediately, that I can use to offset my income.
2nd - Returns in the market after financial organizations and brokers cuts are dismal at best - maybe 3 to 4% which barely stacks up with inflation. I had a professional money manager for 5 years - provide me with 2% returns in a very high up-market where the S&P was making around 10% gains a year.
3rd - When you have a 401-k as an entrepreneur, you have to then open it up to all of your employees which also forces them into the same long term deferred gains path. Boring and not the best investment for them either possibly.
Is there anything better out there that is a deferred plan or tax free plan, which grows 10-12% per year, and let's you take out your dividends or interest on a quarterly basis (even requiring to pay taxes on gains).
It seems like the 401-k plan is the most financially repressive policy next to Social Security that the gov't imposes on people, in fact forcing them to work later in life (can't draw out till 59 1/2), not providing next generational wealth as the 401-k dissipates with use (balloon of money, that depletes with withdrawals), and in market collapses, pushes people to have to work even more years - effectively eliminating opportunities for younger workers.
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