Is 401k still considered as a way of saving your money?

[Anonymous]

[Anonymous]

A better way is to collect real estate when the prices go back down.

The first house is yours to live in, the next one and the ones after that (single- or multi-family homes) are for rental income and appreciation, and you can borrow against the equity in the houses tax-free. You return will be enormous by the time you retire compared to what you can do in a 401k, and it will allow you to retire much sooner.

Study it as seriously as you would for an advanced degree. Bigger Pockets is a good place to start, they have something for everyone depending on how you want to go about it, and they have podcasts and forums with very experienced real estate investors. Also the book Rich Dad, Poor Dad is a good introduction. But the big thing is do not buy now at the top of the market, you will have an impossible time getting your money back and when the prices go down you will lose all that value.

If you don't want to own physical houses or other kinds of real estate, you can also invest in real estate investment trusts (REITs), which are bought and sold like stocks, but you're actually buying a piece of real estate, houses, apartments, commercial buildings, hospitals, retail stores, all sorts of things, and then trading on the value. This requires expertise also, Motley Fool is a good place to learn about this.

A third way that has a better return than a 401k is to start a business with the goal of selling it for a multiple of its value. It has to be a business that doesn't require your presence, otherwise, if you're not there you don't make any money, and a buyer isn't interested in buying you, just the business. If you buy a Subway, you're stuck working at Subway for the rest of your life. If you build a business you can sell, such as YouTube, which was bought by Google, you can make a fortune. That's an extreme example, but you don't have to go that big to be successful and make a lot of money. To learn about this, check out the Built to Sell podcast and also How I Built This on the NPR.

If you can save up $1 million in a 401k over 40 years, you can make $10 million or more, possibly way more, with one of these other options. And you can always put money into a 401k in addition to doing one of these, so you've covered all the bases.

[Anonymous]

Most people just lost large portions of their 401K because of Trump

[AviatorTom]

The company I worked for, before I retired, had an excellent 401K plan. They matched a percentage of whatever the employee put into the 401K. The default plan investments basically followed the overall stock market, though the employee had a few other choices as well.

401K can be an excellent way of saving money for retirement. Amounts put into a 401K, up to defined limits, are considered pre-tax, which lowers your income taxes. It is not a good way to save money for discretionary items, since withdrawals come with a tax penalty if taken before retirement age (59 1/2, I think), with some exceptions that loans against the 401K amounts can be taken without penalty for a home purchase or college.

[Orion84]

It depends on what you mean by "saving" money.

401(k) s are a form of saving for retirement, but since the money isn't liquid, I wouldn't consider it "saving" in the same way that a savings account or a CD would be.

Money that's in a 401(k) can't be accessed until you retire, without paying penalties on it, so it's not really money you can save until you need it. It is only for retirement.

[AI Opinion]

Yes, a 401(k) remains a valuable way to save for retirement. It offers tax advantages and, often, employer matching. These benefits can greatly enhance your savings over time. Contributions are usually pre-tax, which can reduce your taxable income. Additionally, investment growth within a 401(k) isn't taxed until withdrawal, allowing your money to potentially grow faster. It's wise to balance your 401(k) with other retirement savings strategies to suit your personal goals and financial needs.

[Ariesman81]

It is an almost guaranteed 100% ROI on your investment, just from the company match alone. Couple that with what the market returns on your portfolio. It is a no brainier to have a 401k if you plan on working for a company.

Are there other more profitable forms of investment... sure. Real Estate has proven to be extremely lucrative, but carries some high risk and needs lots of hands on involvement.

[Kaneki05]

Well yeah, but it's only going to help you when retiring. So if your wanting to save for money you can dip in and out before then no.

[slatyb]

If there is an employer match, make sure you contribute enough to maximize it.

[exitseven]

Yes, you can defer paying taxes until you retire.

[Anonymous]

Maybe in the US.

[jahaims]

Moronic question