401k - Why The Drama

Are 401ks the best thing ever or a scam?

Its been a fun few weeks. 401ks suddenly have gotten into the spotlight again, after a flurry of tweets calling them useless. There has been a lot of shade thrown at them…

• They won’t make you rich

• They are a scam

• They weren’t made for retirement

On the other side, personal finance twitter loves them some 401ks.

• Tax-advantages

• retirement savings

• Long-term compounding

If you have felt a lot of strong emotions reading through the flurry of tweets, and are feeling more confused than ever on what to do…well first off realize that is the point of the various tweets.

Nuance and modesty doesn’t get engagement sadly. People love to either read a feel good tweet that supports what they are doing. And people love to rage tweet responses to something that calls their current plan stupid. 69% of twitter is just saying some exaggerated statement or going after a commonly used tool in order to get the most people to interact with you. Then in the comments backing off the controversy a lot.

Once you realize the purpose of the tweets, you can take a deep breath and think through things more clearly.

Let’s cover both sides and, since long-form content doesn’t need to be engagement bait, let’s come to a conclusion.