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I don't have the references on my finger tips, but basically I recall 401ks to be a bad deal for most employees because of mismanagement by the account holder,

I don't have the references on my finger tips, but basically I recall 401ks to be a bad deal for most employees because of mismanagement by the account holder, high fees, ill timed trades, etc. A few 401k (or 403b) holders have done very well, however, if their plans offered low-cost index funds, contributed regularly and avoided moving money around at the wrong time or at all.

SoftTalker 2y ago
No doubt there is a history of shenanigans in 401ks, especially early on. But if you're dollar-cost averaging into low-cost index funds, you should avoid that.
pdonis 2y ago
> A few 401k (or 403b) holders have done very well, however, if their plans offered low-cost index funds I think it's more than "a few". For one thing, many 401k-equivalent funds that government employees can make contributions to are low cost index funds, and there are lots of government employees. For another thing, most 401ks offered by large corporations also offer low cost index funds, which many employees contribute to because they're usually the default that you get if you don't pick something else, and there are lots of employees of large corporations.
- julienchastang 2y ago
  Low-cost index funds don't protect you from ill timed trades. I remember reading during the 2008 financial crisis that many account holders basically bailed into much more conservatively allocated funds as they watched there net worth plummet and were not able to benefit when the markets rebounded. They bought high and sold low. Most people do not have the stomach to watch their retirement savings quickly evaporate, unfortunately.
  - pdonis 2y ago
    > Low-cost index funds don't protect you from ill timed trades. Nothing can protect you from ill timed trades. However, trades can only be ill timed if they are made. If you just pick an index fund with an appropriate time horizon for your planned retirement and then leave it alone, you don't have to worry about ill timed trades because you aren't making any trades at all.

SoftTalker 2y ago

No doubt there is a history of shenanigans in 401ks, especially early on. But if you're dollar-cost averaging into low-cost index funds, you should avoid that.

pdonis 2y ago

> A few 401k (or 403b) holders have done very well, however, if their plans offered low-cost index funds I think it's more than "a few". For one thing, many 401k-equivalent funds that government employees can make contributions to are low cost index funds, and there are lots of government employees. For another thing, most 401ks offered by large corporations also offer low cost index funds, which many employees contribute to because they're usually the default that you get if you don't pick something else, and there are lots of employees of large corporations.

julienchastang 2y ago
Low-cost index funds don't protect you from ill timed trades. I remember reading during the 2008 financial crisis that many account holders basically bailed into much more conservatively allocated funds as they watched there net worth plummet and were not able to benefit when the markets rebounded. They bought high and sold low. Most people do not have the stomach to watch their retirement savings quickly evaporate, unfortunately.
- pdonis 2y ago
  > Low-cost index funds don't protect you from ill timed trades. Nothing can protect you from ill timed trades. However, trades can only be ill timed if they are made. If you just pick an index fund with an appropriate time horizon for your planned retirement and then leave it alone, you don't have to worry about ill timed trades because you aren't making any trades at all.