401K basics

[imoldernu]

This is not my bailiwick, and probably simplistic for most members, but there are some statistics that might be interesting for those who dealing with 401K's as part of their retirement plan.
From The Motley Fool:
Are 401(k) Plans a Failed Experiment?

excerpt:

Reality check
You should probably sit down for this part.

Only about half of American workers have access to a 401(k) plan, and only about 30% of American workers actually take advantage of that plan.
According to the UC Berkeley Center for Labor Research and Education, about 75% of 401(k) account holders have balances below the frequently cited average of $60,000.
The median account balance is less than $20,000.
More than a third of U.S. households end up at retirement with only Social Security.

 

[NW-Bound]

There were two recent threads that revolved around the same idea that 401(k) plans did not work. You might have missed the threads, but I think most posters got all tuckered out discussing this. I am too.

http://www.early-retirement.org/forums/f28/retirement-benefit-of-less-than-80-a-month-63326.html
http://www.early-retirement.org/forums/f28/losing-more-than-70-in-a-401-k-plan-63363.html

 

[growing_older]

For people who do use them (probably most everyone on this board) they work really well and I'm very glad to have them. My 401k is the cornerstone and largest contributor to my being (maybe) able to FIRE. But it is surprising how many people decline to take advantage. Something about leading horses to water. Most of the people in my company are contributing only up the the match, and before the match, many were contributing zero.

40ik's are great, but surprisingly people often don't choose to take advantage of them.

 

[WestLake]

I have contributed the max most of the time, but I don't think a 401K is enough. You have to do taxable accounts, pay things off, buy rentals and do Roths if able.

 

[Finance Dave]

For people who do use them (probably most everyone on this board) they work really well and I'm very glad to have them. My 401k is the cornerstone and largest contributor to my being (maybe) able to FIRE. But it is surprising how many people decline to take advantage. Something about leading horses to water. Most of the people in my company are contributing only up the the match, and before the match, many were contributing zero.

40ik's are great, but surprisingly people often don't choose to take advantage of them.

+1...just wish we had the Roth option as well for all these years.