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5 Reasons Why Your 401K Could Be Killing Your Chances of a Dream Retirement

By Glenn and Amber Schworm, Authors of The Birth of the Everyday Real Estate Investor 

Ah yes, the 401k! A well-defined institution throughout America, providing retirement & investment resources for countless Americans across the nation… 

It’s a problem. 

Your 401k could be KILLING your chance at a dream retirement. Here’s why: 

#1 ONE SIZE FITS ALL? 

Banks and businesses have worked hard to make 401ks a “one-size-fits-all” program for investing and putting money toward your retirement. For some, the idea of an easy path to retirement, allowing others agency of their money, is enticing. 

The issue here is that these hedge funds are dealing with so many people that their investment strategy is extraordinarily conservative, only yielding very small returns over time. 

#2 RISK WITHOUT AGENCY 

Most people forget that even with a 401k your money is still at risk. It’s still an investment, and investments come inherently with risk. Wouldn’t you rather have agency over your money?  

By being more specific about how you invest, and in what, you can not only have more control of your finances, but also increase the possibility of achieving substantial gains, instead of modest returns based on the approach of the hedge fund manager. 

#3 WHEN THE NEST EGG CRACKS 

I’m not sure if you feel the same way, but when I dream of retirement, it doesn’t include careful rationing of funds to make sure I can get through the end of the week. 

With a 401k, when your finances run out, they’re gone. For some, it’s less of a problem than for others, but if we’re talking about your dream retirement here? I’m sure I’m not alone in hoping that my dream retirement doesn’t include buying PB&J and Noodles in a Cup to make sure that I can afford my yearly summer vacation. 

#4 HOW SWEET THE SOUND 

I bet your employer gave you a whole presentation. They probably put together a packet of information regarding your 401k when it was offered explaining in beautiful and fancy words exactly how your money would grow and blossom. Maybe they presented ideas such as “matching funds”, “professional management”, “tax deferrals”, and more. 

The words really do sound great; I’ll give them that! The problem is that these things are largely out of your control, and if and how much money you receive from some of these sources depends on countless outside factors. 

#5 OTHER OPTIONS DO EXIST 

The 401K might be the retirement option that our employers constantly wave in front of our faces, but that doesn’t mean it’s the only way. 

Feeling like a 401k is the only way to your dream retirement is the biggest issue of them all. American lifespans are increasing with advancements in technology, which means we need to have a sizeable amount of money put aside to make sure we’re living our best possible lives after we retire. 

For myself and many others, real estate has been the answer. Intelligently putting my money into property has allowed for a substantially larger return on investment than I ever could have expected through a 401k. 

To learn what you need to take a step away from your copy-paste 401k options, and put the agency back into your own hands, check out The Birth of the Everyday Real Estate Investor. 

About the Author 

 

We started our career in real estate investing out of sheer desperation. We were in $80K of credit card debt and needed to make large chunks of cash to get out from under it. In 2007 we flipped our first house and made $17,000. On our second flip, we profited $33,000 in 33 days. That’s when we knew we were on to something. We always wanted to help people, so when we proved the model, we set to do just that by offering and teaching our successful formula. We wanted to show other people how to change their lives as we changed ours through Real Estate Investing. We’ve now flipped over 1000 houses and counting. We didn’t have a formal education in real estate investing, but our knowledge comes from hands-on real-life experience, the school of hard knocks, and a strong desire for a better life for ourselves and our family.  We just knew there had to be more to life than a 9-5 job.  We set fear aside and pursued our goals.  We are so glad we pushed through the doubt, and fear, because it’s given us a life we are grateful for and proud of.