But as an experienced successful Passive Income Expert & Serial Entrepreneur I'm used to that...
Here They Are... The Six Reasons Why 401(k)s Are a Scam…
Reason #1: The 401(k) Tax-Deferral Scam
In our immediate-gratification society, deferring your taxes by funding your 401(k) sounds so good, doesn’t it?
But when the tax man eventually comes calling, he won’t ask you to pay what your tax liability would have been if you’d been paying taxes all along. He’ll tell you what your tax liability is at the time your taxes are due.
Conventional wisdom says you’ll come out ahead by deferring taxes. After all, doesn’t that mean your entire contribution can go to work for you immediately? Unfortunately, like many assumptions about personal finance, this simply isn’t true. According to the Society of Actuaries, if tax rates remain the same…
“It doesn’t make any difference whether the taxes are taken away from you at the beginning (before you put the money in a savings vehicle) or at the end (tax-deferred). It’s the same fraction of your money that is left to you.”
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If tax rates are lower in the future, you’ll come out ahead. However, most people, including most financial experts, believe tax rates must head higher, not lower, over the long term.
And your retirement could last 20-30 years or more which is why learning how to create Multiple Passive Income Streams NOW is in YOUR best interest
The reality is that you are probably sitting on a tax time bomb. Simply put, the government is going to need more money in years to come for several reasons. For example, let’s look at the numbers impacting Social Security and Medicare.
Today there are 62 million Americans using Social Security and Medicare. By 2045, 140 million – twice as many – Baby Boomers and Gen X-ers will be over 65 and requiring Social Security and Medicare. Where do you think the money to pay for that will come from?
Social Security and Medicare’s financial condition has deteriorated despite a long economic expansion. In fact, Social Security is already in a negative cash flow situation. What will happen to those funds in the next downturn?
And what about the national debt? Washington has not dealt with the government’s unsustainable debt and spending for decades, and as of March 2020, the national debt has ballooned to over $23.4 trillion— which comes to $189,585 for each US taxpayer! And it’s climbing at a head-spinning rate. (For a painful wake-up call, check out USDebtClock.org)
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For all these reasons, the likelihood is that tax rates will go UP over the long term, and if they do, then OOPS! There goes the whole 401(k) “tax-deferral” argument which again is why learning how to create Multiple Passive Income Streams NOW is in YOUR best interest.
Reason #2: The 401(k) Employer Match “Free Money” Scam
Who doesn’t love getting “free money” in the form of the 401(k) employer match? Do you really believe your employer is giving you something for nothing? (If you believe that, I’ve got a Rolex watch I’ll sell you for $10.)
The Center for Retirement Research did a study based on tax data and found that for every dollar an employer contributes to your 401(k) match, they pay 90 cents less salary to men and 99 cents less to women on average. Translation: That means your employer is essentially pulling money out of your paycheck to contribute to your 401(k). And you’re really netting pennies, not dollars, in matching funds. Whoa! Doesn’t sound like such a good deal now, does it?
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That’s why one of the folks my Team & I Mentor had no trouble convincing his boss to pay him the money that he was getting as an employer match in salary instead, so he could use it to fund his Bank On Yourself Passive Income Program.
Plus, you don’t even get all of the employer match during the first 4-6 years you work for the company – you need to be “vested” first. If you leave your job before that, you typically don’t get the full match.
And according to the Bureau of Labor Statistics, the average time a person stays on the job is only 4.2 years. Which means you’ll lose some or all of your employer’s meager match money if you don’t stick around longer than the average worker.
So unless you sit around and wait to be “vested,” you may never even get that “not-really-free” match anyway.
Oops! There goes the employer match “carrot.”
So why not take the money you’re contributing to your 401(k) and put it in a safe and proven retirement plan alternative that gives you guaranteed growth, flexibility, control and numerous tax advantages?
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Reason #3: 401(k) Fees Devour Up to HALF of Your Hard-Earned Money
In spite of the rules passed a few years ago requiring better 401(k) fee disclosure, surveys show most participants still have NO clue how much they’re actually paying.
But according to Brightscope, participants in small plans pay between 1.5% and 2% in fees annually, and participants in the largest plans pay nearly 1% per year. If those fees sound like “small change” to you, then here’s a wake-up call: Fees of only 1% per year can slash the value of your savings by 28% over the next 35 years, according to a Department of Labor report, A Look at 401(k) Plan Fees.
Brightscope also noted,
We put together this chart that shows you clearly how much of your hard-earned dollars will be devoured by the typical fees in 401(k) plans:
Fees You Pay in your 401(k) Average 1%-2%, According to Brightscope
Is that a little or a lot? If you have $100,000 in your 401(k) earning 7% a year, over 35 years here’s how much you’ll lose to fees:
| No fee | 1% annual fee | 1.5% annual fee | 2% annual fee | |
|---|---|---|---|---|
| After-fee account value after 35 years | $1,067,658 | $759,776 | $640,133 | $538,876 |
| Total dollars lost to fees over 35 years | – | -$307,882 | -$427,525 | -$528,782 |
| Percent of account value lost to fees | 0.0% lost | 28.8% lost | 40% lost | 49.5% lost |
Poof! There goes one-third – or more – of your retirement savings. I can assure you somebody is getting rich on this, but it’s not you!
Reason #4: Funding a 401(k) is Like Putting Your Money in Prison
It’s like a trade with the devil: Give me all your savings in return for tax-deferral (a scam as we’ve seen) and an employer match (another scam), and I’ll keep it under lock and key for you until you’re 59.5 years old.
=> The Top 10 Reasons Why You Must Work for Yourself
You have to beg for permission to use your own money! There are all kinds of restrictions and penalties for accessing your own money.
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Yeah, I know – the idea is that they don’t want you to spend your retirement savings before you retire. But rarely a day goes by that we don’t hear from people who have a very legitimate need for cash, but they couldn’t get what they needed out of their 401(k).
Most of them then literally beg us to plug them into our simple systems to create Passive Income/Real Estate Investing using Business Models like this one => https://Bit.ly/BestBigMoneySideGig & this one=> https://Bit.ly/UseOurMoneyToBuyRealEstate which have been PROVEN to be 2 of the best ways to improve your financial situation REALLY QUICKLY!!!
Did you know that there’s a strategy that actually lets you use your retirement savings for whatever you want, and your money can continue growing as though you never touched it?
You can bet you won’t hear about this from your 401(k) provider, but you can get all the details when you download this free Special Report.
Reason #5: The Myth of Market Returns
Most of the money in 401(k)s is invested in mutual funds. You’re told that over the long term, you can do well in the stock market. But over the last 20 years, the average equity mutual fund investor has earned only 3.88% per year, beating inflation by only 1.7% per year, according to the 2019 DALBAR study. (And that does not take into account the Coronavirus COVID-19 pandemic-induced market crash of 2020.)
Yet Wall Street has brainwashed us into believing we must risk our money in order to get any kind of decent returns. And so we continue to blindly fund our 401(k)s like lemmings following each other off a cliff.
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My investigation into more than 450 different financial products and strategies revealed you don’t have to risk your money to get a decent return. You can reach your financial goals and dreams without taking any unnecessary risk. And you can have access to and control of your retirement savings.
NOTE: In fact starting a Home Based Business is THE Best Tax Avoidance, Lowering Strategy For ANYBODY as This Book=> 475 Tax Deductions for Home Based Businesses and Self-Employed Individuals: An A-to-Z Guide to Hundreds of Tax Write-Offs explains.
Our PROVEN SIMPLE Systems have been proven time & again to be safe wealth-building strategies that gives you an unbeatable combination of advantages that include guaranteed, predictable growth, liquidity, control, and many tax benefits, too.
You can request a FREE Report entitled The10 Reasons Why Passive Income Is So Important For You AND Your Family HERE to find out how you could benefit from a custom-tailored program.
NOTE: Although educating yourself is beneficial, it’s also important to understand that to make the best real estate investment decisions or building Passive Income Streams you likely will need an Advisor or Successful Mentor who can add value with their niche expertise and vast array of resources.
Reason #6: After Decades of Being Lab Rats in the Great 401(k) Experiment, Most Pre-Retirees Still Don’t Have Enough Saved
Labor economist and nationally recognized retirement security expert Professor Teresa Ghilarducci summed it up succinctly:
Even the “father” of the 401(k), Ted Benna, has called it an “out of control monster” that should be blown up. (And he says he now puts most of his own money into the high cash value, dividend-paying whole life policies AND Passive Income Businesses like this to guarantee he'll have an ever increasing Passive Income Stream .)
How much more evidence do we need that 401(k)s are not the solution they’re touted to be? The more accurate name for a 401(k) is a hope and pray plan.
So are there any good alternatives to the 401(k)? The answer is YES, but of course you won’t hear about it from Wall Street.
If you feel like you need an extra boost, be sure to grab your copy of my REPORT, The10 Reasons Why Passive Income Is So Important For You AND Your Family for FREE. It continues to highlight proven key tips, strategies and manifestation exercises to help you unlock your wealth and happiness.
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