So the question is what's the big deal Josh? Don't we get a tax deduction for putting our money in these government sponsored plans? Isn't it best to lock away my money so I won't touch it (it's for the future right)? Besides I'll be in a lower tax bracket in the future (does anyone still believe in this fable)?
I often wonder if plans like the 401k have helped or hurt most of the public. What I see in practice many times is a nice 401k balance with a mountain of debt, or someone taking a stiff penalty to access their own money from their 401k to pay bills. Neither scenario is a good start to building or maintaining wealth.
Is the road to wealth built by relying on a system that is unproven and barely 30 years old (the first 401k plans were introduced in the late 1970's and early 1980's)? Or is the road to wealth built by being a responsible individual and taking back control of your own finances? Do you place your trust in far off places like Wall Street, or Washington D.C. to succeed in life? Or do you place trust in yourself?
What if you had full access to your savings at anytime? Since you had access to these funds it allowed you to reduce the costs on things you did in your everyday life like buying a car, a down payment on a house, or paying for a child's education. If you could reduce your costs in these areas wouldn't you by definition have more wealth?
If you would like to see how much wealth you could grow by reducing the costs in your everyday life please feel free to contact me:
Joshua SmithJ Smith Financial