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Of course, you can solve this problem by purchasing a low fee index fund and not touching it for 30 years, but few are savvy enough to do that.

So, call me one of the savvy ones then because that's exactly what I've done.

I have a 403(b), not a 401(k) (non-profit of course) but from the moment I started working full time I invested in it, maxing out the matching (which is $2 for $1 up to 5%/10% of my income, as in I put in $1 and they put in $2... total no-brainer there!) and 100% invested in an S&P 500 index fund. Started it in 2000, haven't touched it since. Low fees (Fidelity FUSEX in case anyone cares).

The only thing that shocked me was how many people told me "I can't afford to do that." IT IS FREE MONEY! How could someone NOT afford to do that?!? Hell, with the $2 for $1 matching even if you picked a lousy plan (and there are lousy options, like TIAA-CREF annuities in a 403(b), rather redundant risk aversion there which hampers returns of course) it's pretty much impossible to not come out ahead and if you start from day 1 you never miss the money because you never had it to begin with!

But... a lot of people don't do it. I don't get it.

Then again I found TMF before I started working full time, hence how I became savvy enough to realize it was a no-brainer. My boss is still working well past when he could have retired (and, wanted to) because he waited until they made him join the plan (which they do eventually, age 35 or something like that, I dunno, it didn't apply to me!) and thus missed out on YEARS of compounded growth and matching fees. I don't even want to think about how much money he left on the table, it could be over a million bucks by now!

So, my only question is how do we encourage more people to become savvy enough to realize these opportunities. I don't think fear-mongering about the stock market (as Dems are wont to do in my experience) or government programs that only encourage financial dependence upon the federal government (like Social Security) are good things in this regard, quite the opposite. All they're encouraging is ignorance on this subject, not education and savvy. Yet I keep getting called "mean" for pointing this out.

It's the same reason you don't feed wild animals man. They become dependent upon the handouts and forget how to feed themselves and eventually starve. We're just bigger, somewhat smarter animals (though sometimes I'm not so sure about the smarter part). The same motivations apply really. I can't in good conscience support the handouts even if they're given fancy names like "Social Security." Not when I compare that to my retirement (which costs me less than I'm paying for SS even BEFORE you count the portion my employer has to match but is all but certain to be worth FAR more when I retire decades hence... I just turned 38).

I don't see the compassion in turning people into government-dependent sheeple, basically... especially when EVERYONE is fully capable of doing no worse (and, likely far better) on their own with just a little bit of education on the subject. Hell, thanks to TMF I taught myself! A large contingent on these boards think I'm an idiot yet even this moron can do it! Miracles do happen!
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