This is a collection of some miscellaneous thoughts that have been running through my brain regarding 401-ks.
+ It’s a mistake toÂ base our independent retirement programs on 401-ks. (Or 403-bs, for those of us who work for non-profitÂ organizations.)
+ A 401-k is NOT a savings plan, it is a speculation plan.Â Â
+ 401-ks structurally encourage risky behavior with your retirement funds.
+ 401-k investments are typically “morally neutral”, that is, they aren’t invested in funds that have had any kind of moral screening regarding their investments. I work for the Archdiocese of Oklahoma City, our 403-b retirement plan offers a variety of stock and bond mutual funds, plus 1 money market account, and that’s it. For all we know, money in those funds may be invested in making bombs and funding abortion drug research. No one can say “the Archdiocese of Oklahoma does not invest in abortion” because the retirement mutual funds of the Archdiocese are not morally screened.
+ The bait on the 401-k/403-b is that the money isn’t taxed now, it is taxed at retirement.Â “Presumably” one’s income tax rate will be less at retirement, but this is not a guarantee.Â And many people have 401-ks who are in the minimum tax brackets anyway. With the way things are going, the idea that tax rates will be lower 20 years in the future is speculative to the extreme.
+ 401-ks encourage people to save less, because they expect to make speculative gains.Â In reality, most people should save more.Â That would require most of us to “spend less”.
+ 401-ks are based on the idea that over time, the market always goes up.Â Folks neglect to point out that the history of humanity stretches hundreds of thousands of years into the past, and the US stock market has a very short history compared to that.Â Where — today — in an investment made in the stock market of ancient Rome?Â Â Noting increases over long periods of time says nothing about what happens to any individual person sucked up into the scam.Â A person could retire and the very next day lose everything in a stock market crash.Â
+ 401-ks starve local economies of real wealth, and shift that wealth to parasitical financial markets that produce no real wealth, no actual goods and services.
+ Employers often don’t listen to their employees when making decisions about retirement plans. The Archdiocese of Oklahoma City personnel people don’t even reply to my notes suggesting that employees be allowed to put their money in a simple bank account in a credit union.Â Their attitude is that they know better how to handle my money than I do.Â However, by their decision — not mine — my retirement money is invested inÂ post-dated checks, large uninsured deposits in large banks that may be on the verge of failure, and other similarly risky ventures.Â Â Â The financial adviceÂ that the ArchbishopÂ of Oklahoma is getting is as toxic as the psychological advice he received about a particular pedophilic priest’s being “cured” and thus eligible to return to ministry.Â Oops.
Going forward, we are going to need better programs than this.Â We are going to need community — real community — to make it into the future.Â Â We will have to build new structures to replace the ones collapsing around us, and the time to start that was yesterday.
American leaders of business, economics, academia, and religion are busy betraying ordinary people, abandoning the weak to the devouring wolves, and generally doing what aristocrats do — take care of themselves and those like them, at the expense of everybody else.
They are as clueless as the French aristocracy in 1789, or the Russian aristocracy in 1917.
We will all pay the price of their greed, and our willing participation in their bloodthirsty games of violence and gluttony.