this is part of why retiring from the stock market is a scam
It’s a great racket to make sure people’s retirement is tied to something that rich people’s wealth relies on, so people will not vote to make rich people less rich because it hurts their retirement.
401(k)s were always a wealth extraction vehicle for the wealthy, they just want a bigger cut now. A pension was an earned and guaranteed benefit. A 401(k) is a gamble for bootraps fetishists.
This is all about having a bigger pool of marks to be left holding the bag when the AI bubble pops. I think capital knows by now that regular retail investors aren’t going to buy the hype enough to buy them out right before the burst, so they need to force them to do so to make sure they keep their money. It’s the same bullshit that had SpaceX trying to get listed on the index funds, only bigger.
TL;DR - They want to allow riskier and more expensive investments into 401(k) accounts.
Many 401(k) options can be pretty crappy as it is now, and as boring as it can be, we need to ensure we understand what we’re signing up for if we don’t expect to be screwed, just as in any other financial situation. Learn the basics of investment saving, set up your own brokerage account, and do a regular sweep of your funds into your personal low fee account as frequently as your employer plan lets you.
Yes, it sucks that they are attempting to remove guardrails, but this shouldn’t be anything new for anyone with a retirement account. If you don’t understand what you are investing in, you’ve already likely failed yourself. Everyone should at minimum be able to understand the terms of your 401(k) policy, know what different asset classes are, and know what expense ratios are. Getting informed keeps us safe. Trusting an employer or financial product salesman is not the way to go.
For anyone wanting to start on basics, from simple to more involved:
Seconding Bogleheads’ general advice. I’ve recomended The Investment Answer, which gives broadly the same advice.
From looking at the 5 points in the summary, it sounds like similar advice. It’s been all I needed to do realistically well for myself, and once you set things up, if you’ve been honest with yourself in your risk levels, you set it and forget it for a couple decades, since so many sites let you automate everything.
It really doesn’t need to be hard, I think a lot of people think it’s going to be and just flat out don’t want to learn, even when I try to ELI5 to them. I’m honest with them and will show them my balance and holdings to show I’m not blowing smoke, but I don’t know if anyone but my wife and ex have ever listened, and even then I think it was just so they didn’t need to listen to it anymore. 🙄
They don’t want us to retire, they want to literally work us to death. Cheaply as possible I might add.
That’s why they want the change. If you lose the money in your 401(k), it is not gone. It’s just that someone else has it. If you retire in poverty, someone else has an additional Ferrari.
That’s an over-simplification of the mechanics of wealth transfer, but yes, wealth transfer is their goal here, and they know what they’re doing, so it will work if they get their way, which they may given how captured our government is by the Epstein class.
Crypto and Private equity need bag holders with deep pockets and little oversight of their money to keep the pyramid scheme going. Targeting 401ks and passive investors will fill that need… for now.
