There is a dirty secret about 401(k)s. As pensions, they are a mess. Companies love them because they vastly reduced company pension contributions while increasing the amount workers had to pay in. Workers were lured into them because 401(k)s allowed withdrawals.
But pensions should not be treated as savings accounts; one recent survey said the average 401(k) yields 40% less on retirement because of withdrawals.
Very few people know what their 401(k)s are invested in. And practically no one knows anything about the performance of the funds they hold. This is because that information is buried in the prospectuses, and finding out about the funds requires further research that few know how to do.
Why is this? Because that’s the way Wall Street wants it. So the Labor Department performed a public service when it warned workers against investing their 401(k)s in cryptocurrencies. But no good deed goes unpunished. A lawsuit was immediately filed to stop the “government” from taking away people’s “right” to make their own investment choices. Never mind that Wall Street had already taken away that “right.” And never mind that Bitcoin has dropped from $65,000 per coin to $19,000, costing investors trillions.
Tommy Tuberville, R-Ala., introduced legislation to stop the Labor Department from issuing such warnings in the future. Your newspaper featured an article with the headline “Crypto warning creates divide.” There is no such “divide” because hardly anyone knows this is going on. I am dismayed that your newspaper should assist in perpetuating this fraud.
Robert Supansic
McKeesport