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Comment by enraged_camel | Hacker News Reader

>>> The moral of the story is that governments and businesses should just abolish all pension, superannuation, 401K plans, etc... and let people manage their own retirement.

That is definitely not the moral of the story.

Aside from that, what exactly do you think a 401k is, if not a vehicle for people to manage their own retirement? The only government involvement in a 401k is non-involvement in the form of allowing you to contribute pre-tax money. And the broker won't be involved either if you're smart and elect to invest in indexes, rather than mutual funds (which can have high fees).

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I'm with you on 401k. I think the parent was more about pension plans where they are tied to an employer and the employee does not have much say in their retirement. A 401k can be rolled into an individual retirement account, allowing an individual to manage their own retirement money and allows portability between jobs. Pensions are often 'all or nothing'.

Workers do not have control over the fund choices they have in their 401k. Often, low cost index funds aren’t available. This can be fixed by working with HR and the 401k manager but it’s often an uphill battle and isn’t guaranteed to work.

Despite all that I agree that GP’s comment to abolish 401ks is throwing the baby out with the bath water.

Im certainly living in a bubble, but I've always had the option through my 401k provider to adjust my allocations among a very broad range of options.

You probably work for a sane private corporation.

From what I hear, lots of employers get royally screwed. Namely school districts and other small-gov employers. There is something about public schools that just love buying into high-fee 403b.

In every country there is intentionally a lot of friction if you want to manage your own retirement fund. Often you need to have a minimum amount and you are limited in the kinds of investments that you can make.

Not in the US. You can open an IRA as long as you have earned income. It's essentially the same as a regular brokerage account.

The real issue is the contribution limit is $5500 a year.

> Workers do not have control over the fund choices they have in their 401k.

The easiest way to fix this particular problem would be to make the contribution limit for retirement accounts a combined limit for both IRAs and 401k accounts, and to mandate that in-service rollovers be available free of charge.

>Workers do not have control over the fund choices they have in their 401k.

Cant they just transfer the balace to a 401k of their choice with better options?

401k is stupid (as stupid as employer based health insurance). It should just be an IRA contribution. It’s insane that your employer can choose things like health insurance and retirement saving for you. They should have no business in this.

That's because 401k's dont have employee or independent trustees

Right? I have no idea what OPs talking about with 401Ks. I have all kinds of options in mine.

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