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401k's aren't stupid. They're a bit of a scam compared to a pension though. Whereas a pension would simply fund you until you die, you have to decide when you will die when you start drawing on your 401k funds. That's not an easy thing to figure out! I've noticed what a lot of old people do is accumulate a lot of debt with reverse mortgages and stuff like that and hope it evens out. Nice but it screws your kids. That's ok, they're greedy bitches anyway.
The good part of 401k is that they are tax deferred as well as company match. The company match is free money - plain and simple, thus if you don't put that much in you're simply throwing away free money. That's not smart. Even if you cash out, the company match more than pays for the fees so again, it's stupid to not do it. The tax deferred I used to think was a scam based on the thinking that future tax rates will be higher. Sure, that's likely to be true, but since you will be taking in far less income at that age (only your 401k) relatively you will be charged a much lower rate since now you would be charged at the high rate on top of the rest of your income. In addition you get to earn interest/market increases on the amount you would have been taxed now whereas the future tax charge is not going to compound like that. Even if we moved to a flat tax I still think it's advantageous.
401k's are scammy in that the management charges are too high. You have limited fund choices that are typically poor performers. Also in that you really need to manage your investments. If you don't gradually move into secure bonds as you age you can really get ****ed as many current old people have. But the market has more than doubled since it originally crashed so those people who crashed from say $4mil to $1mil in their 401k are at least back to $2mil now, assuming they didn't freak out when the market crashed and move everything to bonds. I don't really want to think about it too much so I used something fidelity offers which based on your anticipated retirement date gradually moves your investments to safer choices. Right now I am in all kinds of scary investments but that will taper as I get older. I'm probably getting raped on the fees. I don't understand it enough to know for sure.
Above and beyond your company match the best long term personal investment you can make is to invest into an S&P 500 index fund. Little to no fees, and nothing beats the market. Nothing. 12% on average thus far. I put a couple grand into the S&P 500 a couple years back. As it happened I somehow managed to buy at the LOWEST level during the whole crash. I still don't understand how I pulled that off.
Oh yeah, and buy a house. Buy the cheapest house you can tolerate and pay it off as fast as possible.
But the cardinal rule of stock investments for someone who isn't a day trader is, don't invest money you can't afford to lose and don't invest money you need at a certain time. You have to be able to resist selling at a market low like all the other idiots do. You literally need to never NEED the money, or else you might be forced to sell at a time that isn't good for you.
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