This article discusses the pros and cons of saving in a 401(k) retirement plan. While there are advantages, such as easy contributions and potential employer matching, there are significant drawbacks including limited investment options and penalties for early access. Investors could end up with a mix of funds that doesn't align with their long-term goals, particularly since many 401(k) plans favor conservative investment portfolios. Therefore, individuals should carefully consider their options and the implications of relying solely on a 401(k) for retirement savings.
One major flaw of 401(k) plans is that they typically do not allow you to hold individual stocks in your portfolio, which may hinder meeting your long-term goals.
It's common to find broad market index funds in a 401(k), and while there's nothing wrong with saving in one for retirement, you're also not going to beat the market that way.
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