Robert Kiyosaki, author of "Rich Dad, Poor Dad," criticizes 401(k) plans as a financial trap, arguing they come with high administrative fees, limited investment options, and unfavorable tax conditions on withdrawals. Unlike the commonly held belief that 401(k)s are essential for retirement security, Kiyosaki suggests they offer a false sense of safety, particularly regarding employer matching contributions, which he believes should be seen as expected compensation rather than a benefit. His views prompt a reconsideration of reliance on these plans for achieving financial stability in retirement.
401(k) plans are expensive, with administrative fees, limited investment choices, and potentially higher fees than other options, making them a less favorable retirement solution.
You pay taxes on 401(k) withdrawals at your ordinary income tax rate, posing potential tax disadvantages compared to investment options taxed at capital gains rates.
Employer matching in 401(k) plans might create a false sense of security, as it's seen more as compensation owed than a generous benefit for employees.
Kiyosaki's views challenge the conventional wisdom surrounding 401(k)s, advocating for a reevaluation of these retirement plans that many financial experts endorse.
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