The question is whether 401k plans and job-hopping still works out in the end.
It can, but it is a fragile "still works out in the end." It fails when a damaging event occurs near the time you need the money, such as a late-in-life divorce, job loss, illness, or financial collapse of investment vehicles. Winning at the 401(k) game means enough people losing their money through unlucky investments, and you get a cut of their losses.
Thought experiment: imagine everyone had enough income that they could save 10% in a 401 (k). BLS numbers say 10% of us wages is 1.1 trillion. Can you imagine the impact on the stock market if it received $1.1 trillion every year for 30 years? Where would that money be invested?
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This was already old news during the dot com era. The question is whether 401k plans and job-hopping still works out in the end.
To do that, though, you need to be able to switch jobs enough times, which isn’t easy when jobs are hard to find.
It can, but it is a fragile "still works out in the end." It fails when a damaging event occurs near the time you need the money, such as a late-in-life divorce, job loss, illness, or financial collapse of investment vehicles. Winning at the 401(k) game means enough people losing their money through unlucky investments, and you get a cut of their losses.
Thought experiment: imagine everyone had enough income that they could save 10% in a 401 (k). BLS numbers say 10% of us wages is 1.1 trillion. Can you imagine the impact on the stock market if it received $1.1 trillion every year for 30 years? Where would that money be invested?