It seems that Jeffrey Reeve’s latest article, “Dump your 401(k): Common sense vs. conventional wisdom,” has created a bit of a firestorm on the forum. The article argues that “Americans are trapped by an economic model that treats conventional wisdom as common sense.” He goes on to say that “It flies in the face of common sense to adopt the thinking of the Wall Street wonks and dolts in D.C.”
Jeffrey goes into great detail, comparing the conventional wisdom of contributing the maximum amount to 401(k)s — even when it doesn’t make sense in our current situations — with the “alternative, common sense” approach of paying a significant amount annually in participating whole life insurance premiums.
The article has definitely caught the attention of some of our readers, as evidenced by activity on the forums. According to stevec360, “deriding 401(k) investing at its lowest return over 10 years in almost 100 years doesn’t seem like CS to me.” Meanwhile, advizorr says, “As a financial planner, author and trainer, I can tell you that you are spot-on once again.” What follows is a detailed (and sometimes heated) discussion that is well worth the read.
Be sure to read the article and ensuing discussion and don’t forget to add your own thought as well. Something tells me this debate won’t be settled any time soon!