💡 Frequently Asked Questions (FAQ)
- Q: Why does Dave Ramsey criticize 401k plans?
- A: He argues 401ks rely too heavily on market volatility and high fees, leaving workers exposed to downturns instead of building guaranteed wealth through debt-free investing and cash savings.
- Q: What is the $450,000 lesson he refers to?
- A: It refers to a case where an employee lost significant retirement value by concentrating savings in company stock and 401k market funds, highlighting the risk of overexposure to equities and employer dependence.
- Q: Is holding company stock in a 401k really risky?
- A: Yes, it concentrates both job risk and investment risk. If the company struggles, the employee can lose income and retirement savings simultaneously.