I think 401k's can be a good deal, but they're an even better deal for employers and the financial industry. Employers now offer these instead of a defined pension benefit, thereby putting the responsibility and risk with the employee. Every employer sponsored "qualified plan" I've had offered limited choices, high costs, and low flexibility- and mediocre returns even with index funds. For us employees, it's one of the few tax shelters, and it provides automatic dollar-cost averaging.
I think lessons of the last 10 years, and in particular the last 2, are taking on too much risk, and overly optimistic expectations of returns.
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