102 • MARTIN H. RUBY
Fat-Free Frozen Yogurt If you’re a Seinfeld fan like me, you’ve undoubtedly taken more than a few life lessons from the TV show that’s just supposed to make you laugh. But there’s one episode that sticks out in my mind when I think about people mindlessly saving in their 401(k)s. Do you remember the Seinfeld episode where Kramer invests in a fat-free frozen yogurt shop? It’s the hot new hit in town, and George, Elaine and Jerry find themselves eating there almost daily. After all, the frozen yogurt is so flavorful, so delicious… and it’s fat-free! There’s no guilt in eating it. A few weeks later, Jerry and Elaine are perplexed. None of their clothes fit. They’ve put on 7 or 8 pounds. They can’t figure out what happened. Until they remember the fat-free frozen yogurt. No, says Kramer. It can’t be the yogurt. The yogurt is fat-free. It’s good for you. As we all know, it was the yogurt. Because fat-free doesn’t mean calorie-free. And it doesn’t mean sugar-free. So why does this remind me of saving for retirement? 401(k)s are the fat-free frozen yogurt of the savings industry. They have become the most popular way to save for retirement. People plow savings into them every day. And they feel good about it, because their money is growing tax-deferred. It’s fat-free. It has benefits. Of course, savers are overlooking the other features that matter when saving — the calories and sugar content, if you will. Is defer- ring your taxes helpful? What restrictions come with 401(k)s? Much as it took weeks for Jerry and Elaine to discover the un- savory downside of yogurt (weight gain), most people don’t realize the downside of their 401(k) until it’s too late and they’re nearing retirement. That’s what happened to me, and if you talk to people in their sixties and seventies, there’s a good chance it’s what hap- pened to them, too.
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