The Great 401(k) Swindle
Plus: The 90-Second Retirement Plan (That Works)
Welcome to this week’s issue of Further, a newsletter for people in their 50s and 60s looking for a more satisfying alternative to the mythical “golden years” retirement.
If you’re here and haven’t yet subscribed, join 19,000+ people looking to live their best life at midlife by grabbing our free resource: The Further Guide to Unretirement Planning.
Our generation has a lot of labels:
The “X” Generation
The Forgotten Generation
But when it comes to the current retirement crisis, we’re the 401(k) Generation. That means we’re the first cohort to be almost fully reliant on a retirement savings vehicle enacted in 1978.
The truth is, the 401(k) was never designed to replace traditional pensions. What began as a supplemental savings vehicle has morphed into something entirely different:
"The great lie is that the 401(k) was capable of replacing the old system of pensions," former American Society of Pension Actuaries head Gerald Facciani tells The Wall Street Journal. "It was oversold."
Yet here we are, with more Americans than ever using these retirement accounts not for their golden years, but to handle today's financial emergencies at record rates.
According to Vanguard Group, which administers retirement accounts for nearly five million people, 4.8% of account holders took early withdrawals last year — a significant jump from the prepandemic average of about 2%.
The primary reasons? Preventing foreclosure and paying exorbitant medical bills.
Plus, as consumer confidence declines while essential costs like groceries continue to climb, more people are falling behind on auto loans and credit card payments.
This wasn't the original vision when Congress altered the tax code with the Revenue Act of 1978. What started as a tax-advantaged supplement has become the primary retirement vehicle for most Americans:
Even the father of the 401(k), Ted Benna, tells The Journal with some regret that he “helped open the door for Wall Street to make even more money than they were already making.”
Meanwhile, traditional pensions have become increasingly rare. The security of guaranteed retirement income has been replaced by accounts that rise and fall with financial markets — a far riskier proposition.
Worse, we’ve been trapped between immediate financial needs and future security and have been forced to rob our future selves to handle today's emergencies.
This reveals the fundamental contradiction in our retirement system. The 401(k) has become our generation's emergency fund by necessity, helping us get through crises such as 9/11, the Great Recession, COVID-19, and whatever is looming on the near horizon.
And what’s left to fund a 30-year retirement? Not nearly enough.
For those in their 50s and early 60s, starting a location-independent business that leverages your experience provides a solution that traditional retirement planning simply can't deliver.
In other words, a more secure way to continue earning compared with traditional employment, while experiencing the freedom and travel that retirement was supposed to offer but no longer does.
For Gen Xers, it’s too late for better retirement accounts. Instead we need to rethink the very concept of retirement itself.
Keep going-
P.S. As anticipated, the U.S. stock markets are plunging this week given the uncertainty created by Trump. Down below, our in-house investment expert Denver Nowicz gives you some fresh perspective on how to enhance your income streams beyond the precarious retirement account approach promoted by Wall Street.
New to Further? Join us here.
The 90-Second Retirement Plan (That Works)
By Denver Nowicz
The financial world just got a fresh dose of uncertainty.
With Trump escalating a new trade war, tariffs are back in the spotlight, bringing potential market volatility, inflation concerns, and global economic uncertainty.
If history is any guide, this kind of turbulence could rattle stocks and force investors into defensive strategies.
For retirees and those nearing retirement, the biggest risk isn’t market swings — it’s relying entirely on investments for income when the rules keep changing.
For decades, the investment industry has spent billions of dollars trying to crack the code on retirement income. PhDs in finance, advanced mathematical models, and entire firms dedicated to answering a single question:
How do you withdraw 4% per year from your investments and not run out of money?
And after all that effort, the answer seems to be:
🔹 Maybe it works. Maybe it doesn’t. 🔹
Retire at the right time, and you might catch a long bull market that makes the whole thing feel easy. Retire at the wrong time — say, 2008 — and you could be waiting a decade just to get even (when people in their 50s only have a decade to go until traditional retirement milestones).
Even bonds, the supposed “safe haven,” failed retirees when they needed them most.
So, after all this complexity, what if the real answer was simple?
Why Old-School Pensions Were So Simple
Your grandparents didn’t stress over investment withdrawal strategies.
They had Social Security + a pension — a paycheck that arrived every month, no matter what. No market crashes. No “sequence of returns risk.” No complex formulas.
And here’s the kicker: They actually got to enjoy retirement.
But today?
📉 Pensions are gone.
📉 Retirees are left to figure it out themselves.
📉 Most people don’t realize they can recreate a pension-like income stream—on their own terms.
The 90-Second Retirement Plan
Instead of crossing your fingers and hoping the markets work out, set up a financial defense:
✅ Social Security: Typically covers ~40% of your expenses.
✅ Guaranteed Income (Fixed Annuities): Can cover another 40%.
✅ Everything Else: Invest, grow wealth, buy real estate, acquire businesses, or just enjoy life
Here’s how simple it is:
💡 Take 15%-20% of your portfolio.
💡 Lock in a guaranteed income stream for life.
💡 Cover 80% of your retirement expenses, no matter what.
💡 Use the rest for growth, fun, and legacy-building.
🔹 No market worries.
🔹 No withdrawal strategy stress.
🔹 No sleepless nights.
20% to Defense. 80% to Offense. Done.
This strategy works right now because annuity rates are at 20-year highs.
A few years ago, these rates were terrible — but today, we’re seeing payouts as high as 10-15% for life.
📈 That’s why this is a unique opportunity. 📈
Why Aren’t More Advisors Talking About This?
I recently spoke with an advisor from a big investment firm and asked:
With rates this high, are you helping clients take some profits off the table and lock in guaranteed income?
He laughed.
“Nah, we actually run ads against annuities — it’s good lead gen for us to sell more investments.”
That’s not financial planning. That’s sales.
At the end of the day, the goal of financial planning isn’t just growing money — it’s creating reliable income for when you need it.
And if you could cover 80% of your retirement expenses with just 20% of your assets, wouldn’t you at least want to know how?
Income = Freedom
Once your core expenses are covered, investing becomes fun again.
✅ You can take calculated risks in the stock market.
✅ You can buy real estate and explore new ventures without worry.
✅ You can actually enjoy life instead of stressing over market cycles.
📉 Markets have been at all-time highs, but perhaps not for long.
📌 Should you take some profits and guarantee some of your income?
It’s a question worth asking.
Because when you know your baseline is covered, everything else becomes easier.
Want to Learn More?
In the upcoming Further premium membership here on Substack:
Denver will be sharing with you his entire methodology for this unique approach to allocating risk and generating guaranteed income.
Brian will be teaching how to start, market, and grow a successful location-independent business with multiple income sources.
You'll also get the inside scoop on how to become a global citizen that takes advantage of Untourist opportunities thanks to your overall Unretirement Plan.
Plus you'll discover how to blend Substack with your own website and other simple tools for maximum success with minimal tech hassle.
More soon!
further: flashback
🎶 Wild Cherry - Play That Funky Music, Wild Cherry, 1976 🎶
So the story goes that white boy rock band Wild Cherry was playing for a predominantly Black audience, since rock clubs were dying as disco took off. A patron shouted, "Are you going to play some funky music, white boys?" Rob Parissi proceeded to quickly write a very meta and very funky song that told the story, and it became the massive one-hit wonder of 1976. (YouTube)
further: sharing
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