Image: Photo by Mathieu Turle on Unsplash

Hello friends. Friendly reminder that while our financial lives may seem like a disaster and we’re all stressed out about not having enough money, one of the few financial vehicles that actually benefits people who use it is the 401(k).

In this story about a study reporting that 66 percent of millennials have $0 saved in their 401(k)s, Vice writes that, “It is worth noting, however, that 401(k)s are generally bullshit.” (Emphasis theirs.)

Where to begin. Yes, I understand that 401(k)s aren’t magic. You need money to save money, not everyone has access to them (particularly as freelancers and gig economy workers comprise ever more of the workforce), and it can be overwhelming or seemingly impossible to think about saving for retirement when you have a mountain of student loan debt and your rent eats up half of your paycheck. Employers are much less generous than they used to be, and our retirement crisis exemplifies that all people, of all age groups, have trouble saving money. Defined benefit plans (a.k.a. pensions) were nice when they existed and were properly managed. Ideally, people would be getting more money. I’m not disputing any of this.

But there is a general cynicism that permeates certain areas of the web/culture that basically seems to say, well, we’re all screwed, so why even try? I don’t think this is the intent, but I can’t help but see it as a consequence, and it’s irresponsible. If a bunch of publications that you trust tell you that 401(k)s are bullshit, and you don’t know any better, are you going to prioritize contributing to your retirement account? You can be mad about the system while still encouraging people to do what’s in their best interest, which is to put some money away for retirement.

Here are some of the study’s other takeaways:

  • Most employed people aged 21 to 32 who are saving for retirement have less than $20,000 saved
  • The average balance is $67,891
  • 83 percent of working Latinos and 70 percent of African Americans have nothing saved
  • Only 55 percent of Millennials are eligible to participate in an employer-sponsored retirement plan, compared to 77 percent of GenXers and 80 percent of Baby Boomers
  • This puts them on par with other generations, per other studies: two-thirds of Americans across generations aren’t putting money into their 401(k)

I am not trying to proselytize about 401(k)s and claim that they’re the ideal and ultimate financial product, or that you need to pull yourself up by your bootstraps and do better. As the study indicates, those working may not even have the option to use one, as our employers get ever more stingy. And I can’t make you save—particularly if you do not have the money to save—but I will say this: the system may be bullshit, but 401(k)s aren’t.

Publications that are making a point to spotlight growing inequities and the dangers of permalancing and gig economy work—which they absolutely should—also need to take the time to educate people on what they can do to better their finances, particularly if employers and the government won’t. You can throw your hands up in the air and say everything sucks, but at the end of the day, you need money. It’s not something to be cavalier about. So if you are lucky enough to have access to a 401(k) at work and the ability to contribute, then contribute. Even just a tiny bit.

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I’m not talking about aiming for the maximum (for 2018, that’s $18,500). But even if you contribute one or two percent of your paycheck, that’s exponentially better than contributing nothing at all. This is true for many reasons:

  • If your employer offers a 401(k), they likely offer an employer match. And you should think of that money as part of your compensation. Would you be ok with your employer paying you $49k instead of $50k when you agreed to the latter? No? It’s the same thing with your 401(k) match. Suddenly your two percent contribution becomes four percent. They should be giving you the money anyway, but they’ve put this requirement on it, so you should do it regardless. If you don’t put in enough to get the match, you’re essentially forfeiting a portion of your salary.
  • It lowers your taxable income, meaning you’re paying less in taxes and therefore taking home more money.
  • Typically fees are lower than if you invested on your own, and you can gain exposure to expensive stocks you wouldn’t be able to otherwise (like the Amazons and Facebooks of the world).
  • Compound! Interest!

Please contribute something to yours, especially when you’re young. “If you go back and look at it historically, people who invested in a 401(k) have money in retirement,” says Kevin Dixon, senior market analyst at Market Traders Institute. “They’re incredibly intelligent vehicles. It’s a no-brainer, really.”

So: Be mad. Understand that maxing out your retirement account alone likely still won’t be enough to live off of in retirement, and that many of us will be working long after we would like. Fight to keep the safety net in place, and push our government to expand it rather than quietly eroding it piece by piece. Understand your entire financial picture, beyond investing for retirement, and what needs to be done to put you in the best position possible. As the study suggests, lobby lawmakers to loosen ERISA (Employee Retirement Income Security Act, which governs benefits) participation restrictions and back your workplace’s union. Demand that politicians institute the fiduciary rule.

But don’t be fooled into thinking it’s better to tweet about how screwed we all are than to put a little money away in your 401(k). It might seem painful and fruitless now, but you’ll be better off. Use cynicism to demand more and better, but don’t let it harm your future finances in the meantime.

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