Everyone thinks that the way to retire is to invest in a 401(k) or IRA and wait. Meanwhile, there are bills to pay, kids to get through college, and that lingering question after all is said and done: “When do I start to enjoy all this money I’m making?”

The problem with a 401(k) or IRA is that they are government solutions. We all know what government “solutions” look like: DMV lines, a $19 trillion deficit, and social security headed towards insolvency.

The government gives you limited tax breaks when you use an IRA or 401(k), but in exchange, it locks up your money by imposing strict limitations and forces you into investments that may underperform.

Here is a short list of problems with the 401(k) and/or IRA:

  • Losing money in a financial crisis or market crash
  • Being forced to pay penalties if you need to withdraw money early because of an emergency
  • Fees that seem low (3%) but in fact consume 1/3 of the average family’s portfolio over time.
  • Limited contribution amounts
  • Limited investment options
  • Force distributions

Relying on a 401(k) or IRA is akin to letting the government think for you. The consequences of entrusting your future to the government can include having less money to enjoy and pass on to your loved ones. Richard Kiyosaki, the author of “Rich Dad Poor Dad,” wrote, “Too many people are too lazy to think. Instead of learning something new, they think the same thought day in day out.”