The IRS is increasing the standard deductions for 2023 as inflation intensifies

They feel like a prisoners dilemma to me. Pensions are a relic unless you chose your career wisely and were lucky/related enough to get in. So I’m stuck with whatever crappy 401k my employer provides and I’m hoping that my paltry investments now will support me for 2-3 decades when I’m to infirm to labor? Mind you I’m doing this while paying my criminally expensive (20-40% gross pre tax) health insurance for the privilege of neglecting to get healthcare I desperately need because I can’t afford all the out of pocket expenses required to actually receive the care I need because my employer won’t pay me enough nor will they absorb these costs. Lastly, I’m doing all this while praying that our comatose government won’t completely fuck over even harder while I try to scrimp and save and suffer my bootstraps up to a more than barely surviving state of existence. If by some miracle I survive to retirement and have no 401k (and assuming it would’ve performed well) I’ll be stuck living in a disgusting sro for the destitute. So yeah, they’rea sham to distract us from the fact that social safety nets have evaporated to juice the economy while surpassing the cognitive abilities of an average person.

1) in many cases investment options are limited to certain packages. These often suck major ass

2) in many cases there is a 1% + fee which absolutely obliterates your returns over the long run

3) your entire principal + capital gains are taxed as income when you take distributions whereas for an investment outside of 401k your principal gets taxed when you pay income taxes and then capital gains are taxed at a long term rate if you hold long enough, which is way lower than income rate. E.g. you actually kinda get fleeced on taxes too

4) your money is held hostage under threat of 10% penalty for a withdrawal and you have to practically beg for it it is so obnoxious to withdraw.

My 401k did like 4 % at a time when the s&p 500 did like 30. That's a straight up scam

It's probably too complex of a product for much of its audience.

The whole retirement process is usually presented with little useful guidance. Here's a packet of different investment offerings, many of which are opaque, and plenty are surprisingly inefficient (high fees, excessive turnover). How much should I be contributing? Here's a calculator with confusing and iffy assumptions baked right in! This all but guarantees the house will win in some way-- even if you get a "good" outcome, you're probably not doing absolute optimally and that margin bankrolls it.

Actually, I'd like to pull out a little. Investment in general is too complex for most people. My 401(k) using the default "2035 target date" plan I was offered is down 20% over the last year, but it's not like my self-directed investments are doing better. The only thing that's worked out bulletproof has been I-bonds, and I'm afraid I'm not going to get that far on that, with a 10k-per-annum cap.

TBH, what I want is a product where I can "prepay" retirement services and have someone else take the economic risks. In a way, defined benefit pensions were sort of like that, but I'd like to be even further decoupled from the dollar. Let me sign up to pay $x,000 per year during my working years, and when I'm 70, I get a paid-for-life furnished condo in (what will by then be) the palm-tree lined beachfront party town of Halifax, Nova Scotia.

If the counterparty to the deal is a brilliant dollar jockey and makes 70% a year compounded on my money, good for him and I don't see a cent of it. But if he bets it all on Meta and has to pick up dog droppings to pay for ramen, too bad, he's the one who's gotta pull a housing unit out of his ass in 2050. Put it behind some sort of state backing fund to ensure delivery of goods if you have to.

I also suspect the default 401(k) choices tend to reinforce our society's toxic relationship with the stock market. Yeah, there's probably something bond-centric or emerging-market somewhere in the Poorly Printed Menu of Confusing Investment Choices, but mostly, it leads to the narrative of "We have to keep pumping up the S&P 500, and make a bunch of flailing companies trade at a P/E of 73, because Grandpa's portfolio is fundamentally garbage but we feel a social duty to not make him work at McDonald's when he's 89."

Where exactly do you see dramatic interest rate increase? Are you referring to these tiny .75% increases? We have 3-3.25% interest rate with 9% inflation.