Some 401(k) fears valid, others not, experts say

Somewhere on a assembly line is a young worker who once told a reporter: I wouldn’t put my money in a 401(k) because the boss could steal it.

Rest easy.

In average situations, there is very little chance the boss could steal the money from a 401(k), which would be a crime, probably involving fraud.

Contributions to a 401(k) go to a financial company. Maybe the boss picked the company, but the boss can’t access your money. The boss doesn’t own it and can’t spend it.

Fear: I can’t afford to contribute

There are a lot of benefits to a 401(k). The money you put in isn’t taxed. It’s only taxed when you take it out at retirement.

If you took about $100 a week out of a paycheck every month for 15 years and put it in a 401(k), you would probably have more than $146,000 at the end of 15 years. At the end of 30 years, you’d have $611,729. This example by the Motley Fool assumes a return of 8 percent.

So, when you reach retirement, you might have your Social Security (depending on government future plans), and you’ll be able to add to it by taking 4 percent of your nest egg each month. You’ll be comfortable if you sacrifice now.

Fear: I’ll lose all my money

Over the long term, there is a 99 percent chance you will make money. But sometimes you won’t. Recently, retirement plans have racked up interest of 10 percent and higher. But in 2008, during the housing crisis, people lost money but not all of their money.

If you can’t stand losses, you usually can have your plan administrator put your money in highly conservative, safe investments. They don’t make as much money, but they don’t lose it either.

Fear: What if the company goes out of business?

Your money is safe because the company usually doesn’t manage retirement accounts. They have big financial companies like Fidelity, Vanguard, or Principal do that . Those companies manage millions of retirement accounts. Motley Fool says be skeptical if the plan administrator is “Scruffy’s Retirement and Fried Chicken.”