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Does TikTok Really Hate the 401(k)?

Practice Management

A recent MarketWatch article poses the intriguing question: “Why does TikTok hate the 401(k) so much?”

Now, as social media platforms go, I’ve pretty much avoided TikTok. Oh, I’ve swung by it from time to time just to see what the “fuss” is, but generally speaking (and even in “retirement”), I’ve better ways to spend my day than scrolling through two-minute videos of—well, to my eyes, pretty insipid stuff.

On the other hand, I’ve long “dabbled” in social media platforms, and by dabbled, I mean I have established accounts, moseyed around, and ultimately “engaged” (some of you may (hopefully) even have noticed that I’ve been doing two-minute videos on LinkedIn for the past several months)—it’s just never been my “day job.” I’ve been on Twitter since 2008—LinkedIn even longer. Facebook (yes, I AM a Boomer, after all) since my kids got on it, and Instagram once Mr. Zuckerberg shackled that app to Facebook. I’ve read books on the subject of social media, attended conferences and training sessions (live and online) about how to use/leverage these tools—and still spent a lot of time over the past couple of decades waiting for the day when the actual response to a LinkedIn (or Twitter) post…mattered. I don’t mean the “likes” that Twitter shares, or the “impressions” or number of “followers” these platforms attribute to one’s account. They’re valuable metrics, of course—widely shared (and sometimes trumpeted). 

But as much as I enjoy social media—and relish the relationships that I have found and fostered there, in my experience it's still a bit of an echo chamber—one (still) frequented by people who are already “on” social media. Indeed, it seems for the very most part the people who are “there” are there to promote the use and value of social media to those not yet in that “club.” Not that you won’t find valuable content there—but plan sponsor clients? Participants?

That may be changing, of course. Published reports claim that TikTok has over 1.677 billion users globally out of which 1.1 billion are its monthly active users as of 2023. By any measure, that’s a lot of eyeballs. 

Setting aside the number (or quality) of those eyeballs, DOES TikTok really “hate” 401(k)s? 

Well, at least according to the article, it’s frequently cast as how the 401(k) menu limits your access to more “exotic” investments, and sometimes how hard it is to tap into those retirement savings. They even pillory the notion that you’ll eventually have to pay taxes on those withdrawals (glossing over the taxes you DIDN’T pay on the contribution and subsequent earnings)—one guy actually disparages (as one of FOUR reasons) 401(k)s as an effective retirement plan because it wasn’t INTENDED to be a retirement plan.  And yes, he has a product to sell/pitch.

That said, the “anti-401(k)” messages to be found on TikTok (and they still seem few and far between) are pretty much the same ones you find on any number of personal finance “guest contributors”—the type frequently crafted by individuals who would very much like to help you find your way to their “better” solution. 
Even on TikTok there ARE, of course, helpful messages as well—and a number of recordkeepers have already staked out some real estate on that platform.[1] But sadly, there appear to be no barriers or knowledge filters here, nothing to indicate that the purveyors of these solutions have, or should be accorded, any credibility on the topic(s) on which they hold forth. Rather, it seems that all you need is a short, snappy message, a rhythmic dance track in the background, and a steady camera (sometimes not even that) to garner attention.       

As noted above, I’ve been ON TikTok, but not established an actual account as I’ve been sensitive to the cautions about data sharing and privacy associated with that platform (though I’m only a tad less concerned about what American HQ-ed platforms do on that front). Overall, some parts of the TikTok “universe” may well be focused on sneering at the value of 401(k)s—and with audience numbers like those above—and a global reach, it’s easy to understand the appeal to any number of shucksters out there.    

But what I’d advise TikTok users to remember is P.T. Barnum’s observation…a man who knew something about shucksters—that there’s a sucker born every minute. 


[1] Though their followings seem to be pretty modest, and their messages pretty superficial.