[Huck]

Savings in a bank - you give them money and they give you a reward (interest) for using that money. YOU CAN ACCESS ALL OF IT AT ANY TIME WITHOUT PENALTY WITHOUT HARMING YOUR RETIRMENT INVESTMENTS.

Savings in a 401K (which could be bonds, stocks, etc). You give someone money and they give you a reward for using that money. BUT YOU PAY A HEAVY PENALTY FOR ACCESSING THE MONEY BEFORE IT'S 'DUE', AND YOU DAMAGE YOUR RETIREMENT INVESTMENTS BY TAKING MONEY INTENDED FOR LONG TERM INVESTMENT AND USING IT FOR IMMEDIATE NEEDS.

Get the difference? It's not insignificant.

[2banana]

Savings in a bank - you give them money and they give you a reward (interest) for using that money. YOU CAN ACCESS ALL OF IT AT ANY TIME WITHOUT PENALTY WITHOUT HARMING YOUR RETIRMENT INVESTMENTS.

Savings in a 401K (which could be bonds, stocks, etc). You give someone money and they give you a reward for using that money. BUT YOU PAY A HEAVY PENALTY FOR ACCESSING THE MONEY BEFORE IT'S 'DUE', AND YOU DAMAGE YOUR RETIREMENT INVESTMENTS BY TAKING MONEY INTENDED FOR LONG TERM INVESTMENT AND USING IT FOR IMMEDIATE NEEDS.

Get the difference? It's not insignificant

So you are saying that someone who puts 2% of his pay in a passbook account at 1.3% interest is a better "saver" than someone who puts 17% of his pay in his 401k (in a mix of stocks and bonds)?

[Edit35]

BUT YOU PAY A HEAVY PENALTY FOR ACCESSING THE (401K) MONEY BEFORE IT'S 'DUE',

Not to quibble, but you CAN borrow against a 401K, under most plans, anyhow.

Of course you have to pay the going interest rate, which as of late has been relatively cheap, around 5-6 percent.

My son borrowed against his 401K recently (around $1,000) when he needed money to move, and he paid it back several months later.

Although I wouldn't advise it for most people, it came in handy for him.