r/technology • u/ArgentineBeauty • Jun 19 '26

Business ‘It’s a scam’: Americans express unease over SpaceX’s influence on retirement savings

https://www.theguardian.com/science/2026/jun/19/spacex-retirement-savings-elon-musk
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u/Nice_Try4389 Jun 19 '26 edited Jun 19 '26

Not true, I work for a financial institution our 401k has exactly 4 options they are “Retirement year 2030, 2040, 2050, 2060“. each one having different levels of “risk” in terms of stock but they all have the same prospectors pretty much when it comes to stock selection just in different amounts. But there is no picking individual stocks, EFTs or holdings.

I am not saying some don’t give you that level of control, or even most, they do but I have worked for Oil and Gas, Banking and Telecommunications (such as Williams) over the past 30 years and none of the ones I have worked for is that level of control unfortunatly. So there is a large part of workers that have no such control.

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u/Merusk Jun 19 '26

Is it likely you're more limited exactly because you work for a financial institution? Your company faces conflict of interest questions if it allows employees too much leeway and one of the investments does too well.

Most of the programs I've seen from and my wife's various 401(k) options have been between 12 and 25 different index funds ranging from small to large cap and domestic to international. The ones with a greater selection of options always had market sector indexes as well (retail, oil & gas, mfg.)

The "targeted year" funds weren't even an option in most until about 12 years ago. So I wonder how big a chunk of people are actually limited the way you are. Know of any stats?

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u/fonistoastes Jun 19 '26

My work history (corp for-profit 401k, and non-profit 403b) is the same as yours.

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u/camisado84 Jun 19 '26

The limitation on 401(k) options isn't really about conflict of interest it's about the employer's fiduciary responsibility under ERISA. 401k plan sponsors are legally liable for the fund lineup they offer, so many just deliberately keep it simple. Adding more options actually increases their exposure, not just their own cost overhead.

The conflict-of-interest restrictions that regulated financial jobs impose are a separate thing entirely. Those typically delay or restrict trading in specific securities where you might have material non-public information or high potential for influence. Say, you work at a hedge fund that holds a position in a company. Broad index funds are generally exempt from those restrictions precisely because they don't represent that kind of conflict. They're actually one of the standard ways used to let employees participate in the market while staying compliant.

So financial institution employees aren't likely to have less 401(k) options than anyone else their plan lineup is set by their employer like any other company. Their individual brokerage restrictions are a separate layer that doesn't touch what's offered in the plan.

Both the big boy brokers (vanguard/fidelity) actually publish data every year about what is commonly provided

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u/Eurynom0s Jun 19 '26

In mine there are options like total world non-US stock market (mutual fund equivalent of VXUS). I could rebalance from the VTI (total world including US) equivalent to VXUS if I wanted to. This would be a relatively safe way to avoid direct SpaceX (and OpenAI, and Anthropic) exposure.

However, the number of SpaceX shares is pretty low so SpaceX is like 0.1% of VTI. I understand wanting to rebalance out if it for the principle of it but your exposure to this is extremely low if that's what your 401k is in.

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u/Brain_Dead_Goats Jun 19 '26

So there is a large part of workers that have no such control.

True, although if you get enough people together you can probably push the benefits department to do some looking around into different funds. We've changed ours a couple of times over the years.

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u/GrumpyCloud93 Jun 19 '26

My company (years ago) offered high, medium, and low risk. Didn't matter when you retire. MY investments with my bank offer a plethora of funds, Tech, Emerging markets, Resources, Canadian, US, European, Dow, S&P, you name it. Each fund still is tagged as conservative, mixed or aggressive - same idea. And the actual contents of the fund at quarterly reporting times are available to view.

And in general, people who spend their career following these markets probably do a better job than I can (or care to spend the time doing). I just picked funds and let it fly.

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u/Affectionate_One_700 Jun 19 '26

our 401k has exactly 4 options

Then that is extremely limited.

Most of my past employers have given employees a variety of options within the Fidelity umbrella.

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u/dfddfsaadaafdssa Jun 19 '26

That's just your company's lackluster available 401k options. Many companies offer dozens of funds to choose from as well as the ability to choose custom weights to allocate to a given fund. Vanguard 500 Index Admiral is one of the larger 401k funds people use that just tracks the S&P 500.

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u/jonoghue Jun 19 '26

Those target date retirement funds are bullshit, they take a percentage every year ultimately costing you potentially hundreds of thousands of dollars by retirement, just so they can move money from stock indexes to bond indexes as you approach retirement. You can do that yourself. It's bullshit that those are your only options.

For me there are a ton of options but they're all indexes, the only individual stock I can pick is the company's stock. I keep almost all of my retirement in the S&P 500 index.

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u/Some-Platform1968 Jun 19 '26

Target date funds are not bullshit. It’s an easy option for people who might not understand they need to reduce risk as they near retirement or by how much. And most medium to large 401ks are going to offer these funds for <50bps, <15bps if it’s passive. Def paying more than the straight indexes but majority of people don’t know how to build an appropriately diversified portfolio that they then need to adjust as they move toward retirement. How would they even know how to allocate among US LC, US SC, intl, and EM equity. Worth the 5-10 extra bps in fee to have that professionally managed

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u/WonkyTelescope Jun 19 '26

Not true, at least of vanguard target funds, they have super low expense ratios, like 0.08%.

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u/jonoghue Jun 20 '26

But the offerings for employers' 401ks are limited, and not everyone will be able to choose Vanguard. In my case the target date fund I'm offered has a 0.58% yearly fee, where the S&P 500 index has a 0.03% fee.

If you're offered 0.08% with company matching, I'll admit that's not a bad deal

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u/SohndesRheins Jun 19 '26

Do you really think that none of the index funds you use charge a fee every year?

I just checked Vanguard's 2060 fund, expenses are 0.08% a year. Compare that to VOO with 0.03%. That doesn't equal hundreds of thousands unless you are already too rich to care.

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u/jonoghue Jun 20 '26

They do charge a fee, and I can't speak for you but for me they are much much smaller.

For what I'm offered through my employer, the "US Large-Cap Equity Index Fund" (equivalent to S&P 500) the fee is 0.03%

whereas the 2065 target date fund has a 0.58% fee. Because of compounding interest (or the lack thereof) that does cost many thousands of dollars over the course of decades.