I had ideas of pulling out of 401k and then figured out the advantage from a friend. When one takes out money from the 401 k after 65 years of age one is charged the tax rate that pertains to that fiscal year. That means that if one goes part time or does not earn much at 65 years of age then the tax would be naturally less then when one is making a lot of money at young age. This model works out good if the one thinks that one will make less money as one ages. What if one is going to make more money later in life? In that case one has to pay more for the 401 K when withdrawing. But saving money for the future is a good idea. Even if one loses all the bets on other things, something is left in the 401k to spend the rest of the life.
Then about Real and Nominal interest rates, I realized that Nominal interest rates are high and one thinks that banks give more money for deposits. I was thinking why should the banks give more money in India, i.e like 10 % rates for deposits. They give such high rates because of double digit inflation rates in India. Compared to United States, where the inflation has almost stabilized at 2%, inflation in India is very high. And depositing money in bank is no safe way of fighting inflation.
One good way to fight inflation on a long run is to invest in stable stocks that give good dividends and also beat the inflation.
This is the wisdom of the day