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While millions of Americans diligently contribute to their employer-sponsored 401(k) retirement plans, “Rich Dad, Poor Dad” author Robert Kiyosaki and the Rich Dad Real Estate Team argue they’re making a massive financial mistake.

The article on the Rich Dad website makes a bold claim: Ditching your 401(k) in favor of multifamily real estate investing could be the key to a truly secure retirement. But is the advice from the controversial financial educator and his team right?

GOBankingRates talked to experts to get the inside scoop on what investment moves and retirement savings plan are right for you. 

The Rich Dad’s argument centers on several key points. First, it challenges the conventional wisdom about employer matches. “If it weren’t for 401(k)s, your employer would have to pay you that money as part of your salary,” Kiyosaki said. In other words, according to Kiyosaki, what many consider “free money” is actually compensation that would otherwise be paid directly to employees.

The Rich Dad article also took aim at the fees associated with traditional retirement accounts. “A typical 401(k) plan takes 80 percent of the profits,” it explained, leaving investors with just 20% of their potential returns.

Additionally, the article points to tax disadvantages, noting that while 401(k) gains are taxed as ordinary income (up to 35%), real estate investors can benefit from more favorable tax treatment.

The article also emphasized the lack of control that can come with traditional retirement accounts, unlike real estate, where you can directly influence returns.

Instead of relying on a 401(k), the Rich Dad article promoted multifamily real estate investing as a superior alternative. Here is some of the reasoning.

• Leverage: This involves using other people’s money to purchase a valuable asset.
• Appreciation: This is the ability to increase property value through effective management.
• Control: With real estate, you can have direct influence over income and expenses, unlike market-dependent investments.
• Tax Advantages: There are significant tax benefits with real estate, including depreciation deductions and capital gains deferrals.

“For many investors, it’s short-sided to find only one building and make managing it your job,” the article noted. “Instead, become an investor and find more great deals that you can purchase and have professionally managed.”

Eric Brown, CEO and founder of Imperio Consulting, acknowledged that Kiyosaki and his team raised valuable points about real estate’s advantages but suggested the argument against employer matches is oversimplified.

“Robert Kiyosaki’s suggestion that employers would otherwise directly pay the match into employee salaries oversimplifies how businesses budget compensation,” Brown explained. “Typically, these employer contributions are a separate cost — if an employee opts out, it rarely translates into higher direct pay.”

Brown said that 401(k)s offer practical benefits for average Americans, including tax advantages, automatic contributions and straightforward investing. However, he agreed with Kiyosaki about their downsides: limited control, fees and exposure to market volatility.

Aaron Cirksena, founder of MDRN Capital, took a more critical stance toward the advice from the Rich Dad article, particularly for the average American.

“Saying it’s a waste because your employer ‘could just pay you the match directly’ ignores the huge long-term benefit of compounding in a tax-deferred account,” Cirksena said. “That match isn’t just free money — it’s part of your total compensation, and walking away from it is like refusing a raise.”

Cirksena also highlighted the practical challenges of real estate investing: “Getting into multifamily real estate takes capital, credit, time and risk tolerance. You’re not just buying a cash-flowing asset — you’re managing tenants, repairs, taxes and different market cycles,” he said.

Thomas J. Brock, CFA, CPA, an expert with Retire Guide, directly refuted some of the article’s most controversial claims.

“Strong 401(k) plans do not take 80% of your profits. This is blatantly false,” Brock said. “You can keep over 99% of your profits in a quality 401(k) plan that offers a variety of low-cost investment options.”

Brock also pointed out that many 401(k) plans actually offer real estate investment options through real estate investment trusts (REITs) and other fund-style vehicles.

While Kiyosaki and his team made compelling arguments for real estate investing, most financial experts suggest the either-or proposition might be too simplistic for the average American.

For those without significant capital, credit or real estate expertise, abruptly abandoning a 401(k) for multifamily investing could be risky. “Trying to skip the 401(k) and go straight into multifamily is like skipping college to open a startup — you might crush it, but the odds aren’t in your favor,” Cirksena said.

Unsurprisingly, the consensus favors a balanced approach that leverages both traditional retirement accounts and alternative investments like real estate. Start with your employer-sponsored plan for tax-advantaged growth and steady contributions, and then gradually incorporate real estate or other alternative investments as your financial situation allows.