"As much as I like the tax-favored status of 401(k) plans, I need to tell you something heretical, something almost nobody else will come out and say: Most company 401(k) plans stink," he said.
"They have high management fees and administrative costs that eat into your returns, and worst of all, they typically offer you lousy choices for your investments and not nearly enough control over them," Cramer added. "The 401(k) business is a racket for the managers who get to charge you these fees.
If you have the wherewithal Jim Cramer thinks the best way to maximize your investments is with a diversified portfolio of 5 to 10 individual stocks.
And typically a 401(k) plan doesn't allow for that. "They only let you choose from mutual funds, bond funds and perhaps index funds."
Cramer reminded that the whole premise of Mad Money is predicated on his belief that you can do better than many pros by actively managing your portfolio.
"Sometimes it feels like the whole 401(k) system was set up to benefit the financial services industry, not you," Cramer added.