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Study: 401(k) Retirement Plans Failing Most Workers
CBS MoneyWatch ^ | Sep 6, 2013 | Constantine von Hoffman

Posted on 09/07/2013 6:39:30 PM PDT by Toddsterpatriot

According to a new study, the 401(k) savings account isn't adequately providing for people's retirement and is adding to the nation's growing wealth inequality.

The report from the Economic Policy Institute, a liberal-leaning public policy think-tank, illustrates how the shift from pensions to individual savings accounts has affected retirees. The authors find that it is the wealthiest workers who are benefiting the most because they can actually contribute enough to make 401(k) plans work for retirement.

"401(k)s were never designed to replace pensions for most workers. They serve primarily as a tax shelter for high earners," said economist Monique Morrissey, the report's co-author, in a statement. "The 401(k) revolution has been a disaster, yet some policymakers are calling for cuts to Social Security, which will be the only significant source of retirement income for most Americans--if they are able to retire in the first place."

Snip...

According to the report:

Retirement-income inequality has grown in part because most 401(k) participants are required to contribute to these plans in order to participate, whereas workers are automatically enrolled in defined-benefit pensions and, in the private sector, are not required to contribute to these plans. Thus, higher-income workers are much more likely to participate in defined-contribution plans. In addition, higher-income workers have more disposable income and a higher investment-risk tolerance, receive larger tax breaks, and are more likely to work for employers that provide generous matches.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Humor
KEYWORDS: epi
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Imagine how much better they'd work if you could put your 12.4% Social Security "contribution" into your 401k.
1 posted on 09/07/2013 6:39:30 PM PDT by Toddsterpatriot
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To: 1rudeboy; Mase; expat_panama; Rusty0604; Jim 0216; xjcsa; VegasCowboy; 10Ring; Bishop_Malachi

EPI......Ping!


2 posted on 09/07/2013 6:40:26 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Toddsterpatriot

I think the goal is to do the reverse, steal all the 401K money and prop up social security.


3 posted on 09/07/2013 6:41:07 PM PDT by Vince Ferrer
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To: Toddsterpatriot

Time to confiscate those evil 401(k)s.


4 posted on 09/07/2013 6:41:28 PM PDT by E. Pluribus Unum (When your policy is to rob Peter to pay Paul, you can count on enthusiastic support from Paul.)
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To: Toddsterpatriot
...wealth inequality.

I know exactly where this is going.

5 posted on 09/07/2013 6:42:23 PM PDT by BitWielder1 (Corporate Profits are better than Government Waste)
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To: Toddsterpatriot

BS

Most workers failing the 401k plans.


6 posted on 09/07/2013 6:42:26 PM PDT by CincyRichieRich (“Life is hard, but it’s harder when you’re stupid.” John Wayne)
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To: Toddsterpatriot

Just because higher earners are able to leverage more benefits from 401K’s does not mean pensions are better investment instruments than 401k’s for the average worker.


7 posted on 09/07/2013 6:44:04 PM PDT by Fzob (In matters of style, swim with the current; in matters of principle, stand like a rock. Jefferson)
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To: Vince Ferrer
Of course. Can't have a private solution that works much, much, much, much, much better than the government one.

I may have left out a much or ten.

8 posted on 09/07/2013 6:44:11 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Fzob

How’d those Delphi pensions do for the average worker?


9 posted on 09/07/2013 6:45:56 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Toddsterpatriot

contradictory.

if the accounts are causing a measurable “wealth disparity,” then people are certainly saving enough money to help their retirements

since the article does not make any other sense, our “propaganda alarm” is emitting a high pitched warble /..


10 posted on 09/07/2013 6:49:35 PM PDT by faithhopecharity (E)
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To: Toddsterpatriot
Great. First we get the scare tactics of how our 401(k)s are failing us. Next, we will be told how the government will do a much better job running our 401(k) investments than our current private investors. And next thing you know, our 401(k) funds will hold the same value as our current Social Security Trust Fund.

No thanks, keep your damn hands off my money. I'll decide what's best for me.

11 posted on 09/07/2013 6:50:02 PM PDT by Hoodat (BENGHAZI - 4 KILLED, 2 MIA)
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To: Toddsterpatriot

Are we being setup for the grab?


12 posted on 09/07/2013 6:53:32 PM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will. They ALL have fairies livin' in their trees.)
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To: Toddsterpatriot
Imagine how much better they'd work if you could put your 12.4% Social Security "contribution" into your 401k.

What the hell are you trying to do? End the cycle of poverty in this country? Have people actually build up an inheritance that they can pass down to their family when they die? Don't be such a hater. Big Brother knows what's best.

13 posted on 09/07/2013 6:54:20 PM PDT by Hoodat (BENGHAZI - 4 KILLED, 2 MIA)
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To: Toddsterpatriot

Poland Confiscates Half Of Private Pension Funds To “Cut” Sovereign Debt Load...

http://www.zerohedge.com/news/2013-09-06/poland-confiscates-half-private-pension-funds-cut-sovereign-debt-load

(I left mine at it’s peak, several years ago, and took the penalty. No regrets. No worries.)


14 posted on 09/07/2013 6:57:20 PM PDT by PGalt
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To: Toddsterpatriot

They should allow 401k plans, both employer provided and individual, the option of converting all funds to a regular savings account every 5 years. Remove the 10% early retirement penalty and offer a flat 15% tax rate and you’d see over 6 trillion in 401k balances convert providing a tax windfall for the government and a huge savings for retirees.


15 posted on 09/07/2013 6:57:50 PM PDT by RockyMtnMan
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To: Vince Ferrer

Exactly. These are the arguments they use to nationalize private retirement accounts. Low income people can’t save so it’s not “fair” and possible stock losses are not as safe as letting the gov’t keep it for you and doling it out to you when they deem fit.


16 posted on 09/07/2013 6:58:11 PM PDT by Rusty0604
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To: Toddsterpatriot

401s not making it? No kidding. NO growth in the economy, no return on investments.

Rate of return on stocks = inflation + dividend yield + GDP


17 posted on 09/07/2013 6:58:40 PM PDT by Sequoyah101
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To: Toddsterpatriot

Here it comes

We now are going to start hearing a lot more of these type of stories and “studies” in the coming months


18 posted on 09/07/2013 6:59:02 PM PDT by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
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To: Toddsterpatriot

The 401k was a great thing. The problem is convincing younger workers to utilize it to the max and not borrow against it.


19 posted on 09/07/2013 7:06:31 PM PDT by Lurkina.n.Learnin (If global warming exists I hope it is strong enough to reverse the Big Government snowball)
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To: Hoodat

Exactly this is the setup to seize these accounts for a broke gov.


20 posted on 09/07/2013 7:08:45 PM PDT by sarge83
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To: Hoodat

We’ve got about 5 years until we can start draw down without penalty. I hope things hold together that long. We’ll draw the max without penalty for sure.


21 posted on 09/07/2013 7:11:25 PM PDT by FreedomPoster (Islam delenda est)
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To: Toddsterpatriot

“You didn’t build that!”


22 posted on 09/07/2013 7:15:48 PM PDT by Mark (Donate to FreeRepublic now.)
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To: RockyMtnMan

6 Trillion dollar? Not sure about that, you see the 401k “locked up” was never intended to be release. It’s the govenment piggy bank just waiting for rainy day.


23 posted on 09/07/2013 7:19:06 PM PDT by Orange1998
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To: Mark
“You didn’t build that!”

Excellent point. If you didn't build that business that you put 20 years into, you certainly didn't build up your 401K year after year either.

Right now, the ONLY thing I want to put money into is a 401K, so I'm starting my own business (I can put all my earnings up to about $22,000 into one, since I'm over 50.). Anything else is taxed at 50%, so there' no point working just to hand half of it over.
24 posted on 09/07/2013 7:23:07 PM PDT by yorkiemom
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To: rockinqsranch

Are we being set up for the grab?

Hell, I’d say the grab has been taking place for years and years as inflation reduces the value of all retirement accounts whether 401K, IRA’s or simple savings accounts.


25 posted on 09/07/2013 7:23:28 PM PDT by CARTOUCHE (Take a stab at it OJ.)
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To: Hoodat

Next, Pelosi will be saying the .gov will have to take your 401k to keep the .gov from taking your 401k.


26 posted on 09/07/2013 7:25:47 PM PDT by ebshumidors
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To: E. Pluribus Unum
Time to confiscate those evil 401(k)s.

Only a matter of "When."

27 posted on 09/07/2013 7:27:44 PM PDT by dfwgator
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To: Toddsterpatriot

Hegelian dialectic at work.

1) The statist establishment creates a crisis by mis-educating the workers for decades.

2) Most workers won’t have any idea of how to calculate their retirement needs (they weren’t taught math or econ. in the publik skools).

3) In comes the “Government Family” on a white horse to save the day.

4) The ‘rich’ who were driven by the ‘perverted profit motive’ to screw the poor, will now have to ‘pay their fair share’. IRAs and 401K’s will be looted to pay for the righteous ignoramuses who voted for a free lunch. Many of them will use their benefits to buy drugs or enter strip clubs.

5) The rest is obvious. USA becomes Peron’s Argentina (run by Evita Clinton), or worse.

Baaaaaaa - Sheeple - Baaaaaaaa.


28 posted on 09/07/2013 7:29:01 PM PDT by rfp1234 (Impeach We Much!)
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To: Toddsterpatriot

One might want to investigate what the ridiculous zero percent interest rate is doing to the 401k if your money isn’t growing you don’t have the benefit of compound interest and your money does not grow enough to provide a retirement income. It is just like Social Security which is also tied to a ridiculous interest rate, among other things, like not having the money go into a trust fund for SS recipients and instead being spent in the general fund where it cannot grow. The entire system has been corrupted by the Fed, Congress, and who knows what else.


29 posted on 09/07/2013 7:29:21 PM PDT by wita
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To: CARTOUCHE
Are we being set up for the grab?

Ya think!?!

This whole article reads like a how-to-Hate-The-Rich manual. (toss in a few standard digs against whites and anyone with a college degree for good measure).

30 posted on 09/07/2013 7:31:47 PM PDT by workerbee (The President of the United States is DOMESTIC ENEMY #1)
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To: PGalt

This must be the current Polish socialist gov’t in action.
They took over after the more conservative PM Kaczynski died in Russia.


31 posted on 09/07/2013 7:32:04 PM PDT by rfp1234 (Impeach We Much!)
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To: Toddsterpatriot
The report from the Economic Policy Institute, a liberal-leaning public policy think-tank,

No surprises here.

32 posted on 09/07/2013 7:33:27 PM PDT by CaptainK (...please make it stop. Shake a can of pennies at it.)
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To: CaptainK

They lean liberal like the CPUSA leans left.


33 posted on 09/07/2013 7:37:32 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: rfp1234
This must be the current Polish socialist gov’t in action.

Socialism Is Legal Plunder - "The Law" - Bastiat

There is no end to the machinations of these psychopaths.

34 posted on 09/07/2013 7:38:59 PM PDT by PGalt
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To: rfp1234

Never mind. Tusk is supposedly a ‘center-right’ Prime Minister. That doesn’t mean much in Europe these days.


35 posted on 09/07/2013 7:40:04 PM PDT by rfp1234 (Impeach We Much!)
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To: rockinqsranch
Are we being setup for the grab?

That is exactly what this article is all about and the blatherings from the lefty think tank are manufactured to prepare for this eventuality.

Thing is, almost every lefty I've ever talked to about having their 401(k) seized by the government says the same thing: They'll shoot the criminals who do it.
36 posted on 09/07/2013 7:49:28 PM PDT by Pox (Good Night. I expect more respect tomorrow.)
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To: Toddsterpatriot

This is CBS BS. I am a worker and my IRA which I started at 27, has enabled me to become financially independent, even though I have inherited almost nothing.

Now they wanf to steal my IRA to “help” me. Right.


37 posted on 09/07/2013 7:51:38 PM PDT by The_Media_never_lie (Actually, they lie when it suits them! The crooked MS media must be defeated any way it can be done!)
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To: Toddsterpatriot

Oh boy... Here comes the drumbeat for the federal government to take over and “manage” private retirement accounts. It starts with propaganda pieces from the state-run news media, like this piece from CBS. Look for one of these (at least) per week.


38 posted on 09/07/2013 7:58:11 PM PDT by Lancey Howard
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To: The_Media_never_lie

No kidding. I cry when I see how much my SS would have earned in the market compared to the pittance I’ll receive at 67.


39 posted on 09/07/2013 7:58:47 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Lancey Howard

I suspect that the government wil be making a move on these accounts in some fashion soon. The writing is on the wall.


40 posted on 09/07/2013 8:04:54 PM PDT by LongWayHome
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To: Toddsterpatriot
and so it starts...

..the poor workers who are not on the govt teet and working for a living and paying into their OWN retirement fund are going to be roasted and basted.

until there is a CRISIS and the fed govt and the sob will have to SAVE us and take our money so they can really do better with it...

they'll call it pension "reform"....and they'll steal every single one of our hard earned pennies...

41 posted on 09/07/2013 8:10:20 PM PDT by cherry
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To: Toddsterpatriot

And add the amount your employer paid in and you would be extremely wealthy.


42 posted on 09/07/2013 8:12:41 PM PDT by Lurkina.n.Learnin (If global warming exists I hope it is strong enough to reverse the Big Government snowball)
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To: Toddsterpatriot

I wonder if Monique Morrisey’s job benefits include a 401K...


43 posted on 09/07/2013 8:53:44 PM PDT by silverleaf (Going to war without the French is like going hunting without an accordion.)
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To: silverleaf

It sounds like EPI offers an excellent benefit package.


44 posted on 09/07/2013 9:14:39 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: CincyRichieRich

Most workers aren’t putting much into 401Ks. Those who do too often borrow against it or cash it out, instead of letting savings grow.


45 posted on 09/07/2013 10:09:50 PM PDT by tbw2
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To: qam1
We now are going to start hearing a lot more of these type of stories and “studies” in the coming months

Yes we will. The intent of these stories is to take away our IRAs and shore up Social Insecurity with them. In other words, theft by govenment.

46 posted on 09/08/2013 12:18:38 AM PDT by sr4402
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To: Toddsterpatriot

If a worker’s SS account had been invested in mutual funds for their benefit and not used to buy votes by the government, each worker would have well over a million dollars at their disposal at retirement time.


47 posted on 09/08/2013 4:37:24 AM PDT by The_Media_never_lie (Actually, they lie when it suits them! The crooked MS media must be defeated any way it can be done!)
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To: Toddsterpatriot

Solution: Unionize everyone with plush plans and raise the minimum wage to $50/hour. Add price controls and forced manufacturing and services to keep products flowing....Worked great for the Soviet Union and others around the world - no way did only the rich benefit...


48 posted on 09/08/2013 4:38:56 AM PDT by trebb (Where in the the hell has my country gone?)
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To: Toddsterpatriot

Here they come. Notice how they mention that those 401Ks are adding to the nation’s wealth inequalities.

They are going to take them soon. Especially if the House falls to democrats in 2014.


49 posted on 09/08/2013 4:41:58 AM PDT by dforest
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To: tbw2
Most workers aren’t putting much into 401Ks.

Actually, most people have an IRA or a 401K.  We got more 401Ks than IRAs now, they just haven't gotten as big yet--

 

How many Americans have 401(k)s?

In 2011, 51 million American workers were active 401(k) participants.

401(k) Plan Assets
Billions of dollars, end-of-period, selected periods

Millions of Americans use IRAs to save for retirement. An estimated 48.9 million U.S. households, or 40.4 percent, owned IRAs as of 2012

IRA Assets
Billions of dollars, selected years

 

--and this means the average worker's got around $100K stashed away.  Good enough.

50 posted on 09/08/2013 5:27:18 AM PDT by expat_panama
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