Skip to comments.Study: 401(k) Retirement Plans Failing Most Workers
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."
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 ...
I think the goal is to do the reverse, steal all the 401K money and prop up social security.
Time to confiscate those evil 401(k)s.
Most workers failing the 401k plans.
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.
I may have left out a much or ten.
How’d those Delphi pensions do for the average worker?
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 /..
No thanks, keep your damn hands off my money. I'll decide what's best for me.
Are we being setup for the grab?
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.
Poland Confiscates Half Of Private Pension Funds To “Cut” Sovereign Debt Load...
(I left mine at it’s peak, several years ago, and took the penalty. No regrets. No worries.)
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.
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.
401s not making it? No kidding. NO growth in the economy, no return on investments.
Rate of return on stocks = inflation + dividend yield + GDP
Here it comes
We now are going to start hearing a lot more of these type of stories and “studies” in the coming months
The 401k was a great thing. The problem is convincing younger workers to utilize it to the max and not borrow against it.
Exactly this is the setup to seize these accounts for a broke gov.
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