Even 50 something seniors who were thrown out in the cold are screwed. My experience with the older set were a lot of them were anti labor and anti regulation and particularly anti union. They seem to have bought into the idea that the same entities that would protect their interests were evil. Now they are royally screwed.

and if they were the high spending, high debt crowd when times were good they are ROYALLY screwed

them, the Republican Party will become extinct. nt

The GOP still has enough power to stop everything. No one is challenging them publicly.

I did note that Time had an article that blamed the sequester in the Republicans. That kind of article helps.

How will this affect republicans,401k's were established in 1978 under the Carter Administration i know because that is when i started mine.

I think it actually started under Reagan by a gentleman named Ted Benna. The 20th anniversary was January 2001.

it's kind of a mystery to me why people would be very receptive to being forced to bet their entire retirement on them. If it was the 90s, and equities generally performed very well, I could see why people would consider it a credible argument, but now...?

I suspect there is a reason you say they have not.

so there! touche!

That's great.

Can you not recognize that for most that is not the case. So those of us without your savvy should what? Not get to retire because we didn't know the rules of wall street or gamble well? Why is it that after a lifetime of work the only ones who can retire in comfort are those who gamble well. Why must we invest in the casino of wall street in order to retire at all? 401ks are a joke. They have high fees and necessitate that workers learn something outside their area of expertise in order to succeed or be connected with one who is knowledgable enough to properly guide them. Not everyone gets that. In fact most do not. What kind of society is so cruel that they make retirement unreachable for so many?

O I know. The same one that impoverishes families unlucky enough to have one member develop a serious illness.

Bonds, annuities, and savings and a lot of mutual funds now do not give any earnings. You get 1/4 of 1% on savings now. And most of the offerings from financial investment instruments are heavily loaded with hidden fees and other fees. Brokers get 1% to 1 1/2% fee on all their accounts whether they make money or not.

The GOP has so many people focused on their bible, their gun, their religion and primarily race. The GOP keeps playing the drum that Democrats and Obama are giving your money and taxes to brown people. Look at Romney.

Whether you have a social security system or an individual retirement system, when you have a large cohort retiring and a smaller cohort beneath them with stagnating wages, it's difficult to find a way for the money to work -- with 401k's, this takes the form of massive securities price crashes as the entire Baby Boom or Baby Echo try to cash out at once.

started during the Clinton administration and did fantastically. Then Bush came in and it cratered twice, once after 9/11 and again in 2009. Since then, it has doubled under Obama.

Conclusion: Democrats in office will be good for the 401(k), especially if you hold equity/growth positions. When a Republican comes into the office, put your money in very stable, safe vehicles like bond funds and muni-funds. They return almost nothing (3 - 5% APR) but are not likely to drop, and they run counter to equity/growth/value funds.*

*I'm not a qualified financial planner, so take the above with a very large grain of salt.

They pay nothing. I have one. I've lost about all I ever gained. Useless.

Social Security is the only security when you are retired.

And how are they "pretty useless once you retire"?

That doesn't make any sense, unless you're stupid enough to continue investing aggressively.

Agree regarding Social Security.

They may make nice vehicles for saving money when you are young. But when you retire, you need income.

Whether you are "investing" or saving in bonds, in conservative mutual funds or in bank accounts, interest rates and returns are so low right now that only the very rich receive meaningful income.

401(K)s are useless for providing income in retirement. The only thing that does that for most seniors is Social Security. Certain professions and jobs have good pension plans but even they are unreliable.

For average people with average to low incomes, the only hope for the senior years is Social Security. It's frightening but true.

I notice that some younger people who invest in riskier growth funds make what looks to them like a good return. But the fact is you could not pay 1/2 of your monthly rent on the return on, say $200,000 dollars.

Interest rates now are less than 1/2% from most conservative funds or accounts. On savings of $100,000 (way more than most people are able to save in a lifetime of raising children, paying a mortgage, sickness, job loss, etc.) your annual return is maybe just over $5,000 per year. Here in California, you cannot rent or buy a house for that, much less eat, pay for health care. (That would not cover condo fees in many places or pay the taxes plus insurance in a modest home). Social Security pays on average between $1200-1300 per month. That is just enough to keep you above the poverty line.

Here is the reality for most seniors:

Almost half of our nation’s workers have less than $10,000 in savings and 30 percent have less than $1,000. Barely half of all workers have access to retirement plans through their employment and millions retire without enough private savings to provide an adequate income.

http://www.ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1098/Protecting-Social-Security-Medicare-and-Medicaid-in-Deficit-Reduction-Budget-Talks

A lot of seniors receive only from $500-1000 per month from Social Security. That is below the poverty line. They survive on food stamps and other government programs.

Here is some more scary information about retirement: the cost of assisted living and of nursing homes.

http://www.elderlawanswers.com/average-cost-of-nursing-home-room-tops-70000-a-year-3417

The headline is that the average cost of nursing home is $70,000 per year. A 401(K) is pretty irrelevant when you think of costs like that.

A lot of young people do not realize that under laws in states like California probably passed prior to Social Security and Medicare, children are responsible for the costs of caring for their parents.

Keeping Social Security and Medicare payments and programs at their current levels should be a priority for everyone.

401(K)s are probably great for the well-to-do. But they create false hopes in the rest of the folks who use them.

The chances are very great that, even if you do save in a 401(K), at some point in your life, you will be forced to borrow against or spend down your 401(K).

And God forbid you get a divorce. Funding your retirement is an even bigger problem for those who do.

No. 401(K)s are OK for the rich who want just a little extra cash when they retire, but not for the $50,000 a year person with 2 kids who want to go to college and a mortgage.

They are peanuts for most retirees. That is especially true for today's seniors because they didn't become popular until the 80s and 90s. If you start saving the maximum in a 401(K) in your 20s, they might add up. But if you didn't earn a lot of money and only started putting money in during your 40s, 50s and 60s (the case for those recently retired or about to retire), you probably don't have enough in there to be of any use.

Plus when you get to be over 70 1/2 you have to start taking the money out of your 401(K) and paying taxes on it.

I just spent some time with someone who is very elderly and lives in a condo building with a number of other elderly women. Trust me. You don't want to have to worry about balancing a checking account or making sure you have paid your bills much less handling what is left of your 401(K) when you are 90. And you certainly don't want to have to worry about making sure you take out the right amount of money from your 401(K)

Just calling to straighten out a small billing error can nearly cause a heart attack or a stroke in a very elderly person. One of the big follies of people who help the young "plan" for retirement is the illusion that older people will be able to or want to handle investments and bank accounts as they age. The 401(K) is a wonderful tool for scam artists. I reviewed the "investments" of some older people. It was an experience I would not want to relive. Older people are very vulnerable to the unscrupulous, to thieves without consciences.

Social Security is secure. It is reliable. It is the answer for most seniors -- the only answer for most seniors. Other savings are nice and helpful, but not what seniors need.

In addition, I would like to point out that the problems that Congress anticipates with running out of money in the Social Security Trust Fund will not be unique to that fund. Once baby boomers start withdrawing their money from their 401(K)s and their savings accounts, you will see stress in some of the banks and possibly on Wall Street.

Social Security is the only answer for seniors. We should be raising the cap on the amount of income subject to the payroll taxes, not encouraging people to try to "invest" on Wall Street through 401(K)s.

Sorry this is so long. My posts are always long and big on detail.

Nothing that you wrote appears to be based on anything factual.

Let's look at the most modest enrollment in a 401K. Just 1%. Most employers match at least 2%, so let's look at how much someone will make with moderate returns.

Say someone starts saving in their 401K at the age of 27. They make $50,000 and put only 1% + 2% in their 401K.

After 35 years, at the age of 62, they will have over $500,000 in their 401K. Now, that's only if they're not stupid enough to withdrawal from it or quit making contributions because the market goes down.

So, the only reason I can see someone discouraging from using their 401K is because they don't think someone can afford to be without that 1% (actually less than 1%) or that they don't think people should save for retirement.

Your other point is that Social Security will be so much more than what someone has in savings. In my scenario someone will have an additional $1350 dollars every month for 30 years after they retire.

Is $50,000 rich to you?

I'm also not sure why you think that me, or anyone else, is arguing for one over the other, but it sure seems that way.

I personally believe that the Social Security retirement age should be lowered to 59 and made stronger by raising the payroll tax cap on income.

But, I also feel that saving, even if it's by using the benefits of a 401K, should NEVER be discouraged.

In Germany and Austria, when we lived there, the government had a system in which it matched what you saved up to a certain amount. I think that was a great idea. That was in addition to a government pension system.

I had a number of employers. Only one of them matched what I put into my 401(K), and the "match" did not amount to much. In my experience, the 401(K) was only what I put into it. Baby boomers and those of us a bit older than they did not have the choice of putting money into 401(K)s until, in my experience, the early 1990s. When the Bush crash occurred, a lot of people lost a great deal. If you retire at the right time, you may think you have earned money on your 401(K). But if you retired in 2008, as some of us did, then your 401(K) was in a miserable state. And right now, the "investments" recommended for seniors pay very, very, very little.

I hate the 401(K)s. They will never replace or compete with Social Security because Social Security is secure. 401(K)s are a gamble. That's all they are. In fact, all money entrusted to Wall Street or annuities or banks is a big gamble. At least that is how I feel as I watch the big gamblers steal from the small-time savers through the big gamblers speed trading and other gimmicks. I cannot stand Wall Street. I think it is full of cheats. I did not feel that way until the end of the Clinton era. I read a lot about the crash of 1929 and I noticed in 1997 that "investors" were acting very much like the crazy idiots in 1929 -- investing from their hearts, not from their heads. Frankly, I think that Wall Street and thus 401(K)s are just a big scam that steals from hardworking little people.

I'm not stupid. I've been watching for a number of years, and I think that 401(K)s are like spider webs with which the fat cats on Wall Street trick the little flies on Main Street into tricky schemes.

I do not like 401(K)s. Not at all. Not the way the game is played now.

Your scenario is a very unfortunate because you are in that generation that was still used to pensions, and not yet familiar with 401(K)s when they were introduced. I am 42 and I see it with my in-laws and other relatives.

But,

I'm not sure why you keep hating on 401(K)s. If used properly they work quite well. Your hatred of Wall Street and bankers might be clouding your judgement.

I agree that many people are stupid when it comes to using them, but whose fault is that? In my earlier scenario I explained quite plainly that someone could invest 1-3% of their income and do quite well for themselves. Everyone is different, but I can't tell you how many times I hear from peers that make over 120K who don't use their 401K; or save anything at all. I guess they'd rather have that boat or big car.

It's a volunteer program that encourages savings. What's wrong with that?

My wife and I are in our early forties and are on track to have over a million dollars in our 401K by the time we are 50. Maybe we should have just taken your advice and not taken the additional 8% of income that our employers were giving us by investing in our 401(K)s.

And I don't think anyone with half a brain thinks that they should replace Social Security. I don't know why you keep repeating that myth - especially here.

No hard feelings though, just strong opinions.

the playing field is so skewed toward the Fund Managers that at this time the holder is the loser. Went through three corporate BK's in my working career. Had two Union defined pensions wiped out by the courts,all be it during Ronnie the Ragun regime,ended up with a 401k that,with luck,was able to convert and make it work. It was pure luck and nothing else,got lucky on a IPO of our company. Took my money and ran for the hills before it went into the crapper.

Know tons of folks whom lost their butts and have diddle squat today by trusting our 401k plan advisers. Financial Adviser=Legalized theft. The system is so damned rigged towards the 1%ers.

Imagine you are 96. Now imagine that you can't use the internet. Now imagine that you have to manage your meager retirement savings. You can't pay someone to do it.

Rare, rare, rare and possibly insane is the senior who aged over 90 wants to or can manage retirement savings.

401(K)s are the stupidest idea ever.

Almost half of our nation’s workers have less than $10,000 in savings and 30 percent have less than $1,000. Barely half of all workers have access to retirement plans through their employment and millions retire without enough private savings to provide an adequate income.

ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1098/Protecting-Social-Security-Medicare-and-Medicaid-in-Deficit-Reduction-Budget-Talks

If Social Security did not exist, it would have to be invented. Seniors are scammed by everyone.

I'm sorry to be insulting, but as a senior with an even more elderly parent, I have to say that only the very, very rich, or the young and foolish think that 401(K)s are a good idea.

And, comparing 401K's to Social Security is moronic.

I also realize that they not nearly as good for most people as Social Security.

We need to protect and maintain Social Security benefits at least at the level at which they are now. Very few working people can afford to save enough to retire on, and it is really hard to get a job after the age of 40. It's even harder after 50 and nearly impossible after 60.

I'm not sure why we feel the need to compare 401K's to Social Security.

We, on the left, should do everything in our power to make Social Security stronger. That doesn't mean we need to tear down 401K's.

And, in my opinion, distort the facts on whether they can be useful or not.

I have had this go around with some wing nuts who think this should be our system.

The average american is something like 15,000 dollars in debt and as you highlighted, has next to nothing in retirement savings.

And, these geniuses think people have money to just leave sitting in health savings accounts?

The math on what these jackasses advocate for CLEARLY does not work.

But, 1/3 of the country will back them until the day they die, and another 1/3 of the country will obliviously believe "bah, they BOTH are the same ..."

. . . just another way of saying "Your health insurance SUCKS".

Almost half of our nation’s workers have less than $10,000 in savings and 30 percent have less than $1,000. Barely half of all workers have access to retirement plans through their employment and millions retire without enough private savings to provide an adequate income.

ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1098/Protecting-Social-Security-Medicare-and-Medicaid-in-Deficit-Reduction-Budget-Talks

I did some reading on this in the 1990s. Nothing has improved.

It's full Social Security, full Medicare or die. That's the choice.

it does seem like it is taking quite some time to sink in for the masses, though

A bunch of people trying to make assets liquid at once is a bad thing.

One way or another, we have to find a way to get money from working people to retired people. Any system is going to face the same problem in an aging population with stagnant wages.

I don't understand why people don't immediately see the point you are making. When the baby boomer bulge starts living off their Wall Street investments, the stock market will fall. It has to.

It will be bad enough when the baby boomers start putting their money into more conservative "investments" or gambles if you will even if they don't just take the money and live on it right away.

hell, i was talking to my aunt's financial advisor when he called. wall street is a joke. hell. a CRIME. or course the FED made BONDS pointless due to low interest rates. i invest is ebayables only. NOTHING called 'collectables'. that is another scam.

I know I'll never be able to retire. I have my 401K, but that's not going to cut it. We'll probably all end up living with extended families in order to keep a roof over our heads, food on the table. We won't be able to do it by ourselves or even with a spouse.

Rush Limbarugh , spokesman for the 1% and their banker friends; calls her the most dangerous woman in America..

Teresa Ghilarducci on Pension

Teresa Ghilarducci is a staunch advocate of comprehensive pension reform. She believes that the 401k is a regressive long-term savings vehicle that leaves the vast majority of American workers unprepared for the financial realities of retirement.
In the video below, Ghilarducci makes the case for a mandatory, government-sponsored defined benefit pension system.

Annuity Digest (http://s.tt/13Dq1)

http://www.annuitydigest.com/blog/tom/teresa-ghilarducci-pension-reform

Wal-Mart only needs a few greeters per store...

The first Boomers were born in 1946 (or 1947). That means those first Boomers who are now 67 or 68 are retiring, and we'll have retiring Boomers for the next 18 years or so (born 1946-1964).

What I worry about is the traditional nest egg: the home. It used to be when folks retire, they sell their home with a paid-off mortgage for several times what they paid for it (my sister and her husband sold the home they bought in 1966 for $18,000 for something like $350,000 in 2007. And they used that amount to retire on).

However, what will happen when numerous homes go on the market with relatively fewer buyers? Will prices stagnant? Even dip? What will happen when Boomers find they don't have anywhere near the nest egg their parents had due to a depressed housing market?

so that they still live in (or do whatever they want in) the home until they die. After death or final sales resolution, the reverse mortgage company takes over the home and sells it. In the meantime, the people can live off the value of the home.

I've also heard about a similar program with a life insurance. You buy a life insurance on yourself (you need to clear health tests and such), and then you take out a loan against your life insurance. When you die, the pay-out is the value of the policy less any outstanding loans taken against it.

There are also tax efficiencies inherent in the life insurance loan program.

the economy holds up in general. I think it will.

The problem for the baby boomers is that they were a huge demographic bulge and had fewer children compared to their numbers. Your generation will enjoy a better balance between your numbers and the numbers of your offspring. Your children will pay for your retirement. That is the way that Social Security is supposed to work. That is why the baby boomers beginning in 1985 paid extra payroll taxes, more than would be required for a generation with a better mathematical ratio of seniors to offspring.

You will be fine and probably able to work somewhat longer than the baby boomers. The problem now is that people in their 50s are losing their jobs and living off their retirement savings. Many have lost their homes. The baby boomers, contrary to the common myths, have always had it rough. I am a little older -- born during WWII. I remember when the baby boomers started school. There weren't enough classrooms or teachers. They started on half days where I lived.

Further, the tiny little houses built during the post-war period -- barely a bathroom, a small kitchen and three tiny bedrooms with no family room -- those were baby boomer specials intended for the suddenly exploding population.

You will never have to deal with the problems the baby boomers face. Your problem will be how to allocate the wealth created by new technologies. Work will be less important. Sharing will be more important. Having good water and a safe environment will be the headaches of future generations in my opinion.

Bluntly, our parents and grandparents will be dead, there aren't many of us, and there are a ton of millenials after us to pay for our retirement. We'll be in good shape. The millenials are the ones who have to worry.