Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
Showing Original Post only (View all)401(K)s Are A Sham - Salon [View all]
401(k)s are a shamDuped by a DIY retirement dream, the elderly now face staggeringly low living standards
By Helaine Olen - Salon
Tuesday, Aug 6, 2013 05:25 AM PDT
<snip>
For retirement, the answer is 4-0-1-k, proclaimed Tyler Mathisen, then editor of Money magazine in 1996. I feel sure that someday, like a financial Little-Engine-That-Could, it will pull me over the million-dollar mountain all by itself. For this sentiment, and others like it, Mathisen was soon rewarded with an on-air position at financial news network CNBC, where he remains to this day. As for the rest of us? We were had.
The United States is on the verge of a retirement crisis. For the first time in living memory, it seems likely that living standards for those over the age of 65 will begin to decline as compared to those who came before themand thats without taking into account the possibility that Social Security benefits will be cut at some point in the future.
The culprit? That same thing Mathisen celebrated: the 401(k), along with the other instruments of do-it-yourself retirement. Not only did they not make us millionaires as self-appointed pundits like Mathisen promised, they left very many of us with very little at all.
You might be tempted to ask what went wrong, but a better question might be why did we ever expect this to work at all? Its not, after all, like we werent warned. As early as 1986, only a few years after the widespread debut of the 401(k) and the idea that American workers should self-fund their own retirement accounts based on savings and stock market gains, Karen Ferguson who was then, as she is now, the head of the Pension Rights Institute, warned in an op-ed published in the New York Times, Rank-and-file workers have nothing to spare from their paychecks to put into a voluntary plan.
But her voice, and that of other critics like economist Teresa Ghilarducci, who is now at the New School and described our upcoming retirement crisis as an abyss in 1994 congressional hearings, were drowned out by the money and power of the financial services industry, combined with their enablers in the personal finance media who proclaim even today that if we dont have enough money set aside for retirement, it is all our own fault.
Its not...
<snip>
More: http://www.salon.com/2013/08/06/big_finance_lied_401ks_will_not_save_aging_americans_partner/
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
62 replies, 6326 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (52)
ReplyReply to this post
62 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
One of my friends is a tax accountant and he says that annuities are a very, very bad investment.
avaistheone1
Aug 2013
#28
Every state has a guarantee association (SGA) which insures qualified annuities
Major Nikon
Aug 2013
#40
So if the company fails, there is no federal guarantee, but I could depend on the State of Texas?
jtuck004
Aug 2013
#41
AIG. Remember them? Texas company, thousands of annuities and life insurnace holders screwed
jtuck004
Aug 2013
#46
Not even one policy holder was screwed and none were ever at risk at any time
Major Nikon
Aug 2013
#49
The fucking insurance commissioner was about to place them in receivership, unless you want to
jtuck004
Aug 2013
#50
I have done quite well with my 401k. But I still have a Defined Benefit Pension for most of my
doc03
Aug 2013
#2
The New Low Wage Part Time Economy By The GOP Won't Fund LIfe Let Alone A 401K
TheMastersNemesis
Aug 2013
#4
Combined with stagnated wages, rising expenses and an anemic stock market failure is assured.
geckosfeet
Aug 2013
#9
One way or another, we have to transfer $2.5 trillion from workers to retirees over the next 20 yrs
Recursion
Aug 2013
#15
Just a shell game to fund the wallstreet gamblers with money so they could play with it
SoCalDem
Aug 2013
#16