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Comments about ‘Experts say the 401(k) has failed Americans’

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Published: Friday, April 20 2012 11:52 a.m. MDT

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JoeBlow
Far East USA, SC

It is ludicrous to say that 401K's have failed Americas. Maybe Americans have failed Americans, but not 401K's

The 401K is a great vehicle for savings however, it must be funded at adequate levels.

The real shame between older generations and the newer ones is that less and less companies have retirement plans.

chacecannon
Salt Lake City, UT

This article is misleading. The truth is, is that people do not know how to save. People have always thought that they would have a guaranteed retirement with SS and did not bother to save enough for retirement. There are articles all over the place that say the exact same thing you need to save more and then they throw out some high number and say you need to save 15% of your pay check. The fact is not many people can save 15% right off the bat. As a 401(k) plan advisor I advise people to 1. start 2. increase your deferral by 1% every year. If they do that by the time they are retiring they are saving upwards of 30% or more from their paycheck and now those high savings numbers are doable. It requires discipline and consistency. If people do those things they can have a great retirement and then the 401(k) has not failed them but helped them to succeed and reach the goals they have set.

UtahBlueDevil
Durham, NC

Solution - privatize Social Security so people can use wisdom with those funds as well... that way the minimal safety net many rely on is at risk as well.

ER in EUR
Belgrade, Serbia

This article is stupid. People choose to save, not financial instruments. $60K total? You work 35 years and that comes to around 1700 a year. Ehhh? That is around 140 dollars a month. That is not taking into account interest. So these people are planning on living a similar lifestyle after quiting work by saving around $50 a paycheck? Yo'own darn fault if you so dumb.

You want to have a nice life after retirement? Plan. Run the numbers. Take some risks. Make sure they are worth it. Do some gimmes that don't return as much. Freakin' buy a rental house right now with interest rates at below 4% (I know you will have to buy a point to get that rate on an investment, but c'mon, have a plan). NO ONE IS YOUR FRIEND. What I mean is there is no one out there to take care of you if you are not taking care of you. Have a plan.

ER in AF
Belgrade, Serbia

Oh yeah, and another thing. If you want to buy something that will take money away from your retirement plans, work extra for it. I am even as we speak sitting at my desk on a Saturday working cuase I bought a motorcycle yesterday. I will have to do a few Saturdays to pay for it. Plan, sacrifice, do the hard things and don't wait for someone else to take care of you.

Supposedly SS will drop to 75% 2 years after I retire. So I work my whole life and then get the shaft. Take care of yourself and make sure you ain't relying on SS as your fallback.

KDave
Moab, UT

The Dems have a plan to confiscate all 401k and IRAs. They believe it is all Gov. money because it was not taxed. They spent so much time in Obamas' first two years on Health Care they didn't get to it before they lost the House. Watch out if Obama is re-elected and they re-take the House.

UtahBlueDevil
Durham, NC

"The Dems have a plan to confiscate all 401k and IRAs. They believe it is all Gov. money because it was not taxed."

Say what? What is the source of this earth shaking revelation? I am willing to take a guess.....

ER in EUR - not sure what you do for a living, but you surely aren't one of those who is trying to pay your monthly bills at near or close to minimum wage. Take those people who provide those oh so cheap product everyone buys at their local Walmart. Lets be really generous and say uncle Wally is paying them $10 an hour. If they are lucky enough to get 40 hours a week that comes to a grand total of $400 a week - minus social security, medicare and state unemployment taxes - which everyone pays. So lets be real generous, that leave $350 a week to feed, cloth, house, and provide transportation. Your question, why is an additional $50 a week such a big deal? You do the math. You tell me what kind of a home you can provide on 30% of your income - $400 a month - plus utilities.

Real World, Real People. Not Rhetoric.

PGVikingDad
Pleasant Grove, UT

401(k)s have failed Americans' retirements in exactly the same way vegetables have failed Americans' diets. Give. Me. A. Break.

3grandslams
Iowa City, IA

Ridiculous to say 401's have failed, what kind of spin is that?

Igualmente
Mesa, AZ

Most of us don't know how much we are paying in service fees. When will 401k fees be easily available and understandable? If that were to occur, there would probably be a big shake-up in the 401k business.

UtahBlueDevil
Durham, NC

3grandslams - 401k were to be the replacement of retirement packages that many companies offered their employees as a reward for years of dedicated service. It was the norm for the generation before us. You worked for company X for 30-40 years, you were rewarded by having a retirement income for your last 10 to 15 years.

As the contract between employee and employer began to crumble at the edges, corporate America pushed this concept of 401k plans where the company would co-contribute to an employees retirement, taking this liability off of their balance sheets. It worked great when times were good. Companies matched, some like mine donated regardless if I contributed a single cent. But when times got tough, these plans became too expensive, and many cut back or even eliminated their side of the contribution. If companies not afford to contribute, surely it became difficult for employees to contribute as well. Some firms stayed by their commitments, like mine, and continued to contribute.

But the fact is, many have reduced their portion or matching, and thereby, yes, these plans have failed. They have not matched what they were to replace in company provided retirement plans.

Winglish
Lehi, UT

The United States version of capitalism has its flaws and this is one of them. How a society cares for its elderly citizens is a defining reflection of the ethics of that society. Our country chose to borrow from its system of social security to pay for other interests. In doing so, we have failed as capitalists.

Social Security should be self-funded. People put in, people take out upon retirement. We simply must find a way to make the system work without increasing the retirement age. The Romney plan to increase the retirement age is not based in reality. Bodies break down. Older people cannot do the physical labor they once did.

The 401k is a supplement to most savers' retirement. Very, very few people make enough money to be able to save enough to retire on. Social Security money has been taken from our checks for 30+ years for that very purpose. The money was ours. We earned it. The money has been taken from us by our government. That governement must now live up to its promise to fund our retirement. In full. On time. This is not negotiable.

Anti Government
Alpine, UT

401K rules and regulations PREVENT me from contributing over 4% of income to my 401K.

Yes you read correctly.

I work for a fortune 500 company listed on the NYSE. We have alot of employees in our company...about 50000 or so. Many of them make wages in the teens. As a result of limited participation in our 401K by those lower income employees 401K regulations limit my ability to contribute.

What a stupid regulation!! Our government is so ridiculously idiotic it blows my mind! Do they want me to be dependent on govt income during retirement? Do they want me to be poor when I am old so I have to rely on Medicaid?

Here we have a tax free contribution option and their regulations prevent me from contributing more than 4% because it would be "unfair" for me to be able to contribute more than lower income workers.

Once again. Dumb politicians and government regulation with good intentions for "fairness" only create more problems.

I am just over the income threshold to get a tax break on IRA's too. So anyting I do has to be after tax savings.

Our govt works overtime creating roadblocks for people.

baddog
Cedar Rapids, IA

30-some years ago my wife and I bought a business. Inexperienced as I was, I thought we would pay off the contract and have plenty of money from appreciation when we sold at retirement. So we put what we should have saved into building the business.

Due to several factors, we sold well before retirement and didn't recover our investment in growing the business. There went our retirement.

I went to work for a large company that had a retirement program. After 6 years, our retirment was frozen and vested and a 401(k) initiated. An accountant friend suggested we save 10% a paycheck. The company matched a portion of it.

Looking at my balance this morning, my wife and I are WAY ahead of the average 401(k) balance in a relatively short time. Even starting late pays off. And I started at pretty low salary.

People failed the 401(k). You can't take out what you don't put in.

RedShirt
USS Enterprise, UT

To "Anti Government" you must really be earning a lot. 401K limits are around $17,000 per year, and a Roth IRA can allow you to save another $5,000 per year for you, and another $5,000 for you wife (if she works at all). So, if you can only save 4% of your income, that means that you are earning over $400,000 per year. With that sort of income, why are you not investing your money into realestate, stocks, or mutual funds. Yes you may have to pay taxes, but why should you limit your retirement savings based on how much you can deduct from your taxes?

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