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The 401(k) started out as a tax loop hole to supplement workers' savings, but many baby boomers are finding their retirement in tatters and aren’t able to leave the workforce due to grossly inadequate savings.
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Justin Boucher's profile photoJohn OBrien's profile photoBrent Alexander's profile photoMatt Gross's profile photo
18 comments
 
This article is terrible.  You claim that the "rich" are the only people using 401ks, so we need to have a socialized federal pension on top of Social Security (which is already a socialized Federal pension?)

I save more than my 401k match because I want to try to manage my money like the wealthy, and I know that I cannot count on any sort of federal entitlement. 
 
Its time to go back to pensions...yes they need to be reformed a bit (private and public) but, companies need to start taking better care of their employees. I read on forbes that calling a 401K a retirement plan should be called a criminal act. As the article points out, they were never meant to be relied upon solely.
 
+Justin Boucher What if you are self employed or do not wish to work for one company your entire adult life? 
 
There is no such thing as a guaranteed retirement plan.  401k's are not the problem, because without them, most people probably would not have saved near as much as they have with the tax incentive.  Even if there were no such thing as a 401k, those inclined to save would have likely invested in something very similar to what they hold in their 401k's.  The last thing we need is another govt managed retirement program.  Social Security is a complete failure and an example of why govt isn't competent to handle that responsibility.
 
So the only two retirement choices should be a government pension or an IRA? I think companies should supply retirement information and resources to younger employees, but ultimately it is the responsibility of the employee to get educated on this topic and take the necessary steps.  Even if it means having to give up your daily starbucks to fund your retirement account. 
 
+Justin Boucher why is it an employer's or the governments responsibility to provide for your retirement? 
 
+John OBrien Um....why wouldn't it be an employers responsibility to provide retirement? BTW...to set the record straight +John OBrien +Matt Gross , I never said nor do I support Gov't managing the publics retirement benefits, unless they're a Gov't employee.
 
+Justin Boucher it is your responsibility to plan for your retirement. If your employer offers a retirement as an incentive for you to work for them that is great but your retirement is not your employers responsibility 
 
+John OBrien is right.  But it's more than a matter of it just being each of our responsibility.  It is too important to entrust to someone else.  We all need to take an active role in our future.  We don't all have to become financial experts, but we all should learn enough to know how to work with someone who is, and to make informed choices.  We all should embrace the freedom we have to make those choices, and the responsibility that goes along with that freedom.
 
+John OBrien Quite the contrary actually. You may feel like that but, thats not how it works. As an employer, you're going to pay for it one way or another. If you so choose to not offer retirement options or insurance, you're gonna make up for it in higher wages. Not to mention the higher training costs associated with not being able to hold on to employee's.
 
+Justin Boucher that's all well and good but we were talking who's responsibility it is not what may or may not be beneficial to the employer, two different things altogether. 
 
This kind of thinking is one of the reasons social security is so screwed up. Social security when first enacted was never ment as an individuals only source of retirement but as a supplement to a retirement you had planned for but now look at the number of people who's only retirement plan is social security. 
 
+John OBrien No matter what way I look at it, its ultimately the employer who will bare the financial responsibility of it (and rightfully so IMO). Just wait...20 years tops and we will be in a massive financial mess because of the 401K being relied upon solely. Employers tend to forget that employees are consumers too, if they don't have it, they're not spending it. 
 
Your biggest fear with your 401K is a government take over. There are those in the government that feel they have a right to that money because you have not paid tax in it. The reason they are eyeing that pool of money because of the 17 trillion of unfunded social security that will have to be paid out. Noone ever talks about this debt but it is out there looming. Do you want to guess the approximate amount of money in 401Ks. 
 
+Justin Boucher What makes you think that a small business owner is going to be responsible for an employee's bills many years into the future after that employee has long since stopped working?  If you want to put your head in the sand and hope that someone looks out for your retirement for you, that is a choice you can make.  But as I said before, those free choices come with a responsibility, and you are ultimately responsible.  
 
+John OBrien They don't need to tax 401ks to get that money, inflation (the ultimate tax) will get it. The amount of money in 401k's is subject to the market and economy. That in-turn goes back to another problem we're facing right now. Baby boomers don't have enough money to retire. Some of that is their own fault the other part of it is 401ks took a big hit during the recession and haven't fully recovered. Younger unemployed people would find it easier to find a job if baby boomers were retired.
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