According to this study "The average participant, relying on their 401(k) as a primary retirement vehicle, will not be able to retire until the age of 73"
Yet another reason we shouldn't and can't rely on a 401k plan alone. The full non commercial report is available for free download after registration. A key finding; we need to contribute more to have a better retirement. In other news water is wet. Sorry for the sarcasm, but the massive shift from defined benefit to defined contribution plans is one of the worst things that have happened to the middle class in this country.
EDIT: Today I received an email from Terry Shipp in LAX reminding me about the genesis of the 401k plans. After doing a little research I came across this from Wikipedia. Along with the origins of these plans was an interesting paragraph. It follows;
“A primary reason for the explosion of 401(k) plans is that such plans are cheaper for employers to maintain than a defined benefit pension for every retired worker. With a 401(k) plan, instead of required pension contributions, the employer only has to pay plan administration and support costs if they elect not to match employee contributions or make profit sharing contributions. In addition, some or all of the plan administration costs can be passed on to plan participants. In years with strong profits employers can make matching or profit-sharing contributions, and reduce or eliminate them in poor years. Thus 401(k) plans create a predictable cost for employers, while the cost of defined benefit plans can vary unpredictably from year to year.”So basically this sums up the idea that the worker shouldering the entire burden for his retirement security is a great thing for Corporate America. But is that fair to us? While 401k's are, and should be, a great supplement to our retirement plans, they should not be the only tool we have. We deserve a reward after sacrificing most of our productive lives to a company. It's a shame for companies that it costs more, but in the last thirty years what have CEO and Corporate Officer pay done in general? Well we all know from reading the papers that they've skyrocketed. It's time we start reversing that trend and begin getting decently compensated for our sacrifices.
