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This article brings out a number of very valid points. The Defined Benefit system didn't go away because it wasn't a sound system. It went away solely because of governmental intervention with legislation such as ERISA and AFFIRMATIVE ACTION. Legislation not only increased the costs of administration, but it also added a great deal of volatility to the stability of employment.
For employers, DB plans administration and funding became unaffordable as investment returns became far less predictable. For employees, employment volatility generally meant that they didn't have enough single employer seniority to gain any benefit from DB plans.
The result is that more employees work for small firm employers than ever before. Most of these small employers were forced to start their business as the larger firms they worked for terminated their positions during the economic downturns over the past 30 years.
The present system is confusing for employees and a real challenge for their advisors. The more money that is printed by the U.S. Treasury, the more the money we have in our pockets is devalued. Some investments will retain their value better than others, but the uncertainty of our situation (which Congress apparently is determined to ignore) adds additional market volatility.
Given our present economic environment, even professional advisors cannot say with ANY degree of certainty how much we will need for retirement tomorrow. At best, we can only say what is needed for the present.
However, one thing is certain. We must save and invest or we will have nothing! The question now is... 'What should we invest in?' and 'How much liquidity do we require.' Some investments, unlike currencies, are always worth 'something'. Governmental forces though, are legislatively seeking every venue they can to 'seize' whatever 'property' the citizenry has that is of any value.
Put your money in mason jars and bury it in the back yard.You will be better off in the long run.
Never trust other people to handle your money.People see a chance to take it and they will. As a matter of fact ,they already have.And will continue.It ls greed ,you know.Take a look at the guy above this article.He looks like he is a member of the 401 k. WHY DOES HE LOOK LIKE HE IS GOING TO CRY??????????Greedy system has took him for a ride.
I do believe companies should increase their matching contributions. Since many do not want the liability of a pension, a 401-K makes book keeping easier and cleaner.
Maybe if the government would pass a law to remove any liability to companies that talk about the investments available in their 401-K's the companies would feel more obligated to help people invest better.
My wife and I have a nice 401-K amount and have been taking money out monthly to be added to our social security and we have a comfortable life style.
It can be done, but you will not be able to have all the vacations and toys you want all your life.
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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
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