It’s time to fix the 401(k)
The 401(k) plan can be a powerful savings tool. But for more of us to enjoy a secure retirement, we need a bigger, better idea.
A growing number of policy experts who study 401(k)s think they fall short. So why not rethink America’s retirement system from the ground up? No, it won’t be easy: We’re in an economic crisis, and lobbyists for the financial services industry will fight like tigers for the status quo. But that doesn’t make the task any less urgent. Some 78 million baby boomers are hurtling toward retirement. Their poverty, if it comes to that, will be a burden to their children and lead to calls for taxpayers to support them.
What would a better system look like? It would be universal and strike a more conservative balance of risk and return. Most of all, it would be designed for savers, not employers or money managers. Here are five principles for reform.
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