The Worst Retirement Savings Ideas Ever
An online report about retirement issues included the statement from one participant that 401(k) plans and IRAs were the worst ideas ever. Why? Because they are voluntary and it’s easy to put off contributing to them. The result, obviously, is too little saved for retirement. In an earlier era, which featured more defined benefit pension plans, employees were often, in effect, forced to save for retirement, which was in the form of a monthly check at retirement. The other problem with these plans is that the investment of these funds is left to the individual, usually someone who is not an investment expert. Again, in the earlier era, investments of pension plans were managed by investment professionals. The so-called freedom given to 401(k) and IRA participants to manage their own futures just resulted, in too many cases, in poor investment results that then resulted in inadequate retirement income. As the individual who spoke suggested, if the pipes in your home burst, would you call a plumber or try to fix them yourself?