Now Time Magazine is telling us that the 401 (k) Retirement Plan was never meant to be our main retirement vehicle.
For 30 years, since it was created by Congress, the 401 (k) has been pushed on us from Human Resources Administrators and accountants… and now, with last year’s big recession starting many folks (and I’m in that bunch) lost tens of thousands of their retirement dollars and, subsequently, are not going to be retiring.
Is anyone pissed off about this? I know I am, since I lost a good third of my retirement money before I could move it to another kind of account. I’m two years away from needing it, and now it’s not there.
If you’re in the same boat I am, start by reading the Time article, Why it’s time to retire the 401 (k).
Here’s a clip:
In what must seem like a cruel joke to many, the accounts proved the most dangerous for those closest to retirement. During the market downturn, the 401(k)s of 55-to-65-year-olds lost a quarter more than those of their 35-to-45-year-old colleagues. That’s because in your early years, your 401(k)’s growth is driven mostly by contributions. You control your own destiny. But the longer you hold a 401(k), the more market-exposed it becomes. It’s a twist that breaks the most basic rule of financial planning.