Marie Cocco: Retirees Wake Up to a Swindle

[marmar]

from Truthdig:



Retirees Wake Up to a Swindle

Posted on Oct 13, 2008
By Marie Cocco



The essential fallacy of the 401(k) has been exposed.

It took a historic market collapse—one that threatens to impoverish workers already in retirement and those who are nearing it. But then, crushing hardship is often what’s required to usher out an era of ideological illogic and unconscionable greed.

The advent of the 401(k) in the late 1970s and early 1980s was a leading indicator of what became a political mania for shifting the risk and responsibility for life’s big challenges—health care, an adequate income in retirement—from employers and other broad-shouldered institutions to the narrower, weaker backs of individuals themselves.

It was never sold this way, of course. The pitch for the 401(k) was a contemporary version of the get-rich-quick scheme: The promise of strolling along a sun-dappled beach in retirement would be realized with ease, so long as workers regularly contributed modest amounts to the accounts, then let the compounding magic of the market work. To hear the mutual fund companies and the media tell it, only fuddy-duddies and dinosaur employers would be foolish enough to opt for the old-fashioned defined-benefit pension, the type employers paid for and professional managers oversaw, and which guaranteed monthly payments in old age. The type that gave the hard-boiled men and women of the industrial age security, but would never reward them with riches.

The offer seemed good to media observers, and to the politicians who nurtured the do-it-yourself retirement with successive legislative schemes. During the stock market boom of the 1990s, esteemed business publications published breathless articles featuring manufacturing workers who would use their lunch breaks to track their mutual fund balances and ponder the possibilities of the loan they would take out for a cabin on the lake or an anniversary trip to Hawaii.

But despite the hype, the data on 401(k)s have never—ever—shown that these accounts were creating a mass of workers who would be able to retire with security, let alone luxury. ......(more)

The complete piece is at: http://www.truthdig.com/report/item/20081013_retirees_wake_up_to_a_swindle

[amdezurik]

1. I never bought that line

as soon as i found out that after puring my money into them i had no control on how it was used i would only put in what the company forced me to, if any.

[quidam56]

2. The Cheney Administration has destroyed America...

http://www.wisecountyissues.com