The Great Retirement Ripoff – Part II

I picked up the October 31, 2005 issue of Time with “The Great Retirement Ripoff” cover. The article was terrible. It was so one-sided that it should have been titled as an editorial. The authors made no attempt to explain the situation other than to say Congress allowed everything to happen.

Of course I disagree with companies that leave their retirees high and dry. That should never happen. I think the prudent thing to do would have been to explain to the younger workers that the pensions were no longer going to be available and that they had better start utilizing their 401(k) rather than taking benefits from those who were already retired.

I’ll post more on this later.

One thought on “The Great Retirement Ripoff – Part II”

  1. Unfortunately, that will not be an answer for most people. What you have written above is essentially saying that there is no responsibility, that companies can steal pensions, and workers should lean towards 401ks. However, the average worker gets a very poor return from a 401k, and secondly the employer only contributes 4% of payroll vs. 8% of payroll. That is the main reason 401ks have taken over, because of corporate greed, regulatory abdication, and employee ignorance. A very large segment of people with 401ks will not be able to retire…ever. Secondly, the 401k is the single worst thing to happen to retirement since the inception of defined pension benefit systems were created. I have documented this extensively on my blog, and one of my sources is Brooks Hamilton, who was profiled on PBS’s Frontline. His database of the returns of 50,000 individuals is hard to refute. All the major investment companies have this same data, but refuse to share the results of any analysis of it.

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