Lost Retirement Horizon: Why 401(k)s Are Not OK (and Not Just Because of the Lousy Economy)
By John F. Wasik, RealClearInvestigations
November 15, 2022
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Fretting over your 401(k) lately? For all the current turbulence in these retirement plans – from their rocky recent market performance to asset managers’ politicization of their investments through the “environment, social and governance” agenda – the main problem lies in their flawed design decades ago, a range of retirement experts say.
They say many retirees – particularly the less well-off – are losing out because the tax-advantaged accounts favor the well-compensated who are better able to save; also, because of the plans’ temptingly relaxed borrowing rules, typically high fees, complexity, and a presumption of investing competence on the part of ordinary workers.
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Let’s not overlook the fact that “social security”, in addition to being a racist wealth transfer program from poor minority men to rich white women, is un- or at least very under-funded. It seems unlikely that, at even the best rate of inflation of 2%, the “benefits” payment will be in “shrunken purchasing power’. In the case of “social security”, it’s likely to be reformulated as a “welfare” program with all sorts of income limits and regulations. The “golden rule” (i.e., he who has the gold makes the rules” means that the Gooferment will be making the rules. When the “can” (i.e., deficit, debt, interest expense) can no longer “be kicked down the road”, then Joe-SixPack will suffer. If I was young, I’d store my “wealth” in things the Gooferment can’t tax (i.e., precious metals in my backyard) or touch (i.e., all pensions, IRAs, and 401Ks are seized in exchange for “enhanced” social security “benefits”). It can happen here (i.e., FDR’s gold recall). Argh!