PLEDGE NOW
Is The 401(k) Working?

Is the 401(k) working as a retirement plan for the American public? A lot of account balances say maybe not.

Photo Illustration (Alex Kingsbury/WBUR)

Photo Illustration (Alex Kingsbury/WBUR)

Back in the day, the 401(k) – if you had one – was just a supplement to a good old-fashioned pension. An optional way to juice up your retirement. Today, for most Americans, pensions are history and the 401(k) is the main event, after Social Security. And 401(k)s are failing.

Millions of Americans are barreling toward 65-plus with very little in the sugar bowl. The stock market has tanked and tanked again and looks shaky right now. Most human nature may not be cut out for sophisticated investing. Is there a better way?

This hour, On Point: Is the 401(k) a bust? And what would be a better way?

-Tom Ashbrook

Guests

Teresa Ghilarducci, a labor economist and nationally-recognized expert in retirement security. She’s an economics professor at The New School.

David Wray,  president of the Plan Sponsor Council of America, a national, non-profit association of companies that sponsor profit sharing and 401(k) plans.

From Tom’s Reading List

The New York Times “The only thing I haven’t dealt with on my to-do checklist is retirement planning. The reason is simple: I’m not planning to retire. More accurately, I can’t retire. My 401(k) plan, which was supposed to take care of my retirement, is in tatters.”

CBS News “The state of retirement savings in America is in big trouble. According to Fidelity Investments, the average 401(k) balance among its 11.8 million accounts increased to $74,600 at the end of the first quarter 2012, a 62 percent increase since the end of the first quarter 2009. While it’s good news that balances are up, the number of accounts is alarmingly low for such an industry giant.”

Time “One of the biggest flaws in most people’s retirement plan is something that previous generations rarely worried about: monthly income guaranteed for life. But the fix is in, and before long your 401(k) may look a lot more like your dad’s pension.”

Please follow our community rules when engaging in comment discussion on this site.
ONPOINT
TODAY
May 25, 2016
This April 29, 2014, file photo, shows an Exxon sign at a Exxon gas station in Carnegie, Pa. (AP Photo/Gene J. Puskar, File)

How will the oil giants do business in the climate change future? Shareholders at Exxon, Chevron and more want to hear their plans. So do we.

May 25, 2016
Police gather in a cordoned off area where a possible murder suspect fired shots at officers surrounding a South Side home where he is barricaded Thursday, May 12, 2016, in Chicago. (AP Photo/M. Spencer Green)

Predictive policing. With violence on the rise, Chicago has turned to big data to predict gun and gang violence.

RECENT
SHOWS
May 24, 2016
Activist and author Gloria Steinem. (Carly Romeo / Courtesy Gloria Steinem)

Feminist icon Gloria Steinem explores how violence against women drives global instability in her new show, “Woman.” She’s with us.

 
May 24, 2016
U.S. President Barack Obama meets with Vietnamese Communist party secretary general Nguyen Phu Trong at the Central Office of the Communist Party of Vietnam in Hanoi, Vietnam, Monday, May 23, 2016. (AP Photo/Carolyn Kaster)

Obama’s in Vietnam and Japan. The G7, Hiroshima and his pivot to Asia are all on the table. We look at the big picture. Plus, President Obama’s visit to Hiroshima.

On Point Blog
On Point Blog
Gloria Steinem Explains Her ‘Bernie Boys’ Comment
Tuesday, May 24, 2016

Feminist activist Gloria Steinem explains why her apparent diss of female supporters of Sen. Bernie Sanders was anything but.

More »
Comment
 
‘Best Of’ 2016 Commencement Speeches
Monday, May 16, 2016

Excerpts from a few of the best commencement speeches delivered to the graduating class of 2016.

More »
Comment
 
Caller: Trump is a ‘Yankee moron,’ but I support him
Tuesday, May 10, 2016

“I’m a working man. I’ve worked 13, 14 hours every day. I got two jobs. I got three kids. I got a wife. You know, I’m not a misogynist.”

More »
Comment