Did the 401k mark the end of 鈥楪olden Years鈥?for most Americans?

Is the transfer of responsibility (risk) from our 鈥榖enevolent鈥?corporate masters to individuals, known as the 鈥?01k鈥? serving us well?





Before the 1950s it was something only the wealthy could afford to do. Everyone else needed an income, and most folks struggled to get by in the industrial economy as their faculties deteriorated. Then came 鈥楻etirement鈥?for the masses.





The social reformist dream became reality with the 1935 Social Security Act, the spread of the corporate defined benefit pension plan and Medicare in 1965. For most workers the last stage of life became a time of leisure, recreation and enjoyment. Is that now disappearing?





The Age of Retirement was one of America's most successful social reforms ever. But that era seems to be over. A new vision of old age is emerging from the trauma of the credit crunch and the Great Recession: Forget retirement. Keep working. The key question is no longer "How early can I retire?" For many it has become "How can I retire?"





Of course, like all tectonic social and economic shifts, the trend isn't new. It has been building for the past three decades with the move away from traditional pensions, with their involuntary contributions and steady payout, in trade for 401k-type plans, with their voluntary contributions and uncertain returns.





For workers nearing their retirement years, the median balance on 401k's and IRAs combined - a mere $78,000 in 2007. And the stock market reached its all-time peak that year! But the Great Recession has devastated portfolios since then, a stark reminder to millions of near-retirees that they haven't saved enough to fund a good retirement. For many, Social Security has now become the prime, rather than supplemental, source of retirement income.





Indeed, taking into account the declines in financial assets and housing, the National Retirement Risk Index as of mid-2009 signals that 51% of households are at risk at age 65 of not having enough retirement income to maintain their pre-retirement standard of living. That's up from 44% in 2007 and 43% in 2004, according to the index's creator, the Center for Retirement Research at Boston College.





Yet companies are far from eager to fill their ranks with an aging workforce. Combine that with a contention for resources (jobs) from the younger, more educated, more 鈥榚nergetic鈥?members of society and a stage is set for some 鈥榠nteresting鈥?conflicts/experiments in our social evolution. This will also introduce some 鈥榙ramatic skewing鈥?in market demographics, especially for some industries.





The same energy and marketing savvy that created mass tourism and leisure will need to be expanded on building satisfying careers and job opportunities for a highly experienced but graying and less robust work force. For workers burning the midnight oil in a tough economy - they're bone tired from working. Health problems are wearing them down. And, as the astute social commentator H.L. Mencken noted back in 1922, occupation matters:





If he got no reward whatever, the artist would go on working just the same; his actual reward, in fact, is often so little that he almost starves. But suppose a garment worker got nothing for his labor: Would he go on working just the same? Can one imagine his submitting voluntarily to hardship and sore want that he might express his soul in 200 more pairs of ladies' pants?





The transition to the new world of the older worker brought about by the 401k in lieu of the corporate retirement plans our parents enjoyed, will be difficult. But Americans can afford to grow old. They will grow old gracefully - and on the job.





So, how鈥檚 that 401k working for ya? As good as Pop鈥檚 corporate funded retirement 鈥?or not? Interested in opinions. In any event, it sure is cheaper for our rich benefactors. That much would appear to be clear. The greatest game ever 鈥?and it sold/sells itself? Not hard to sell choice, and profitable if you set it up right?|||Wow, finally a well thought out argument against one of the pillars of our economy. I will start by mentioning a few companies, Bethlehem Steel, United Airlines, Pan Am, and Lucent. What do these companies have in common? They are either not in existence, filed bankruptcy or are on bankruptcy watch because of Defined Benefit Plans. Even the government got rid of the Defined Benefit plan they had for their employees because of the cost, they have gone to a 401K like plan called the TSP.





The problem with the 401k is that they don't allow for large enough contributions and people do not fund them enough. Furthermore, most people do not take enough risk in their plans leading to returns that don't outpace inflation. The problem with our father's Defined Benefit Plan is that it destroys the companies that offer it. This will ultimately wreck the economy.





The 401k has not marked the end of 鈥楪olden Years鈥?for most Americans. I think it is one of the greatest innovations of the last century. Since when is taking responsibility for your own retirement a bad thing. The days of being taking care of are over. Used properly the 401K is better than any Defined Benefit Plan and it is cheaper.|||No doubt...the switch from guaranteed "pensions" to 401(k)s was essentially the destruction of what was once a retirement that could sustain your lifestyle Now, you have to hope the market doesn't short-sell and steal your profits by the time you retire....|||It's definitely hurt those who were expecting to have a comfortable retirement.


Thank God Bush's idea of allowing people to invest their social security funds into the stock market was not passed.|||slaves cannot retire. they work until they are useless, then they are disposed of,.











do americans really think they arent slaves?|||Next time boil your question down. Most of us do not have time for a book report.|||As the longevity of Americans lengthened it became obvious that Social Security would not be enough to compensate people in their retirement. The IRA and 401K programs are designed for people to save for their own retirement tax-free until withdrawal. Now there is a ROTH IRA option. Anyone who relies on the government for their retirement isn't being prudent.