Your Sorry 401k The State of the Baby Boomer Generation's Retirement For at least a generation most major businesses offered a company managed pension plan which supported our parents nicely in their post-retirement years.  Why,  they never had to give a thought as to how they were going to manage upon retirement.  There would be a check coming in for the rest of their lives which would guarantee that they could maintain an adequate, albeit thrifty lifestyle.   They had to do no planning or devise any strategies to ensure their futures.  There was an unwritten contract which stated that they put their time in on the job and upon reaching whatever retirement age or tenure that the plan dictated, they would immediately and unquestionably receive that income.   My dad never gave a thought to his financial future once he retired at the minimum age of 55.  He received a lump sum payment of $100,000.00 plus a monthly check of around $1700.00 which to this day (he passed on in 1995) is still being provided to my mom even though she has remarried to a man with income from a similar pension plan.  My dad was no CEO with a "golden parachute" either.  He was  a night shift supervisor in the publishing department at the United Nations. This is exactly how the loyal American worker should be treated in a fair society.  Those were the good days. This generation faces a different scenario.  For most workers, no company sponsored pension plan is offered.  Instead, we are told to take up to 15% of our weekly pay,  place it in various stock and bond funds and told "Good luck, we hope the market works in your favor over the course of your career, hope you picked from the better performing funds".  Of course, as every prospectus states, "past performance is no guarantee of  future performance".  Your employer at their discretion may match some of those funds you contribute, normally at a paltry rate between 1 & 4%. Most workers cannot put aside the maximum allowable amount in their 401k plans if they  even can participate at all.  In fact, if one is raising a family and needs a little extra money to provide the best lifestyle for their families, the easiest way to generate a little more take home pay is to cut the percentage they are contributing to that 401k plan.  How sad! Even if we do contribute a healthy amount to our 401k plan, it appears that for those of us in our 30's to 50's, we need to have socked away enough to grow to 1,000,000.00 - 2,500,000.00 over our careers to generate a modest income once we decide to retire (at older and older ages).  Assuming the  best we can do with those 401k proceeds once we retire is 4% in a conservative investment, that may or may not mean a hill of beans depending on what inflation rates are during our retirement years.  Besides, few of us have socked away enough to produce a sufficient yield to build to those numbers! We are the first generation being asked to rely on this shaky method of sustenance in our old ages.  I question whether anyone has had the opportunity to retire entirely based on funds contributed to a 401k plan.  The 401 concept hasn't been around long enough for one to have paid into it for an entire working career.  One can't help but cynically think that this is a social experiment designed to help big business generate greater returns and profits for the benefit of owners and top management at the expense of the workers below that level. We're not skilled investors, but we are expected to take a hefty percentage out of OUR OWN paychecks to finance our retirements by taking our chances in the stock market.  Even skilled investors fare about as well as they might in Atlantic City depending on business trends that no one can predict. I read perky nonsense from financial organizations that claim we are living longer and are generally in healthier shape than previous generations.  We'll have the opportunity to augment our 401k returns with part time jobs in the ever-booming service industries.  In other words, while earlier generations walked away from work for life somewhere between 55 and 65 years of age, we are being asked to cashier at Wal-Mart or some similar exploitative retailer in our "golden years" competing against each other to prove our work-worthiness to 23 year old managers.  We are being fed nonsense by our employers, financial planners and our government and are too tied up in holding onto our current employment before it is "outsourced" to a third world country to adequately contemplate our financial futures.  All but a few lucky ones among us, that is. In fact, at Wal-Mart, et al, not only will we seniors be competing against each other for employment in our old age. We will also face similar competition from the pre-teen girls working seven 16 hour days a week to keep from starving in 3rd. world countries as they toil for American corporations.  Companies  find such grossly underpaid labor sources far more convenient and compliant than Americans reasonably educated about what is right and proper in a market driven society. As long as this keeps the millionaires and billionaires comfortably living  in the styles to which they have become accustomed, then to hell with the American people at large.   We are lemmings being driven toward a "Grapes of Wrath" future where the work masters will only keep on the fittest and most desperate workers as we fight among each other for crumbs to maintain our modest housing and nutritional needs. In summation, this 401k program is a sick joke, designed to maximize profits for owners and stockholders at the life and death expense of an aging generation.  American workers  are a bunch of fools blindly accepting colorful brochures provided quarterly by our employers wishing us good luck as we either sink or swim in bull/bear markets.  Instead of a right to participate in this market economy, we are supposed to consider ourselves blessed that we are even able to maintain employment and stay a couple of paychecks away from the homeless shelter.  What a sad society this has become.  While the very real issues of American corporations moving jobs overseas to impoverished nations with willing slaves and no safety net for workers who lose their jobs, our state representatives debate the benefits of gay marriage and whether an American should be able to buy medicine more cheaply in Canada.  How have we let ourselves become so apathetic about our futures?  How have we let benefits enjoyed by the last few generations become slowly eroded year after year without complaint?  Our employers continually hold the specter of having no choice but to move their operations to somewhere overseas where millions or perhaps billions of slaves with far less say in their lives than we have are just waiting to take our jobs.  They must "cut costs" to stay in business, they tell us as health plans become either more expensive or non-existent and  hours become increased without increases in compensation when what they really mean is this is the best way to maximize their own profits and continue lifestyles of obscene consumption.  As Americans fight for survival, we are coming to resent the unfair competition from poor third world nations that the last generation was able to afford sympathy and charity towards. Again, we continue to fall for these lies without question out of utter fear of losing what little we have.  More to come..... 11/2003

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