Word: idea
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...ugly truth, though, is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves. In the past two years, that has become all too clear. From the end of 2007 to the end of March 2009, the average 401(k) balance fell 31%, according to Fidelity. The accounts have rebounded, along with the rest of the market, but that's little help for those who retired - or were forced to - during the recession. In a system in which one year's gains build on the next, the disaster of 2008 will dent...
...defenders say bad markets don't make the accounts a bad idea - and that it's still too soon to tell whether they work. Many companies adopted them less than 20 years ago. Even then, most firms (including mine) still provided pension plans to their workers. So boomers retiring now were never focused on piling money into 401(k)s. In order for the plans to succeed, workers have to stash savings regularly for about 30 years. Most accounts haven't been around that long...
...idea that we could ever save enough to pay for 30 years of leisure is a relatively recent invention. An entire profession, financial planning, is dedicated to telling people they can, and must, pay for their own retirement. A 401(k) is usually a central part of those plans. Even for people who don't have enough money to send their kids to college or buy a home, building their 401(k), they are told, is their first priority. It's not terrible advice. The accounts grow tax-free, though you have to pay Uncle Sam's levy when...
...many policy experts say some type of change to our retirement-savings system is coming. First of all, given the market carnage, there is some backing for the idea - not to mention anger and disappointment among retirees who can't really retire. Recent opinion polls show that people would be willing to give up the flexibility of a 401(k) for a guaranteed return. What's more, the fact that ERIC supports a guaranteed plan is encouraging. "Whether the 401(k) is a perfect plan or even the right plan is something that is being questioned in Congress," says Democratic...
...think that transparency helps intelligence agencies in the long run? Yes. The idea used to be that you don't want the public to know anything, so you don't tell them anything. What changed a generation ago is that the British people became less deferential, and if they're not given some idea of what's going on, they fall for conspiracy theorists. The best-selling book in the U.S. about British intelligence is, after all, Peter Wright's Spycatcher. A couple of the stories that he put in there that are complete nonsense are still widely believed: that...