- participants aren't particularly adept at investing their contributions
- account balances can get whacked hard during market setbacks
- turning one's 401(k) stash into a lifetime income is a major challenge
However, Mr. Updegrave, who is also the author of “How to Retire Rich in a Totally Changed World: Why You’re Not in Kansas Anymore,” points out that no one has a better alternative. He explains that we might be better off if companies stuck with the check-a-month pension plans that have disappeared in recent decades. Or, maybe we would do better if the government stepped in and guaranteed a retirement check on top of our Social Security. What are your thoughts on these ideas?
No matter what you think, use whatever vehicle you have to save for retirement. If all you can do is contribute to your employer sponsored 401(k)—make a date for yourself in the future and advantage of investing pre-tax dollars and gaining free money in the form of an employer match.
Lastly, Updegrave makes an important recommendation for older adults: You will want to protect your money from downturns in the stock market as you get older by shifting some assets to the less volatile assets like bonds and cash. Take the time to do it.
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