Interesting questions, James. My retirement was a TIAA account for many years before I rolled it over into an IRA after leaving academe. I don't know enough to tell the difference between the standard recommendations that TIAA advisors were using and the methods my financial advisors apply now. But it seems to be high risk high growth early, then tapering off to more secure investments near the end.
My sense is that the average American is OK with being responsible with their own 401K, or paying a professional to manage it (for a relatively low annual sum). The question of Social Security is a more urgent one. For many years I naively thought that everyone got more or less the same SOC income. How could it be a safety net otherwise? I've more recently learned that homemakers have a laughably low SOC income, suggesting that they are overwhelmingly reliant on a spouse. As someone who quit my job and then got divorced later, this seems pretty messed up. Any spouse who sacrifices for their partner's career thus forfeits financial advantages for a lifetime.
So I would argue that making Social Security actually a safety net and not allowing it to reflect or magnify existing disparities between men and women and the wealthy and working class would be far more urgent than some kind of policy about the 401K.
Love this one. It’s a bit of a trap for sure—but few of us entrepreneurs even had the luxury of a 401K—so I guess a little bit (or a lot) of forced savings isn’t a bad thing. People need to learn new ways to care for themselves. Adapt and grow—or die broke.
The excellent points you make here are precisely the reason that basic common sense principles (and the math) of saving and investing should be taught, or at the very least, introduced in all high school curriculums.
Living comfortably in retirement has turned into a game of survival of the fittest.
Interesting questions, James. My retirement was a TIAA account for many years before I rolled it over into an IRA after leaving academe. I don't know enough to tell the difference between the standard recommendations that TIAA advisors were using and the methods my financial advisors apply now. But it seems to be high risk high growth early, then tapering off to more secure investments near the end.
My sense is that the average American is OK with being responsible with their own 401K, or paying a professional to manage it (for a relatively low annual sum). The question of Social Security is a more urgent one. For many years I naively thought that everyone got more or less the same SOC income. How could it be a safety net otherwise? I've more recently learned that homemakers have a laughably low SOC income, suggesting that they are overwhelmingly reliant on a spouse. As someone who quit my job and then got divorced later, this seems pretty messed up. Any spouse who sacrifices for their partner's career thus forfeits financial advantages for a lifetime.
So I would argue that making Social Security actually a safety net and not allowing it to reflect or magnify existing disparities between men and women and the wealthy and working class would be far more urgent than some kind of policy about the 401K.
I agree…401K plans are the smoke and mirrors that detract middle class people from this bigger problem.
Love this one. It’s a bit of a trap for sure—but few of us entrepreneurs even had the luxury of a 401K—so I guess a little bit (or a lot) of forced savings isn’t a bad thing. People need to learn new ways to care for themselves. Adapt and grow—or die broke.
The excellent points you make here are precisely the reason that basic common sense principles (and the math) of saving and investing should be taught, or at the very least, introduced in all high school curriculums.
Living comfortably in retirement has turned into a game of survival of the fittest.
Even better…use the schools to more or less start investing and saving with real accounts..make it a practicum…