Social Insecurity: 401(k)s and the Retirement Crisis

Social Insecurity: 401(k)s and the Retirement Crisis

How 401(k)s have gutted retirement security, from charging exorbitant hidden fees to failing to replace the income of traditional pensions

Named one of PW's Top 10 for Business & Economics
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A retirement crisis is looming. In 2008, as the 401(k) fallout rippled across the country, horrified holders watched 25 percent of their funds evaporate overnight. Average 401(k) balances for those approaching retirement are too small to generate more than $4,000 in annual retirement income, and experts predict that nearly half of middle-class workers will be poor or near poor in retirement. But long before the recession, signs were mounting that few people would ever be able to accumulate enough wealth on their own to ensure financial security later in life. This hasnâ€™t always been the case.

Each generation of workers since the nineteenth century has had more retirement security than the previous generation. That is, until 1981, when shaky 401(k) plans began replacing traditional pensions. For the last thirty years, weâ€™ve been advised that the best way to build oneâ€™s nest egg is to heavily invest in 401(k)-type programs, even though such plans were originally designed to be a supplement to rather than the basis for retirement.

This financial experiment, promoted by neoliberals and aggressively peddled by Wall Street, has now come full circle, with tens of millions of Americans discovering that they would have been better off under traditional pension plans long since replaced. As James W. Russell explains, this do-it-yourself retirement systemâ€”in which individuals with modest incomes are expected to invest large sums of capital in order to reap the same rewards as high-end money managersâ€”isnâ€™t working.

Social Insecurity tells the story of a massive and international retirement robberyâ€”a substantial transfer of wealth from everyday workers to Wall Street financiers via tremendously costly hidden fees. Russell traces what amounts to a perfect swindle, from its ideological origins at Milton Friedmanâ€™s infamous Chicago School to its implementation in Chile under Pinochetâ€™s dictatorship and its adoption in America through Reaganomics. Enraging yet hopeful, Russell offers concrete ideas on how individuals and society can arrest this downward spiral.

From the Hardcover edition.
Country USA
Brand Beacon Press
Manufacturer Beacon Press
Binding Paperback
ItemPartNumber 3TWDDA003KDW
Color White
ReleaseDate 2015-04-07
UnitCount 1
EANs 9780807014707

Country	USA
Brand	Beacon Press
Manufacturer	Beacon Press
Binding	Paperback
ItemPartNumber	3TWDDA003KDW
Color	White
ReleaseDate	2015-04-07
UnitCount	1
EANs	9780807014707

Social Insecurity: 401(k)s and the Retirement Crisis

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