401 Not O(k) -- Growing Movement To Ditch Them

After this past month we can see their point.

ABC News: Given that reality, there’s one proposal you might want to keep an eye on. A recommendation to shake up the nation’s 401(k) system is gaining traction as workers and retirees gape in horror at their investment account balances.

“Four weeks ago this plan didn’t have a chance,” conceded its author, Teresa Ghilarducci.

Suddenly, things have changed. Ghilarducci’s proposal to create what she calls Guaranteed Retirement Accounts is gaining attention in Washington as the nation grapples with the issue of retirement security in the wake of a 40-per cent-plus drop in the U.S. stock market this year.

“These last three weeks people are learning their 401(k) plans can go down,” said Ghilarducci, an economist at the New School for Social Research in New York. Her proposal calls for knocking down the 401(k) plan system and replacing it with a government-run pension plan funded by employee contributions. Participants would be guaranteed an inflation-beating return and a lifetime stream of income.

To read more on the proposal click here.



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