Monday, April 20, 2009
60 Minutes: older workers might not get to retire
Today's post was supposed to be an update on Bobby and Aleks' house hunt but I get so many questions about 401(k) plans that I had to post about last night's episode of 60 Minutes. They looked at the devastating impact a tough economy has had on many people's retirement investments and gave a good history on 401(k)s and how they came to be so prevalent. It was sobering: many people in their 50s are finding out that they aren't going to be able to retire when they wanted to, or at all, because their portfolios have lost tens or even hundreds of thousands of dollars in value. What was also angering was the discussion of how 401(k)s were intended to be part of a "three-legged stool" of retirement finance that also included pensions and social security. But greedy companies have all but eliminated pensions and the government can't pay for social security for too much longer, what with all the wars it has to finance and the bank bailouts that are more important than your retirement.
Definitely watch the video, but keep a couple things in mind: before you get ready to pull out of your 401(k), remember that your situation is probably very different from the people depicted. People over 50 should definitely have lessened their exposure to losses by moving most of their investments over to bonds and cash, not the stocks that have taken such a beating. And if you're in your 20s, 30s or even early 40s, you still have time to make up what you lost over the past 18 months.