| richardhutnik said: mrstickball, how well is the current 401K system working to insure people can retire? |
Far better than social security.
http://www.needmoneytips.com/2010/03/calculate-expected-401k-returns/
Over a 30 year period, S&P returns have provided 13% per annum, even in 2010 with us having Black Friday, the tech bubble burst of 2000, and the crash/recession of 2008.
Comparatively, Social Security earns about 2-3% per annum.
I'd say that 401k's, despite taking a beating in the past 10 years are still better than social security. Even with returns being their worst in the past 10 years, it still beats social security.
Of course, I don't believe 401k's are entirely the way to go. When I worked for the State of Ohio, they had a phenomenal program in OPERS. I earned about 6-7% per annum via their traditional pension plans, which had a very diverse portfolio. Again, that was twice what Social Security has paid anyone. Ever.
*edit* I understand that you've lost money via 401k's, and I'm very sorry to hear that. I'm not arguing that 401k's-only would be the way to go. Optimally, the system would allow pensioners to invest their money in both low-risk and high-risk activities. However, social security allows neither, as all monies earned go into US treasury bonds which return horrible rates.
Back from the dead, I'm afraid.
