Can You Afford To Retire?

While fiddling with my new HDTV tuner the other night, I came across a Frontline program on PBS discussing the journey of the 401(k) program from “an arcane sub-paragraph in the U.S. tax code” to the retirement tool of choice. Most folks who work in the IT industry already have a 401(k) plan and after the announcement by Verizon Communications that it plans to switch from a guaranteed pension plan to a 401(k) plan, it appears that the defined pension benefit plan is going the way of the dodo bird. The program was absolutely rivetting and if you want to check it out, it is available for online viewing here.

One Comment

  1. AF
    June 1, 2006 at 12:00 am

    I watched this on PBS and was entranced. Below are the time of some of the parts I really liked. Just a month or so before I was talking with a colleague and said that I do not think the 401K numbers work out for me. Below are directions to some of the best sections By the Part and a time in minutes and seconds. If you watch nothing else check out “Who should manage your retirement” and “Pension VS. 401K Defined Contribution”.

    Who should manage your retirement?
    Part 3: 14:30 ‘ ask CEO about letting the water boy manage the corporate retirement account’
    Part 3: 2:20 (how a 401k works)

    Pension VS. 401K Defined Contribution.
    Part 4: 6:00 Nebraska after 40 years decides that Defined Contribution is out…
    Part 4: 7:00 Study on Pension vs. 401K
    Part 4: 8:00 Nebraska vs. Corporate America.
    Part 4: 9:00 How Corporate America wants retirement to work
    Part 4: 9:25 Back to a Pension except the Employees take on all the liability.

    Why do higher earners get better Returns?
    Part 3: 7:25 “… Bottom 20% earners get 4% return Top 20% earners gets 30% Return… Yield Disparity…”
    Part 3: 3:55 (the way to do it)
    Part 3: 4:46 (the way not to do it)

    What is the status of retirement plans in US:
    Part 3: 9:30 “50% do not have retirements… Average Families Account balance is $29,000…”

    How much do you need to retire?
    Part 3: 10:50 saving rates for the boomers and life expectancy.
    Part 3: 12:20 “… Need 15-18% of pay put away for retirement…”
    Part 3: 14:00 ‘401K leakage’

    Shift in where the pay comes from Part 4: 2:55

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