Has the 401(k) retirement system failed?

Has the 401k system failed us?

It’s been over 30 years since the 401(k) retirement system went into effect in 1978. Now it is the most prevalent form of retirement saving. However, the 401(k) plan is not working out for many because Americans near retirement age have very little retirement saving. Of Americans near retirement age in 2010, 75% had less than $30,000 in their retirement account. (US Census Bureau’s Survey of Income and Program Participation.) Many retirees will be relying solely on Social Security benefit and that’s not enough for a comfortable retirement. So has the 401(k) retirement system failed? Teresa Ghilarducci thinks so and […]

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Ask the Readers: How to Balance Debt and Retirement Saving?


The following article is from Melanie, our staff writer. Melanie is in the beginning phase of her journey to Financial Freedom and she’ll offer a refreshing point of view for us. As Joe has mentioned, I’m at the beginning stage of my financial independence journey. The thing I love about writing for Retire By 40 is the wealth of knowledge the commentors possess. You guys are an engaged and intelligent crowd! Today, I’d like to put you in charge and ask for your advice. What would you do in my situation? Some background… As you may or may not know, I […]

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Save for Retirement First or Children’s Education?

save for retirement first or college

Last week, my brother forwarded me this article from the NY Times – Save for Retirement First, the Children’s Education Second. The financial planners advise that it is crucial to save for retirement before contributing to your children’s higher education. Your children have more options for education than you have for retirement. They can get loans, scholarships, financial aid, attend a community college first, or maybe just not go to college at all. I’m sure it’s smarter to fund your retirement first and your children’s education second, but I’m one of those people that financial planners butt heads with. Currently, […]

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Why use the 529 plans to save for college

Why we are using the 529 plan to save for college pros cons

Here is a scary statistic – The class of 2013 graduated with an average of $35,200 in college related debt. OK, that’s a bit better than I thought. I have heard even worse stories of kids who owe much more than that and are unemployed. My brother owed over $100,000 when he graduated and it’s hard to get going when you start out in a hole. (He’s a doctor though so I’m sure he’s doing fine.) My parents paid for my college education and we really want to do the same for RB40 Jr. That will be our legacy to […]

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