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Is It Time to Retire the 401(k)?

The 401(k) is not working for millions of Americans. In fact, the 401(k) was originally created by Congress as a tax dodge for executives, not as the primary investment retirement vehicle for half of the country's workers.

The 401(k) is not working for millions of Americans. According to Richard Stengel, managing editor at Time Magazine, the 401(k) was originally created by Congress as a tax dodge for executives, not as the primary investment retirement vehicle for most of the country's workers. Time's article, "Why It's Time to Retire the 401(k)" explores the dangers of the primary retirement fund for about 73 million Americans. In fact, rank-and-file workers weren't even eligible for the 401(k) when it was first introduced 30 years ago. Over the past five years, workers who had a standard alignment of investments in their retirement portfolio have actually seen their savings decrease. Financial experts propose an "insurance pension plan" that reduces the risk associated with wild market swings that decimated 401(k)s over the past few years.

The 401(k) is not working for millions of Americans. In fact, the 401(k) was originally created by Congress as a tax dodge for executives, not as the primary investment retirement vehicle for half of the country's workers. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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