The Great 401(k) Hoax: Why Your Family's Financial Security Is at Risk, and What You Can Do about It

by Anne Colamosca, Bill Wolman, William Wolman

Book Overview

According to business and finance journalists Bill Wolman and Anne Colamosca, the American public has been hoodwinked: 401(k)s, the most popular mechanism for retirement investing, were established to... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0738206350
• ISBN13: 9780738206356
• Release Date: May 2002
• Publisher: Basic Books (AZ)
• Length: 256 Pages
• Weight: 1.10 lbs.
• Dimensions: 0.9" x 6.4" x 9.3"

Customer Reviews

sobering thoughts for babyboomers

This intelligent book lays out some startling truths for babyboomers about to retire --mamany of them have only a small stake in the stockmarket because their incomes may not have been particularly high and they will only have a tiny portion of what they will need later in their lives. It's a wake-up call to reinvent themselves and work longer, find more interesting work and keep bringing in income.

You Be The Judge--Before It's Too Late For You

This book examines what the authors' contend are the many foundational weaknesses of the 401k. Informative book, but could have used more proofing and editing. As for the "K," one of the first to voice the cracks in it was Edward N. Wolf, and now others have hopped on the band-wagon. The creation, history, and current conditions are discussed. Many reasons are provided as to why Americans are bemused with this fund. Although the "traditional" pension is rapidly becoming a thing of the past, the 401k is still only a supplement to retirement--even if that's the only thing most Americans will have. It's a supplement, pure and simple. For most it'll provide some enjoyment and/or cut down on fixed-income living expenses, or maybe reduce the shock of those prescription medicine bills that are rising year after year. If people diversify the 401k supplement over domestic and international stock index funds, micro, small, medium, large cap, growth, value, and balanced funds etc., they may benefit from long-term tax-deferred compound interest. Hey, I forgot to throw additional money markets, bonds and REITs, for additional diversification. The average American doesn't have the net worth, resources, time, and life-time--to recover from such massive losses after a certain age. And, that age is quite young. For many but not all of those that did want to re-allocate, they were bound by corporate rules and regulations that hindered them from doing so--if they were a worker, and many lost years worth of potential earnings and savings. Management wasn't bound by these rules, they were free to do what they wanted, and many of them posted enormous profits from these preferential rules. The E.R.I.S.A. act in 1974 was a scheme to "empower" the "average" American to have financial control over their future. About 20 years later, the financial industry benefitted tremendously from 1990s market boom. The CFPs and brokers, brokerage houses, and investment bankers rode the wave, understandably, and successfully promoted a fantastic advertising and marketing campaign. Guru newsletters, financial magazines, traveling seminars, contradictory radio and TV pundits, and book writers did great business as well. Who benefits from the 401k? The employer does. If this wasn't the case it would never have been allowed to exist at all by Congressional legislation.

an eye opener

I have wondered for a long time why my 401(k) has not fufilled my hopes and expectations. Now I know the answer!To begin with, the book explains why most employers hand the maagement of their 401(k) plans to financial institutions that have less of a financial interest in good 401(k) mamagment than they do in performing many other finnacial services, like investment banking, for my employer.The result is that most 401k)s did not perform very well even during the the stock market boom of the 1980s and 1990s. Indeed, the book also shows that the average money manager is a looser not a winner. That losing record may be why, as Wolman and Colamosca show, many 401(k) managers send out statments that are almost impossible to understand. Money managers do everything they can, partly through deceptive advertizing, to conceal their miserable record. But the book reveals the real record for all to see.It also provides sensible advice. First that workers should get together in what are in effect 401(k) clubs to pressure the bosses to do a better job. It is a great idea that will enable people to pressure the bosses to do a better job.The book also offers sound investment advice for the difficult decade ahead.

finally, the real story!

Just consider what we read in the papers: the economy is recovering; unemployment is rising; housing starts are up; so are mortgage foreclosures; consumer confidence is improving; credit card debt has never been higher. So much conflicting information. What are we to believe? Is the economy really recovering as the administration would have us believe? For many workers the answer is No. In general, economic analysis in the media favors people who are prosperous (about 20 percent of the population.) while the fate of the vast majority -- the 80 percent -- is often overlooked. The Great 401 K Hoax judges society by what is happening to working class Americans and the news is not good. Thank God, Wolman and Colamosca are reminding Americans that the boom years are followed by lean years and the 401 K plan will not solve Americas pension fund crisis. Their advice to everyday Americans is honest, clear and prudent. Definitely worth the read.

enlightend conservative

A terrific antidote to Wall Street propaganda! This book cuts to the heart of the problem with 401(k)s and what you can do about yours. A recent (May 20) John Hancock Financial Services study shows that even relatively well-to-so Americans will only be able to retire on 50% to 60% of their salaries instead of the 75% that most experts believe is needed. Hancock blames the shortfall on investor ignorance. But the real reason is that the corporation has all the power over pensions and the average employee. virtually none. What can be done about this is a major message of the book which is full of sound practical advice.