How 401(k)s are failing millions of Americans

More than half of U.S. workers have no retirement plan at all. And even those who do have a 401(k) typically don't have enough money to retire comfortably

Nest egg
(Image credit: Jamie Grill/Tetra Images/Corbis)

What's the case against 401(k)s?

They're failing to provide enough money for older Americans. As the country's principal way to save for retirement, the 401(k) program allows employees to set aside a portion of their paychecks, often supplemented with matching funds from their employers, and to defer taxes until they start withdrawing funds. But most of the nearly 80 million baby boomers — the oldest of whom are just now starting to turn 65 — haven't put aside nearly enough, and are in danger of exhausting their savings within a few years of retirement. "It has already become clear," said Karen Friedman, of the Pension Rights Center in Washington, D.C., "that 401(k)s have failed millions of Americans."

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