3 Modest Proposals For Improving The 401(k)

January 5, 2014 | | Forbes |

Saving for retirement was once a lot easier than it is now.

Your employer offered you a pension, which guaranteed you a certain amount of income in retirement.

Now, your employer offers you a 401(k) plan -- if you’re lucky. Or maybe "lucky" isn't quite the word, considering it comes along with an obstacle course of retirement challenges: getting around to setting aside your own money, figuring out how much you need to put away, and choosing the best investments for it. Then, once you’ve reach retirement, you get burdened with another monumental task: figuring out how to turn that into enough income in retirement that you will be able to live comfortably but not so comfortably that you deplete your savings in your lifetime — an easy feat, since we all know our own expiration date, right? And if you don’t do all that correctly, then tough luck. [...]

3. Safeguard Against Predatory 401(k)s

Bad investment options, high fees and bad advice are the next big problems she sees, costing a median-income, two-earner family $155,000 in fees and lost returns, according to The Retirement Savings Drain, an investigation into the hidden fees of 401(k)s by Robert Hiltonsmith. To address those, she proposes that fund managers be fiduciaries who are required to act in the best financial interest of their clients, and won’t make a commission from selling them specific investments. “Don’t have investments mixed up with a [fund manager’s] profit motive,” she says.