Despite only being 35 years old, it might be time to retire the 401(k).
The 401(k) started out as a tax loop hole to supplement workers' savings and has grown to become Americans’ main retirement savings tool. But many baby boomers are finding their retirement in tatters and aren’t able to leave the workforce due to grossly inadequate savings.
“These accounts were never meant to serve as the primary retirement savings tool,” says Robert Hiltonsmith, policy analyst Demos. “They were created as a vehicle for high earners to supplement their other retirement benefits. But through lobbying, shifts in the labor market and job trends they became the primary savings vehicle without a national conversation.