The 401(k) Crisis Is Getting Worse

[ronnie624]

25. Anything that flows from capitalism is suspect to me.

Much more relevant to a correlation between stock ownership and widening wealth inequality is the asset stripping nature of 401(k) plans – part of Wall Street’s institutionalized wealth transfer system.

On April 23, 2013, Frontline producer Martin Smith exposed the following with charts and graphs and interviews: If you work for 50 years and receive the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street. The program was titled The Retirement Gamble.

As we wrote at the time, “This is not so much a gamble as a certainty: under a 2 percent 401(k) fee structure, almost two-thirds of your working life will go toward paying obscene compensation to Wall Street; a little over one-third will benefit your family – and that’s before paying taxes on withdrawals to Uncle Sam.” (You can read our detailed dissection of the program and the math here.)

The same Wall Street banks that are enabled by Congress to asset strip 401(k)s are the very same banks that asset-stripped the equity in the little guys’ homes through illegal foreclosures and mortgage fraud and then were allowed to decide on their own how much to pay their victims.

http://wallstreetonparade.com/2014/10/wall-street-journal-wealth-inequality-is-your-own-dumb-fault/