The 401(k) System: Great for Wall Street, Bad for Retirees

[JoePhilly]

12. The methodology for this "study" is highy suspect.

I placed the word "study" in quotes because that's what the article does with the word "ordinary".

It then shifts to something called an "ideal savers", again using quotes.

They then ignore the impact of employer match, although for this they at least indicate so.

They also make some rather odd assumptions about how a 2 income couple would invest in stock and bond funds.

They also ignore re-balancing of 401k assets over time.

And they appear to ignore the tax break afforded to 401k investments. Yes, this money will get taxed later, but presumably at a lower rate after one retires.

The article is correct that many people do not know about the fees associated with their funds. The same can be true of those who get a variable rate mortgage that is not capped.

Basically, the "study" appears to have been created to support the "plan" the authors advocate at the end.