Dear FRONTLINE,
Another great insight...thank you for sharing.
Retirement? What is it? In life, if you are really enjoying what you are doing - why retire from it? By the grace of God, I hope that I am able to do what I enjoy everyday (what some people might call 'work') until I die.
However, I recognize that things could happen that might not allow me to continue what I enjoy. For that reason, I need to insure that my family is taken care of. Thus, what are the various vehicles that would insure us? Our government provides us with a variety of pre-tax programs. The 401k is a good vehicle to save dollars - pretax.
In closing, our forefathers gave us an opportunity to pursue happiness. If we in fact are pursuing happiness, why would we retire from it?
Lou Schendl
Peoria, IL
Dear FRONTLINE,
I am 23 y/o and I am taking full advantage of my youth. I remember my Social Studies instructor told me to save for myself first. I am so glad that I started doing that espically after watching this program. I grew up poor and I do not want to die poor. It's amazing that people work so long and have so little to show for it. The Generation Y will have to start to take advantage of our youth or else we will be in a worse situation than the Baby Boomers, at least they have Social Security
Olivia Young
Columbus, OH
Dear FRONTLINE,
Good show, but why does united pension plan not receive stock in the new united company as any debtor would, the company was not liquided. And I think most people are expecting 14% returns from the stock market like in the 1990s, maybe that's why they do not save enough.
Bill Rios
ny, ny
Dear FRONTLINE,
It's a disgrace that the legislative framework designed in the early 70's to regulate defined benefit plans remains the primary governing regulation for defined contribution plans four decades later. Employers need safe harbor provisions under ERISA for automatic enrollment, contribution escalation, diversified default investments and provisions for unbiased and cost effective investment advice to maximize employees opportunity to grow adequate retirement resources through their working years.
Tim Burns
West Hartford, CT
Dear FRONTLINE,
I'm 52 years old and my husband is 48. We both worked for Western Electric / AT&T / Lucent Technologies / Celestica. We both were there for... years. Celestica, which is a Canadian company, bought and dismantled the company and sent it to Mexico, and Canada.
We did not participate in the 401k, we did participate in the stock ownership plan where the company offered a plan to buy at a discounted rate. When we were buying the stock Lucent stock was worth as much as $80.00 a share, now a days its worth about $2.00 a share. We did liquidate before it dropped to terribly bad. We saw the end coming and used the money to pay off debt.
Over the years we watched helplessly while the company made changes and tryed to transform itself.
When Rich McGinn became CEO that was the beginning of the end.The only difference between Rich McGinn and the executives at Enron, is that Rich McGinn spoke up and confessed mismanagement.He got off scott free. He should be sharing a jail cell with the Enron bunch.
We were lucky enough to be able to draw a pension, between the 2 of us we draw $2400.00 a month. There are no cost of living raises in sight for us. With the cost of gas, we plan our trips to town. We stay at home alot.
We have worked little odd jobs here and there, nothing steady.
I have tryed working in a salon as an esthetician, and couldn't afford the rent for my space and had to leave.
I have gone to several interviews over the past few years, but nothing has ever came of it.
I'm only 52, I would love to work again, I'm computer literate, and I have electronics training; my long term plans were to retire and start a new career. I looked forward to it, I was happy about it.
My husband watched while my enthusiasm turned into frustration; when I would apply for jobs and I new I had the right qualifications to get the job. Time and again, I'd sit across the table from someone young enough to be my son or daughterand they would tell me "I'm sorry your qualifications do not fit our criteria".
Just a glorified way of getting around the age discrimination law. I new better, I was a shoe in for a couple of these positions. Just a glorified was of covering up "you are too old".
My husband saw all the frustration I was going through and didn't want to suffer the same consequences.
Between my husband and I we used to make $160,000.00 a year.
I cry when I think about being poverty level in a few years. I want to work, but no one will hire me.
I don't deserve this. I'm still a productive individual.
Catherine Modena
OKLAHOMA CITY, Oklahoma
Dear FRONTLINE,
Dear Frontline:
First I want to commend you all for bringing this most important issue to light for us American workers, the backbone of this great nation.
As one of the first Generation X'ers (born January 1965), I never experienced the comfort and security of having a pension plan in my professional working career.
I only started putting away towards my own 401K plan in my mid thirties, only to see its value drop by 40% over the past five years.
This costly experience has left me with little faith in our 401K system as it stands today. There are just too many variables and decision to make when it comes to choosing the correct investment plan.
My only solace is that I have twenty plus years before my retirement to hopefully make up for my past investment mistakes.
Let's hear it for Reganomics!
North Plainfield , New Jersey
Dear FRONTLINE,
A good portion of the story seemed devoted to scare tactics. In his interview, Brooks Hamilton "uncovered" what he called a yield disparity (low income workers had a lower yield on thier 401(k) accounts when compared to higher income workers). The insinuation was that there was something sinister going on. What were the details? None were given. What can be done about it? No possible explanation or solution was offered. Alicia Munnell implies that you must have a super intellect to invest successfully, and that it is beyond the grasp of "normal" middle class folks. Nothing could be further from the truth. People should just invest regularly in low cost index funds, and DO NOT TOUCH OR WORRY ABOUT THE REST. You should do your viewers a real service and produce a show about intelligent investing for the future to give them a fighting chance at success rather than trying to scare them about an impending doom with no solutions offered to address it.
Dan Murray
Coraopolis, PA
Dear FRONTLINE,
As a professional financial advisor for 30 years, one mistake is easy to see. The media does a terrible job of telling people they can do it all themselves and the cheapest way is the best. The result is they make every uneducated mistake over and over and they look for the lowest cost route everytime. Think about that for a moment -- how successful would you be if you had a law suit and selected the cheapest lawyer? How about if when you had a health problem, you selected the cheapest doctor and read a magazine article for your advice? This is exactly what the media has told them is the best route.
In listening to tonight's program, it is interesting that the lowest paid employess get the lowest return and the highest paid employees get "5-10" time the return. The higher paid employees understand that as a general statement, you get better results when you pay a professional advisor to help you.
There are always exceptions. But from what I see every day in individual's retirement plan, the do-it-yourselfers destroy them selves.
Victor Connor
Lake Worth, FL
Dear FRONTLINE,
No wonder you couldn't get certain players to appear on the show; it was a simplistic hatchet job. You attacked the bankrupcy attorneys and bankers about their preferred lender protection, but if they aren't incented to help, everyone loses! Also, you never explored personal responsibilty in the problem: insufficient savings, negligent 401K allocations and weighting in company stock, and union complicity (remember the union was on the United board). Unfortunately, Frontline frequently avoids the more difficult task of objectively exercising all the aspects of complex issues.
Richmond Taylor
Travelers, SC
Dear FRONTLINE,
I have been in the financial services industry for over 22 years. What Americans need to understand now, before it is too late to fix the catastrophy is that THEY MUST PAY THEMSELVES FIRST PERIOD! No longer can you depend on someone else taking care of you financially.
Every paycheck they get no matter how small, they MUST set aside at least 10% for retirement savings, and then plan their budget without that money. Just get it through your head that you did not get that money to spend now.
It is amazing, how people will make it a priority to save for that vacation, or that Christmas gift, yet they neglect to fund the most important gift of financial security that they will need the most in their golden years.
In every high school and college, students must be taught how to be financially saavy, understand the basic principles of investing and compounding effect on cumulative returns, and how to manage a budget with discipline, so they don't make the mistakes their parents made.
It is amazing how many intelligent people do not join a 401(k) plan with an employer match, basically leaving the "free" money on the table. Yet the same people will go store to store to save on a bargain, far less than what they just threw away!
Do you really want to live hand to mouth in the richest nation on earth! Will that nation be rich or really poor??
Roger Sircar
Agawam, MA
Dear FRONTLINE,
I work for an administrator of 401(k) retirement plans. I have spoken to or seen evidence of thousands of workers who do not understand what is at stake with regard to what having a 401(k) account means. Participants do not understand they are at risk, they do not understand the terms of their plans, they do not understand the tax ramifications of cashing out of their plans, and they do not understand that there is no other available safety net if Social Security fails them. These people will not starve quietly when they do retire. Something must change to avert a looming crisis.
Portland, ME
Dear FRONTLINE,
Given the fact that 20-30% of workers don't even contribute to their 401(K)'s it seems wise that legislation should be passed to make these opt-out programs instead of opt-in. Right now, people have to do extra work to see benefits from the plan. Instead, they should have to do extra work to not see benefits.
Other countries like Canada have a more sensibly structured system for individual retirement savings. Many US employers do not offer 401(K)'s, leaving their employees on the hook for income tax payments for everything above the $4000 they can contribute annually to an IRA. Canadian citizens can choose to contribute up to 10% of their annual income in a tax deferred individual retirement account, leaving their citizenship less vulnerable to the policies of their employers and their limited set of investment vehicles when they do offer a plan.
Distressed companies offer a bounty to a privilaged group of legal and investment professionals that verges on an oligopoly. Competition for the rights to participate in restructurings is fierce, however fees obtained from these arrangements are nowhere near price competitive.
More about this situation can be learned from the thoughtful writings of Martin Whitman:http://www.thirdavenuefunds.com/taf/documents/shareholderletters/aboutus-letters-05Q4.pdf
More about how people inevitably act against their own economic interest can be read here:http://www.harvardmagazine.com/on-line/030640.html
Behavioral Finance
Bronx, NY
Dear FRONTLINE,
"It's the end of retirement." Of course, why the surprise?
I'm a 63 y/o working dentist and a 36 year resident of Florida. None of my forefathers retired. My father was a physician, my grandfathers owned their business'. Some time ago it became obvious (to me) that America's retirees are grossly overpaid. "The Greatest Generation" looted their companies, their country and their children. By voting ourselves huge benefits in the Boardrooms, the Unions and in Legislatures Americans steal from the future. And ironically we must now live in that future. The economic reality is that mass retirement doesn't work. Retirement is for the infirm. It cannot be used as an extended second childhood. But there is a consolation: Work gives meaning to life. Quality gives meaning to work. And remember more than ever America needs you.(Laughter)
Robert Guzauskas
West Palm Beach, Florida
Dear FRONTLINE,
Thank you for a look at this issue that was as fair and accurate as it was. That said, I think you missed one big point: workers' collective expectation of retirement age has stayed fixed at 65 while life expectancy has gotten longer and longer. As pointed out on the show, a 65 year old retiree would today expect 17 years of (probably active) retired life. That's far longer than the expectations of their parents - who probably would have been okay with the 7 - 8 years of reserve that most folks are retiring with today. Folks at 65 are generally able bodied today - working until they're in their early 70s will still give them the kind of retirement their parents had.
Sure, it would be great if able-bodied leisure time in ones late 60s was an inalienable right for all of us. But let's not pretend that that's not going to be tremendously costly.
Tom Schryver
Ithaca, NY
Dear FRONTLINE,
My company recently merged, and a part of that merger is the conversion of our traditional pension plan to the cash balance plan in place at the firm with which we merged. I will be age 51 when this conversion occurs on 1/1/2010. I expect at least a 60% reduction in my retirement income due to this conversion. I do have a 401k plan, but the funds therein will have to be left in greater risk investments for a longer period than I would like to make up for the loss of my traditional pension. Let's see, I must invest from my earnings for a retirement income that formerly was a paid benefit by my employer. How is that not a reduction in pay? All this while the executives of my merged corporation share in $180 million of merger bonuses. This is leadership? We "baby boomers" may explode before this is done!
Greentown, Indiana
