Getting serious

So you are thirty years old, your parents have been coaching you to start early putting money away for retirement, and you are finally getting your savings plan started. If you, like thousands of Americans, enroll in an employer sponsored 401(k) plan you will have to decide how much of your paycheck you will dedicate to your retirement plan.

However, most investment planners don't tell you two essential details:

• There is no guarantee on the long-term return on your money, and
• Although the prevailing investment opinion is that in the long run the market has been continuously appreciating, this doesn't help you when at the time you retire the stock market hits a slump and you are forced to withdraw your life's savings at a loss.

But even when all goes to plan, these different scenarios show that achieving an adequate retirement income is elusive to most middle class Americans.

In addition, there is a question whether people are qualified to make their own financial decisions. One study found that nearly a quarter of Americans ages 56 to 64 had more thana 90 percent of their 401(k) balances invested in stocks instead of bonds, against financial advisers' standard advice for people nearing retirement age. (New York Times, 3 September 2009)