Long gone are the days when companies offer pension plans. Just a fraction of companies today offer pensions to new employees. My guess is that pensions will be completely extinct in the next couple decades ( if not sooner ). In its place, the 401K is intended to provide what pensions used to. Of course, the difference is that YOU are entirely responsible for funding and managing your retirement via your 401K. No decisions are made for you and participation is completely voluntary. Trouble is, the vast majority of Americans who have a 401K at their disposal do not take full advantage of the opportunity and/or are too lazy to take time to save and plan for their retirement. These folks have been conditioned as they saw their parents completely provided for via their pensions and Social Security. A harsh reality will hit sooner than they expect as they realize how unprepared for retirement they really are.
Enter the Mandatory 401K. Currently, only 1 in 5 employees sign up for their 401K. However, many companies are now automatically signing up their employees upon initial employment. This has drastically increased the enrollment rate.
Sound Money
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