A fired-up congressman could be leading the charge to get exchange traded funds (ETFs) and other index funds into all 401(k)s, reports Sara Hansard at InvestmentNews. House Education and Labor Committee Chairman George Miller, D-Calif., was sufficiently alarmed by the Government Accountability Office’s (GAO) report on retirement that he sponsored a bill, which will also require better disclosure of 401(k) fees.
Highlights (or lowlights, as it were) of the GAO report were:
- Young workers entering the workforce today will only have enough money in their 401(k) plan to replace 22% of their pre-retirement income.
- Of those born in 1990, 37% will reach retirement age in the 2050s with no savings at all in a 401(k)-type account.
- The current median 401(k) balance is $22,800.
That’s not good, especially with the troubles Social Security is having. The report suggests that workers should be able to participate in 401(k) or other retirement savings plans when they begin a new job, and when they leave, those savings should be rolled over into a new plan.
The GAO’s full report can be found here.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.