Retirement Gamble: Frontline’s Powerful Case for Taking Control of Your Financial Future

As if you needed reminding, the last dozen years have exposed the 401(k) as a deeply flawed primary retirement savings mechanism. A PBS special takes you through the gory details.

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The retirement crisis in America is fairly well defined: Six in 10 people expect to delay retirement; just 14% are confident they’ll have enough to live comfortably and 17% say they will never be able to quit work altogether.

If that doesn’t bring you down, make sure you tune in to the PBS Frontline special Retirement Gamble tonight. Serious depression is sure to follow. Hopefully, though, so will remedial action on the part of anyone who identifies with the handful of struggling working class Americans in this documentary.
Retirement doesn’t break new ground. Anyone who’s been paying attention understands that corporate America has shifted the burden of retirement to individuals over the past 30 years. Traditional pensions have been supplanted by 401(k) plans, which have proved to be massively ineffective as a primary source of retirement security. Billions of dollars in savings have leaked out of these plans over the years and trillions were wiped away in the market collapses of 2000 and 2008.

The program takes us through all this gory history and makes the case that our retirement programs are not a system but a “free for all.” It concludes that saving for retirement is a “bewildering and frightening challenge.”

(MOREHow a Few Text Messages a Month Can Secure Your Retirement)

For emphasis, Retirement even dredges up the $18 billion in bonuses paid to Wall Street the year of the mortgage crisis, when people were losing their jobs or their homes or both. The point is one that I’ve made over and over in this space: You are on your own out there; it’s time to start paying attention.

You can’t help but identify with one subject in particular, a well-spoken man of retirement age who gleefully recalled the day in 1999 when his 401(k) portfolio crossed $1 million. “I just thought this was how it works,” he says. The market took back all his gains within a couple years.

The special takes aim at the confusing and multi-layered fees that accompany many 401(k) plans and which are difficult to sort out in smaller plans. John Bogle, the low-cost index-fund champion at Vanguard, is interviewed at length. So it’s no surprise that the program’s chief advice seems to be: Stick with index funds. It’s a fine conclusion, of course. As Bogle notes in the program, over the course of a lifetime a seemingly low annual fee of 2% can reduce what your balance would have been by more than 60%—adding years to your working life. A typical index fund charges about a tenth of the costs of a typical fund.

The program also highlights:

  • On any given street, one household may be paying 10 times as much to invest in a 401(k) as the household next door.
  • Popular 401(k) providers often charge a plethora of hidden fees, burying them under opaque names like “Expense Ratio.”
  • Many financial advisers are not required to provide advice that is in their clients’ best interest; they are only obligated to give advice that is “suitable.”

If you’ve been paying attention to the changing retirement landscape, this program won’t add much to your understanding. It will mostly remind you what has gone wrong. But most will find it illuminating. You are all but certain to identify with one or more subjects in the program, and it may provide just the jolt you need to start paying attention to investment costs and save 10% of every penny you earn.

(MOREA New Idea to Fix the Retirement-Savings Crisis)


15% of Americans get 90% of the income, have 90% of the wealth, so, no surprise 14% think they can retire.

Investing is just another "de-regulated" scam, like electric supply, energy, tel com, where the public is out of their depth, shelling it out to the big boys or being taken to cleaner by scam artists.

Business based pensions worked because only a few investment professionals were needed, realtively speaking, and since they dealt mostly with other savvy investors, the scams were limited.  Now investment "professionals" are so indoctrinated into the scam that even Warren Buffet had to part ways with his heir apparent for insider trading.

Anyone who thinks everyone should be a well educated investor, or even "safe", well, do you believe the same about everyone being an attorney, brick layer, doctor,plumber???  It is a wildly complex task investing, and keeping up with every scam, like the sub prime mortgages, along with every insider deal, pump and dump, interest rate fixing (the entire market for what was it, a year or more?).  Oh, and the hundreds of hours, thousands over your life "learning" investment, is not being spent being better at what you do,  at making your business / boss more money, more profitable has just done so much for the American economy, hasn't it?


When it's up to each of us to be responsible for our retirement savings, we have to be very diligent to understand just where the money is going and how it's being invested (if any money is being saved at all).  Most people just don't educate themselves on how to invest their hard earned money.  Therefore they get taken to the cleaners in the way of fees and such.

I think people are too intimidated by the terminology and the time it takes to truly understand a defined contribution plan, so they ignore it and hope it grows.  There needs to be a way to have a portable defined benefit plan that is more automatic and doesn't depend too much on the individual to manage it.  More people would end up with at least some income in old age and would be more likely to stay off public assistance because they failed to plan.

I wrote an article a while back on 401k's that might be of interest:  

"Drunken Sailors and 401k's"-


Index Funds are fine to a point, but you also need funds that are not correlated to the market and that is where an index fund would fail. Anyway the fees are all part of the problem. There are other variables that are important in choosing appropriate funds.


Thank you for the article on the Retirement Gamble. As your example from John Bogle states, fees do have an impact on your savings balance over time.

As your program highlights suggest, not all 401(k) plans are built the same. It is important that plan sponsors and plan participants take the time to review their plan’s fees. Retirement plans are evolving and changes such as the U.S. Department of Labor’s fee disclosure regulations are a step in the right direction. With that information participants can evaluate their plan fees and how they will affect their savings over time. As a member of the retirement industry we are working to help educate people on this topic with our calculator.

Workplace savings plans continue to play a big role in helping people save for the future. According to ASPPA "less than 5% of individuals making between $30,000 and $50,000 save on their own, compared with more than 70% of those same earners with access to a workplace retirement plan.”

These plans remain as a way for employers to provide a savings  path for their employees who may not save on their own.