This week, my guest on the podcast thinks the 401(k) is a failure.
Teresa Ghilarducci is a labor economist at the New School in New York City who specializes in topics related to older workers and retirement security. She has been arguing for years that our current self-directed system of saving for retirement in 401ks and IRAs is not up to the job of helping people build for a secure retirement. She thinks it works just fine for the top five percent of households by income, but not for the rest of us - and all the advice that people like me dispense is somewhat useless and frustrating for most people.
Teresa has a different idea that she has been promoting in the halls of Congress, called the Guaranteed Retirement Account (GRA). The idea is a mandatory, government-run saving program; any employer that doesn’t offer their own plan would be required to contribute and sign up workers. Here’s a link to an article I wrote in 2015 for The New York Times on Teresa’s GRA idea, along with a discussion of her unusual partnership on this project with a top Wall Street executive. And here’s a primer on the GRA on the New School website.
Teresa also is launching her own podcast later this month called Reset Retirement. The program will feature interviews with working Americans who have encountered problems navigating the retirement system, and comments from experts on how those problems can be handled. You can subscribe via Apple Podcasts or Spotify.
A tidbit: Teresa says she drew inspiration for the podcast from my recent book, Jolt: Stories of Trauma and Transformation. How, exactly? You’ll have to listen to this week’s podcast to find out. Do that by clicking on the player icon at the top of this page.
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This podcast is part of the subscription RetirementRevised newsletter. Subscribers have access to all the podcasts, plus my series of retirement guides on key challenges in retirement. The series includes topics like Social Security claiming and the transition to Medicare. The series also will include guides to aging in place, working longer as a retirement plan and much more. For a sample, check out the recently-published guide to the cost of healthcare in retirement, featuring an interview with retirement educator and actuary Steve Vernon.
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