An Educated ‘Guess’
It’s not hard to find scary headlines about 401(k)s – seems as though every week you read how people aren’t saving enough, are worried that they aren’t saving enough, aren’t saving enough and aren’t worried that they aren’t saving enough… Then in the past couple of weeks, a new twist. First a headline that proclaims that “ The 401(k) is Wreaking Havoc on Retirement .” Then one that purports to share “ Why 401(k)s are bad for people without a college degree .” As it turns out, the articles are both about the same study, “ Disadvantages of the Less Educated: Education and Contributory Pensions at Work .” The authors of that study (ChangHwan Kim of the University of Kansas and Christopher Tamborini of the Social Security Administration) offer a basic premise – that less educated workers aren’t as well served as college graduates by the current defined contribution-centric plan structures (notably 401(k)s) that predominate the retirement landscape today – which is to say that they are...