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Social Insecurity

Social Insecurity

401(k)s and the Retirement Crisis

How 401(k)s have gutted retirement security, from charging exorbitant hidden fees to failing to replace the income of traditional pensions.

Author: James W. Russell

Price: $20.00

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Each generation of workers since the nineteenth century has had more retirement security than the previous generation. That is, until 1981, when 401(k)s began replacing traditional pensions. For the last thirty years, we've been advised that the best way to build one's nest egg is to invest in 401(k)-type programs. This financial experiment, promoted by neoliberals and Wall Street, has come full circle, with tens of millions of Americans now discovering that they would have been better off under traditional pension plans long since replaced. As James W. Russell explains, this do-it-yourself pension system-in which individuals with modest incomes are expected to invest large sums of capital in order to reap the same results as professional high-end money managers-isn't working.

Social Insecurity tells the story of a massive and international retirement robbery-from its ideological origins in Milton Friedman's infamous Chicago School to its implementation in Chile under Pinochet's dictatorship and adoption in America via Reaganomics.

Can You Afford to Retire?

.Looming retirement crisis. Almost half of middle-class workers will be poor or near poor in retirement. In 2010, 75 percent of Americans nearing retirement had less than $30,000 in their retirement accounts.

.A great risk shift. In 1981, 59 percent of private sector workers with retirement benefits had traditional pension plans. By 2010 that figure dropped to 19 percent as 81 percent now had 401(k) and similar private investment plans.

.Costly hidden fees. The Department of Labor has shown that even a mere 1 percent increase in fees deducted over the course of investing will reduce your final balance by 28 percent.

Why It's Time to Retire the 401(k)

.Myth 1: 401(k)s produce higher rates of return than traditional pensions or Social Security.

.Myth 2: 401(k)s are cheaper for employers and employees than traditional pensions.

.Myth 3: 401(k)s fail to provide adequate retirement income only when individuals do not save enough.

.Myth 4: There is no fiscally sustainable alternative to 401(k)s.

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"James Russell is a formidable crusader with a gift for rendering an obtuse topic accessible. In Social Insecurity, he has penned a book that will enrage citizens of all ages and political persuasions, illuminate them about the organized robbery of their economic futures by the financial services industry, and inspire them to action. More than a description of a retirement system coopted by predatory bankers and fund managers, Social Insecurity is also a passionate account of the complicity of the global political elite and their ideological zealots, complete with a Hollywood moment of Russell's victory in achieving reform measures that can benefit everybody." -Nomi Prins, author of All the Presidents' Bankers and It Takes a Pillage

"Forget the TV ads of gray-haired retired couples on bicycle trips. If you're an average American, you won't have enough to retire on. The shift from old-fashioned pensions to 401(k)s has enriched Wall Street and jeopardized your future. Essential reading for anyone who works for a living-from millennials to boomers-James Russell's Social Insecurity explains what you lost and who benefited from it." -Charles R. Morris, author of The Two Trillion Dollar Meltdown and The Tycoons

"An absolutely necessary read! James Russell has written the book explaining how we all got sold on the ridiculous notion of do-it-yourself retirement savings, and why it was never, ever going to work for anyone but the financial services sector. A devastating indictment that nevertheless concludes with ideas for reversing a dangerous trend we can no longer afford to ignore." -Helaine Olen, author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry

"You really can't understand inequality in America today, James Russell helps us see, without understanding how Wall Street has grabbed a chokehold on our retirement savings system. We're not 'saving for retirement' anymore. We're enriching the 1 percent. Informative and stimulating, Social Insecurity offers us a sobering tale about a financial experiment gone terribly wrong-and some great ideas on what we can do to change how this story ends." -Sam Pizzigati, author of The Rich Don't Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970

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