Coming Up Short: The Challenge of 401(k) Plans

Demographers predict that the number of people over age sixty-five will double by 2030. With the stress on the U.S. Social Security system, no wonder Baby Boomers are becoming nervous about their golden years. In Coming Up Short, Boston College economists Alicia H. Munnell and Annika Sunden examine the ubiquitous 401(k), which has become the leading employer-sponsored pension and income source that many middle class Americans are counting on to supplement Social Security when they retire. Organized around a typical series of decisions that employees make when they consider contributing to a 401(k), the book offers advice on whether or not to participate, how much to contribute, what to do with accumulations when changing jobs, and how to deal with lump sum payments at retirement. The authors analyze the deficiencies of the 401(k) in practice while at the same time providing readers with recommendations on leveraging the plans to achieve the potential that they theoretically promise.