401{k}s

Barry Ritholtz did an excellent piece on the problems with 401(k)s a week or so ago.  I think it's worth a read on everybody's part.  Here's two takeaways from the article.

"As we shall see, the parties involved in designing, running and investing in 401(k)s have made a hash of it. You, your employer and your plan’s investment managers fail to follow even the most basic rules of investing. You overtrade, chase performance, do not think long term. All of you — ALL OF YOU — have done a horrible job managing your retirement plans."

"What’s wrong with these plans? Human behavior, which has managed to turn a relatively simple idea into a complex, overpriced, underperforming mess. Returns have lagged behind a myriad of asset classes doing exceptionally well over the long haul.

Mr. Ritholtz then proceeds to give out some great common sense ways that 401(k)s could be fixed.  Go read the article."

Link:  What's the Problem With 401(k)s? You.