Forbes supports a conservative approach
By Jeffrey Reeves MA
Remember when my article "Dump Your 401(k)" was considered by some to be outlandish?
It's possible that the 401(k) plan has failed.
Don't believe it? Take a look at your latest account statement. Hypothetical investment returns run by your employer probably suggest an 8 percent return per year is possible as an average for use in planning purposes. The Standard & Poor's 500, a benchmark that closely mirrors the performance of a significant number of mutual funds commonly found in 401(k) plans, was down for the past decade (December 2000 to December 2010), and a sampling of popular funds offered by major mutual fund complexes suggests that even a 6 percent rate of return over 10 years is unlikely.
Those 8 percent projections may have worked on out on paper, but for anyone hoping to retire over the past few years or during the next half a decade, that 8 percent is likely to prove elusive.
How did we get so dependent on a savings vehicle that has failed so many of us? History provides some insight.
Read more at Forbes: The Danger of a 401(k) Flameout