Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Global Economics

Don't Do a 401(k)

Patong Beach in Phuket, Thailand

Photograph by Kaveh Kazemi/Getty Images

Patong Beach in Phuket, Thailand

To encourage 401(k) participation and saving, employers routinely distribute educational materials to their employees. This research indicates that employers may want to ensure that their communication strategies take into account the mindset of younger workers, for whom retirement is a vague and distant event.

—Nicole Votolato Montgomery, Lisa R. Szykman, and Julie R. Agnew, How Can Employers Encourage Young Workers to Save for Retirement?, Center for Retirement Research at Boston College, March 2012

I was approached by a cherub the other day. (Cherub may be male or female. They make Bloomberg Surveillance go. On the weekend, they go to Montauk, not the Hamptons. They have been to Tibet and/or Thailand.)

“I want to start a 401(k), but someone told me not to.”

At age 24, the breeding has clicked in. Save for some “vague and distant event.” Except some yahoo has said don’t acquire shares in Yahoo! (YHOO)—or equities, as a rule. After 10+ years of financial torture, turmoil, and turbulence, it has come to this.

We are advising the next generation to forego the advantage of time to generate real wealth, given certain volatility. Some are advising them not to take the employer match. (You put in $1,000; they put in $1,000. At age 74, said $2,000 is $58,914.05 at 7 percent per annum.) Unbelievable! That could be an entire year of living on love in Phuket.

The research on our failed retirement system is tangible. (Bonus: It awaits you at Alicia Munnell’s Center for Retirement Research at Boston College.) Next year celebrates the 40th anniversary of the Employee Retirement Income Security Act of 1974. ERISA. Exactly what portion of America can’t retire now or in 2023?

Seriously, this cherubic financial-planning moment was a real low point.

Decade and two-decade returns on equities are better than good. Yet, the present walls-of-worry allow selected “advisers” to crush the nascent spirit of long-term investment in shares of American companies. (The phrase “shares of American companies” I first heard at age 24; the speaker was John Templeton of Tennessee.)

Suck it up. You may be scared stiff of the market, but don’t drop your perma-doom and -gloom on a generation that wants to believe in the future. See you in Montauk. Discuss.


Keene hosts Bloomberg Surveillance 7-10 a.m. ET on 1130 AM in the New York metro area and nationally on SiriusXM 113.

blog comments powered by Disqus