The Argument for Ditching the 401(k) and Starting Over

There have been some modest attempts in the past few years to shore up and fill in gaps in this country's haphazard system of retirement savings. These attempts -- federal myRA accounts, state-run retirement accounts, and fiduciary standards for retirement account providers -- have also all been shut down, rolled back or delayed since Donald Trump moved into the White House a year ago.

So it may seem like a curious time to talk about tossing aside the current system of 401(k)s and individual retirement accounts in favor of an entirely new retirement savings system, as Teresa Ghilarducci and Tony James do in their book, "Rescuing Retirement: A Plan to Guarantee Retirement Security for All Americans," which after an earlier iteration in 2016 is now out in hardcover. But hey, since the little stuff isn't getting anywhere, why not go big?

Ghilarducci is an economics professor at the New School for Social Research in New York who became kinda-sorta famous after she told a House subcommittee in October 2008 that 401(k)s gave big tax breaks to the affluent while not helping most Americans save adequately for retirement -- which Rush Limbaugh, who went on to spend years harping on her ideas, translated as "she wants to basically eliminate the 401(k)." James is the president and chief operating officer of private equity giant Blackstone Group LP, as well as nonexecutive chairman of the board at Costco Wholesale Corp.