The Investopedia Express with Caleb Silver

Making the Case Against the 401(k)

Jun 17, 2024

Professor Teresa Ghilarducci joins the podcast to argue against the 401(k), highlighting its inequities and misaligned incentives. She advocates for a new government-sponsored retirement savings account. The discussion also touches on the current stock market highs and the need for a more secure retirement approach for American workers.

35:46

Episode guests

Teresa Ghilarducci

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Podcast summary created with Snipd AI

Quick takeaways

401(k) favors high earners, lacks equity for most workers.

Proposal for new government-sponsored retirement savings account to address systemic flaws.

Deep dives

Stock Market Trends and Apple's Performance

The recent stock market trends have been noteworthy, with major indices hitting new highs and Apple's stock rallying post-product announcements. The S&P 500 and NASDAQ soared over 3%, reflecting strong market sentiment. Despite the Fed signaling only a small rate cut this year, investors remain optimistic.

Unintended Consequences of the 401k Law

00:34

Shorter Bull Market Cycles with Room to Grow

00:33

Matching Assets with Liabilities in Economic Systems

00:27

Intro

4min

Analyzing Market Imbalance and Over-Concentration

2min

Home Sales Data, Stock Market Events, Retirement Crisis

3min

The Complexities of the 401(k) System

23min

Exploring the Evolution of the 401k Retirement Savings Vehicle

4min

Professor Teresa Ghilarducci, a labor economist and retirement expert at The New School for Social Research, has been arguing for years that the 401(k), which was never intended to be the primary retirement savings vehicle for most American workers, only helps high earners and is riddled with misaligned incentives. She joins The Express to make the case for a new government sponsored retirement savings account that she says is more equitable and provides a pathway to allowing workers to not run out of money once they stop working. Plus, new record highs keep coming for the stock market, but by all accounts, this bull market is pretty tame.

LINKS FOR SHOW NOTES

https://www.investopedia.com/what-to-expect-in-the-markets-this-week-8662467

https://www.newschool.edu/nssr/faculty/teresa-ghilarducci/

https://teresaghilarducci.org/about

https://insight.factset.com/

https://www.investopedia.com/terms/t/triplewitchinghour.asp

https://www.investopedia.com/terms/1/401kplan.asp

https://twitter.com/TimmerFidelity

https://eig.org/bipartisan-pair-of-economists-propose-bold-new-wealth-building-program-for-the-bottom-50-percent-of-american-workers/

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