Welcome to money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it.

I'm your host David Stein. Today is episode 497. It's titled How to Fix the

Retirement Savings Crisis. Recently I read an article written by Michael

Steinberger in the New York Times. an article was titled, Was the 401k a mistake?

401k a mistake.

401k being the U.S. version of defined contribution plans, which have for most of us replaced defined benefit

plans or traditional pension plans where you're guaranteed a certain payment for the rest of your life.

The article kicked off featuring a woman named Jen Forbus.

She turns 50 this year.

As good health, used to work as a school teacher,

but now is an editorial supervisor

at an educational publishing company.

She makes high five figures,

so I assume around $90,000 a year.

She anticipates paying off her mortgage in the next decade and recently made her last car payment.

She doesn't have any other debt.

She has $200,000 in savings and she would like to stop working when she's 65.

She lives a modest life. She understands the investment

options in her 401k plan and has a 60% allocation to stocks, 40% to bonds. She saves 9% of her salary and then her employer kicks in another 5%.

So she's saving 14% of her income per year

going in to her 401k.

The author of the article says, even if the stock market delivers blockbuster returns over the next 15 years,

...