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Crisis Drains $2T From Retirement Savings
Tumbling values may mean more workers have to stay on jobs longer, retire later
By Jim O'Neill
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Posted Oct 8, 08 10:31 AM CDT
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(Newser)
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The financial crisis has drained $2 trillion from Americans' retirement savings over the past 15 months, reports the Washington Post, a 20% drop in the value of pensions and 401(k) plans that may force many to retire later and could spread to the general economy as workers tighten belts further. The decline has renewed debate about whether 401(k) plans, heavily linked to the market and heavily pushed by the government, are smart retirement investments.
"The loss of retirement security is a reversal of fortune and the result of very specific flawed governmental policies that have been biased toward 401(k) plans," said one professor. "Markets do go up and down, and 401(k) participants must try to remember to think long-term," countered one consultant. Younger workers who typically invest more in stocks have been most affected by the market's plunge.