subject: Company Growth And Sustainable Retirement [print this page] As many businesses still feel the aftereffects of the recession, most employers feel that growth prospects are bleak. This has resulted in many calling for the abolition of future 401K benefits. Until the time that companies can afford to match all 401K contributions by their employees, this program won't be enough to fund an employee's retirement (although many are still erroneously banking on their 401Ks and Social Security payouts to make up a huge part of their nest egg).
The McKinsey consulting firm's last corporate survey found that two-thirds of all business leaders believe the national economy is beginning to recover, although almost forty percent of all participants don't think the global economy is improving. While economic pessimism on the international scale is still widespread among many, chances are that your 401K won't be worth your long-term investment, compared to other sources of retirement income.
Although many believe that the international economy is still in the dumps, their appraisal of the national situation suggests that many think the opportunity for local business growth is still there. However, the return to financial stability is still uncertain, and so is the earlier generosity of many employers when it comes to matching employee contributions up to the dollar. This means that forecasted retirement benefits from 401K plans are still far from what many workers hoped for prior to the recession.
As of now, the average American's retirement accounts will net him or her a little more than sixty percent of what he or she actually needs to live comfortably during retirement - that's still a long way to go to the ideal figure. The only foreseeable solutions to this problem seem to be unrealistic: the capital invested in these retirement plans need to increase drastically while workers have to lower their expectations of what they're going to get.
If you're thinking about the slight improvement of the national economy bettering your chances at a comfortable retirement, think again. Although many companies are predicting a gradual growth and eventual comeback in terms of profits, the effects of the recession has been such that it will take time before all employers can match employee contributions to enable the retiree to live on his or her 401K benefits.
by: Carina Smith
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