The New Commonsense Guide to Your 401(k): Rebuilding Your Portfolio From The Bottom up

Part I. THE NEW RETIREMENT LANDSCAPE

What Happened?

Many investors, including those in 401(k) plans, feel frustrated, angry, and let down by the near-collapse of the U.S. financial structure. "Near" might be too generous. It seems the only way Wall Street could be shored up was to spend our tax money to put the finger in the dike of rampant greed and irresponsibility. Investors—as well as all other taxpayers—have a right to be outraged about it. But we must also accept the fact that if the government allowed the banking system to give way, we would need to go back to barter and trade. So it's not a question of whether it's right to hold up this rickety system that other people have all but destroyed; we can't move ahead, any of us, until we have a sound banking system.

I've been writing about money long enough to remember the magazine covers of the 1980s—young couples planning to retire at fifty and live the good life. In the 1980s, retirement seemed to be the definition of the good life.

Why? The eighties were a time of conspicuous consumption, almost to decadence. Baby boomers who had belatedly entered the job market felt they needed to catch up, to make a lot of money, to have two children, and, because they were older now, and richer, to create a magazine-cover family.

So the Boomers began getting pregnant, and never had anyone been pregnant like this before! They must read books to babies in the womb. They must play classical music for the fetus. They must have hand-made European ...