Are 401k plans that bad? It depends on how you look at it.

The good news: 401k plans are doing better than ever  — the average American has 80% more in their account now than they did just a few years ago.

The bad news: at such levels, 401k savings alone — even when combined with Social Security — may not provide nearly as much as some think during retirement.

So, does that mean 401k plans alone are to blame for our entire retirement crunch? According to Helein Olen — author of Pound Foolish — the answer is a resounding yes.

Are 401k plans really evil?

In a 2013 article published by Salon.com, Olen comes to the following conclusion:

The concept of a do-it-yourself retirement was a fraud. It was a fraud because to expect people to save up enough money to see themselves through a 20- or 30-year retirement was a dubious proposition in the best of circumstances. It was a fraud because it allowed hustlers in the financial sector to prey on ordinary people with little knowledge of sophisticated financial instruments and schemes. And it was a fraud because the mainstream media. sold expensive lies to an unsuspecting public. When combined with stagnating salaries, rising expenses and a stock market that did not perform like Rumpelstilskin and spin straw into gold, do-it-yourself retirement was all but guaranteed to lead future generations of Americans to a financially insecure old age. And so it has.

I find this line of all-or-nothing, black-and-white thinking to be far too simplistic — and fatalistic — to help anyone who might be trying to save for their own retirement.

Yes, Olen has some very valid points. But taken as gospel, this message ignores a host of variables that you have under your control, and abdicates all responsibility to outside sources. Without being able to see the grey from the black and white, readers are left with no solid plan to take action.

This is not a new problem

Let’s look at the very concept of retirement, in general. It’s true that expecting people to save for a retirement of a few decades was a dubious idea. In fact, the very concept of retirement is an incredibly new idea for mankind. Even in America, it was only recently that people began living long enough to have a retirement.

As fellow Fool Morgan Housel has shown. The notion that these challenges are new  — that there was some golden era when Americans were prepared to kick up their feet and enjoy retirement in financial security —  is a myth. In fact, those who are older than 65 years today are receiving higher Social Security benefits (in inflation-adjusted dollars), and have lower rates of poverty than any other generation before them.

People were preyed on, but.

Olen is also right to say that hustlers in the financial sector. [preyed] on ordinary people with little knowledge of sophisticated financial instruments. In fact, it was — in large part — because of this situation that The Motley Fool came to be over 20 years ago.

As Olen states, it wasn’t until 2012 that 401k plans were forced to reveal the fee structure of their funds to participating employees. That’s a move that should have been made from the get-go.

But Olen cites the amount of money the finance industry has brought in from running 401k plans — anywhere from $89 billion to $500 billion — without any context. And she focuses on plans with very high fees to prove that we’re all being ripped off. She specifically says, the [average fee] for target date funds is a hefty 1.08 percent annually.

The reality, though, doesn’t mesh with what Olen says. According to Morningstar. as of 2013, 57% of all target-date funds were being managed by either Fidelity or Vanguard. The average fee for these funds: a measly 0.165% — or about one-sixth of what Olen claims.

And everyday investors are wising up. As Reuters’ Felix Salmon has shown. low-cost, passive investing choices have never been more popular. In the broadest terms, that’s great news for working Americans.

The stock market did not perform?

But perhaps the most alarming part of Olen’s diatribe is the assertion that the stock market hasn’t produced the type of returns necessary to help fund a retirement.

To be certain, 401k plans have gone through a lot since arriving on the scene nearly 30 years ago: two wars in Iraq, one in Afganistan, September 11, the dot-com bubble bursting, and the Great Recession — to name a few. And yet, since 1985 — when 401k plans began gaining traction — the S&P 500 has returned 1,260% after dividends, or roughly 9.1% per year.

Think about that for a second. By simply picking a broad, low-fee fund, investors increased their savings by 9.1% per year, which would actually be even more if their employer had some type of match — and had to do next to nothing to earn that .

Early in her piece, Olen writes: [P]ersonal finance media. proclaim even today that if we don’t have enough money set aside for retirement, it is all our own fault. It’s not.

True, it’s not all anyone’s fault, but Olen doesn’t address personal responsibility at all. It’s that type of black-and-white thinking that overshadows the very real concerns Olen raises. Yes, wages are stagnant; for some, there’s no doubt that saving for retirement is beyond the realm of the possible.

But to assume that this is the case for everyone — without exception — is to grievously misrepresent our current situation. Yes, as Olen states, we’re spending more money on certain things than we were 30 years ago — but for many, that’s an unconscious choice, not something we’ve been forced into.

For instance, in 1985, the median area of a new home was 1,600 square feet. By 2013, it was almost 2,400 — an increase of 50%. Does that mean we are 50% happier now than we were then? Do we need this space. My guess is no — though we’ll throw our hands up at the higher costs associated with such living spaces.

Or look at college: though sticker prices have skyrocketed, few — if any  — people realize that they can easily go to community college for two years, get their associate’s degree, and transfer to a four-year university to get their bachelor’s at a fraction of the cost.

The point is simple: there’s a lot of low-hanging fruit when it comes to saving for retirement that people can take advantage of. At a bare minimum, for instance, employees should be contributing whatever it takes to receive the maximum company match — it’s literally free retirement money!

Let’s not forget about these choices, as simple, easy steps usually make the biggest difference in the long run.

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