Part II. 401(k) PLAN BASICS

Planning for the Future

The 401(k) plan did not start a workplace revolution, yet it is representative of myriad changes that affect every worker in America. If we could name the result, we might call it the end of paternalism, the era when Americans expected an employer to act as watchful parent, taking care that all a worker's needs be met once he'd left home and taken a job. If he became ill, injured, got married, or had a baby, or if a family member died, the employer would be there to offer comfort and help. Of course, this employee–employer relationship faded with the growth of a global economy. But some of us refuse to believe that; we deny the fact that our employer is not a parent, is not responsible for any of us.

Do you ever stop in an office or at a store or restaurant and hear an employee say: "No one appreciates me around here. If I was gone, then they'd see how much they needed me." Perhaps it's not unusual to want validation from an employer ("Nice job") or an offer for a bonus or salary increase. But when these niceties become part of the expected compensation package as they did on Wall Street by the end of 2008, the system is broken. When taxpayers suffering from job loss, debt, and a lack of funds to send their kids to college are asked to bail out banks and insurers who continue to use corporate jets and host employee retreats that cost hundreds of thousands of dollars, the system is broken. "Employees" have overestimated their value. ...

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