With regards to the recent 401k debacle, where exactly was the major loss; employee contributions, employer contributions or related earnings on either of these two contributions?

queproblema

If the earning were wisely--or luckily--invested, the greatest loss was on earnings. This is one point from a good article explaining how a 401k account works: "The money is given to a third party administrator who invests it in mutual funds, bonds, money market accounts, etc. They don't determine the mix of investments -- you do that." http://money.howstuffworks.com/personal-finance/financial-planning/401k1.htm And on page 1 of the above-referenced article is the definition of a 401k: "The plan got its name from its section number and paragraph in the Internal Revenue Code -- section 401, paragraph (k)." But: "'All the risks and responsibilities are on the individuals in 401(k) plans,' says Karen Friedman, policy director at the Pension Rights Center, an advocacy group." http://www.usatoday.com/money/perfi/retirement/2008-10-30-retirement-401k-funds-stocks-savings_N.htm Apr 19 09, 8:30 PM

queproblema

CBS has a couple of pieces on the 401(k) today. Three quotes: "Trillions of dollars have evaporated from those accounts that have become the prime source of retirement funds for a majority of American workers, affecting their psyche and their future." "Wray says that many people still have more money in their 401(k)s than they've actually contributed." "But, in fact the 401(k) plans that have become the primary source of retirement income for 60 million Americans were never designed to be retirement plans in the first place. They were created in the late 1970's as a savings plan and tax shelter for ordinary Americans." From pp. 1 and 2 of http://www.cbsnews.com/stories/2009/04/17/60minutes/main4951968.shtml And there's a link from there to a piece on how to rebuild yours. Apr 19 09, 11:32 PM