While many of us plan to rely on 401(k) plans to fund our retirement, Paul Merriman, founder of Merriman Wealth Management in Seattle, says the plans are hampered by laws.
He lists seven in a column on
MarketWatch.
- "Restricted access." That's restricted access to "the best investment choices," Merriman says.
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- "Participation not required." Many workers don't even participate in their companies' 401(k) plans even though they are eligible.
- "Insufficient employer match." Some companies don't match their employees' 401(k) contributions.
- "Employees bear the costs." Merriman is referring to the plan's expenses, the burden of which falls on the employees' shoulders.
- "No Rollover IRA option." Some 401(k) plans don't let workers roll over their 401(k) balances into their IRAs while still contributing to the 401(k). Doing this would allow employees to have access to more investment options.
- "Too much company stock." Some 401(k) plans encourage workers to make heavy purchases of their own company's shares. "It's too easy for employees to gloss over the very real added risk that goes along with owning an individual stock — especially stock in a company they are already counting on for wages and benefits," he explains
- "Default options are too safe. Too many plans steer contributions to low-performance investments," Merriman writes.
Meanwhile, Tampa, Fla., rates as the top city for retirement in a survey of the biggest 150 cities by
WalletHub, while Providence, R.I., places last.
The ratings were based on 25 metrics grouped in five categories: affordability, jobs, activities, quality of life and healthcare.
Rounding out the top five cities after Tampa are Grand Prairie, Texas; Orlando, Fla.; St. Petersburg, Fla.; and Scottsdale, Ariz. Rounding out the bottom five before Providence are Newark, N.J.; Philadelphia; New York; and Chicago.
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