But there are some serious problems, too.
Contributions are tax deductible, and tax on profits is deferred until money is withdrawn.
Moreover, many employers add money to the employee's account. The old-fashioned pension plan, which offered a guaranteed lifetime benefit based on the participant's years of service and pay level, is going the way of the dodo. In other words, the risk of paying for a worker's retirement has shifted from the employer to the employee. The sobering findings of a new Matthew Greenwald Associates survey for John Hancock Financial Services, unfortunately, reinforces the conclusions of previous studies. Only half of those surveyed had figured out how much money they would need in retirement or had a clear plan for dividing their portfolios among various types of assets.