Life was much simpler for employees when the defined benefit planwas popular. They did not care what the stock market did day to day. Although employees should remain accountable for their own retirment, we should make the choices much easier.

“I think there’s been a change in how confident they feel and how secure they feel about planning for retirement,” she says.Even so, of the estimated 60 million 401(k) participants, 87 percent have at least a portion of their portfolio in stocks, according to the Investment Company Institute, or ICI, a national association of U.S. investment companies. Four out of 10 401(k) participants have upwards of 80 percent in stocks.

Teresa Ghilarducci, a labor economist at the Schwartz Center for Economic Policy Analysis at the New School, says that while 401(k)s have turned average Americans into investors, they still act like human beings. “They panic,” she says.

Ghilarducci characterizes 401(k)s as “do-it-yourself pensions.” She says most investors can’t afford truly independent financial advice, so instead they rely on brokers who themselves have a conflict of interest.

“They are getting marketing advice in the form of education,” she says. “We haven’t learned anything, because we are being taught by people who are really trying to sell us something.”

Ghilarducci says 401(k)s have been extremely lucrative for Wall Street financial firms that she says have grown rich on “huge investment advisement fees and management fees over and above the return.”

Many investors confused massive the bull market of 1980 – 2000 with their own investing abilities. The answer should be a return to a pension fund like retirement plan vehicle. The plan participants only choice should how much do I need to save for a comfortable retirement.

Please comment or call to discuss how this affects you and your company retirement plan.