By Pamela Yellen and Dean Rotbart
SANTA FE, NM – Officially, neither the U.S. government nor the retirement planning industry keeps count of how many American employees entrust others to decide for them how and where to invest their hard-earned retirement savings.
Nonetheless, there is evidence that the number of these so-called ‘zombie investors’ – those who shuffle forward without using their brains – may already exceed 15 million individuals and is on a sharp upward trajectory.
The march has been fueled by a Greek chorus of government regulators, Wall Street executives, financial planners and media commentators who regularly opine that only by delegating the task of retirement investment to others can individuals assure the optimal long-term preservation and appreciation of their nest eggs.
“Effective management of a retirement portfolio can be a challenging task, requiring significant knowledge and commitment of time,” cautions the Securities and Exchange Commission.
Thus the SEC and the Department of Labor have instructed employers to offer their workers a variety of defined contribution retirement plans, most commonly 401(k)s, “designed to make it easier for investors” to avoid the headaches and inherent risks of managing their own retirement monies.
Easier, indeed! But wiser and less risky? Often not
Such full-faith reliance on administrators and funds managers is propagating gargantuan portfolio losses that could billow to hundreds of billions of dollars during the lifetimes of the current generation of U.S. workers.
Already many Americans believe that by the time they retire the Social Security system will be bankrupt.
But what wage-earners have yet to comprehend is that many of the personal retirement accounts they are paying into annually at work will – regardless of how the markets perform over the
coming decades – stealthfully bleed each employee of tens of thousands, even hundreds of thousands of dollars that could remain theirs
