The 401(K) Story: Undertold or Oversold

4 Pages Posted: 2 Jan 2008

Date Written: January 1, 2008


A speech entitled The Under-told 401(k) Story was delivered on May 2, 2006 at the annual conference of the Society of American Business Editors and Writers in Minneapolis-St. Paul, Minnesota by Vanguard Chairman and CEO John J. Brennan, in which he both examined various ostensible myths regarding traditional retirement income plans and explained why a well-managed 401(k) plan will effectively meet employees' retirement needs.

In support of his contention, Brennan offered two benefit illustrations. One pertained to a 401(k) plan participant now age 44 and one regarded a plan participant now age 22. While others may reply to Brennan's myth commentary, this paper will simply examine the retirement mathematics Brennan uses to support his argument that 401(k) plans will effectively meet employees' retirement needs; i.e., that such plans will reasonably retire employees in dignity.

Keywords: 401(K),erisa, retirement, fiduciary

JEL Classification: C53, D31, D63, E21, G18, G23, G28, J26, K00

Suggested Citation

Hamilton, Brooks, The 401(K) Story: Undertold or Oversold (January 1, 2008). Available at SSRN: or

Brooks Hamilton (Contact Author)

Brooks Hamilton & Partners ( email )

5353 Keller Springs Road
Dallas, TX 75248-2763
United States
972-839-5260 (Phone)


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