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There's a story -- they're not getting a lot of attention the day -- you need to hear about particularly if you care about your retirement.
IBM overhauling its retirement programs instead of contributing to its employees 401 -- over time.
The company will opt to contribute a lump sum payment once a year.
Now this not sound like a big change but the move undermines the very idea of retirement savings.
What the attraction of a 401K is the idea that you level out what you pay for investments over time.
But stock prices go up they go down but over time as advisors say -- average out your -- and your costs that college dollar cost averaging.
But with IBM's new plan the advantage largely disappears.
This wouldn't be such a big deal but IBM is considered a leader in employee benefits the company blazes the trail with innovative policies.
And other big companies are sure to follow IBM to -- Now look to be sure shareholders may like the move with -- it will save the company millions of dollars a year in compensation expenses.
But employees who are close to retirement and desperately trying to make up for losses from the Great Recession they're not gonna be so happy.
And also one thing we should say to be fair here at least IBM has a 401K plan and they are contributing to it.
But I -- to make sure we jealously guard every advantage the small investor has here that's why I'm talking about it today.
And that brings me to the investment company institute and -- press release this week which frankly was a stunner.
The Investment Company Institute it's a trade group representing mutual funds and other investment companies whose products we all used to grow our mutual fund balances.
They say after an examination of research and data at the group gives its members the thumbs up on the job gets done helping Americans prepare for retirement.
Well done ICI's telling its members.
Americans are struggling in their efforts to put together adequate retirement savings.
True total retirement dollars have risen over the nearly thirty years the trade group study but.
You expect that because many households lost the benefit of company sponsored pensions and were forced to start saving on their own.
We need to look at that cold hard reality.
The majority of Americans some 75%.
Have less than 30000 dollars in their retirement accounts back in 2010.
The savings -- by the majority of middle class seniors won't support their current standard of living.
Incident clapping each other back need to get serious series about what eventually will be retirement catastrophe if we don't do some different.
Applying IBM's move because it save the penny or two -- EPS.
To big fat mistake.