• There is another insidious aspect of 401(k)s. You can’t get any real return on debt instruments, and there is a real fear that bonds are going to tank whenever interest rates rise (2014?) That pushes people into stocks.

    Return on stocks is riskier and no sane person believes that the stock market is fair to small investors. Even if it were, there is a deep problem. Return on stocks come in the form of capital gains and dividends. CEOs don’t hold much stock, but stand to profit from a rise in the price of the stock. That discourages dividends and encourages steps to increase the price of the stock.

    Management’s incentive is to increase stock prices by any means possible, including such wasteful practices as stock buybacks, buying up competitors and small upstarts that threaten the brand; attempting to gain a legislative monopoly; and a host of other legal or not so legal steps.

    Retirees and those who hope to retire are dependent on the survival of these dysfunctional practices.