Personal Finance 

Frontline: The Retirement Gamble

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FrontlineFrontline is a great program, I’m a big fan of their work, and a recent show focused on something that often graces the pages of personal finance blogs – retirement. It’s separated into five chapters:

  1. The Retirement Crisis – A 9:51 minute look into whether the system is working.
  2. “It Used To Be Much Easier” – 11:37 minutes reviewing how much simpler it was with pensions.
  3. “The Tyranny” of Fees – 13:21 minutes with John Bogle of Vanguard fame
  4. Are Index Funds the Answer? – 6:02 minutes looking at index funds
  5. Advisers or Salesman? – 13:26 minutes looking at financial planners

This isn’t a “behind the scenes” expose like the ones I really like (The Choice 2008 was fantastic, as was Bush’s War) but instead is more like a “here’s what retirement investing is like today” that anyone can watch and understand. If you read a lot of personal finance blogs and keep yourself regularly informed about this subject, you won’t hear anything new.

If you, or someone you know, don’t keep that up to date on things or just need a refresher, this is perfect for you. You’ll leave understanding the landscape today and the biggest topics facing retirement investing today – fees, index funds, and the reality of financial advisers.

Here’s the 53:41 minute program in all its glory:

Watch The Retirement Gamble on PBS. See more from FRONTLINE.

{ 6 comments, please add your thoughts now! }

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6 Responses to “Frontline: The Retirement Gamble”

  1. While accurate about pensions being “easier,” it’s pretty reckless to push the idea that easier=better.

    My grandfather was a title lawyer with a firm that had been around for a century by the 1980s. He had the option of taking a pension or doing his own retirement savings. He chose to do his own investments. It was a good thing, too, because within 5 years of his retirement, that century-old established firm was GONE. Every person who had a pension with them lost it.

    Pensions only last as long as the companies that pay them. Period. It’s one thing if you have a pension from the state or federal government, but if you’re counting on a pension from a private company, you’re making a dangerous gamble. Companies have never, ever been so stable that most people should depend on them.

  2. DIY Investor says:

    I wrote a post on this documentary and agree that it was very well done. My complaint is that it didn’t go a step further and say something about what can be done. There are ways that most investors can optimally use their 401(k)s by properly allocating and choosing low cost funds. Instead the documentary will likely get many to throw their hands up and use it as an excuse to not save for their retirement.

  3. freeby50 says:

    Jenny, No. Generally private pensions are covered by the PBGC and if the company fails then the pension will be taken over and guaranteed by the PBGC. PBGC insures pensions similar to how FDIC insures banks. It was started in 1974 with the passing of the ERISA law. So it would have been in effect during your grandfathers time too.

  4. That Frontline show was great. I particularly enjoyed Vanguard founder John Bogle, of whom I’m a big fan. His discussion of the impact of fund management fees was really compelling, and damning (of Wall Street).

  5. Miserly says:

    I find it disturbing that in this day of digital access, people still plead ignorance of financial issues. The responsibility is each persons. Stop tweeting, stop posting, stop playing games on-line; you work for 40 or 50 years and put in 2000 hours per year or more to earn enough to live on for 40 or 50 years. Look at your investment account as another part of your professional responsibility, one that you plan to live on for the last 25 or 30 years. Put in the time, learn the facts and make the right choices, not the easy ones.

    • Les says:

      Right on. I personally thought this was a terrible episode of Frontline. While it’s normally a very in-depth and educational program, this episode passed over every opportunity to educate the public and resorted to the sensationalism that I expect of more mainstream news shows.

      The guy they interviewed saying “how are we supposed to know that EXP ratio is a fee” made me laugh, but rather than explaining that it stands for expense ratio, they took the position that the mutual funds are out to cheat us. And the questions the interviewer asked the Fidelity representative were loaded and biased. If your fund is beating the market, you’re probably happy to pay a higher fee, and that’s your choice as an investor. But the sob stories about the folks that were surprised to find they had fees to invest, well shame on them for choosing to be ignorant about what they’re buying. The program had the perfect setup to explain front-end and back-end loads, but it passed on that opportunity — again blaming the mutual funds for not treating us like children.

      These people with high fee mutual funds should be complaining to their 401k fund administrators in their company to give them better fund choices that don’t have load fees, but I don’t have much sympathy for them. Minimize fund fees is a smart choice, but I think they could have made that point without coming across as an advertisement for Vanguard.

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