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URL:  http://boards.fool.com/so-if-thats-whats-wrong-with-the-401k-who-29795395.aspx

Subject:  Re: Secrets of the 0.2% Date:  1/22/2012  8:01 AM
Author:  ferjen Number:  69957 of 75381

So if that's what's wrong with the 401(k), who are these super-rich among retirement savers who have managed to make the system work -- and what are they doing differently? They don't necessarily have higher than average salaries or the investing IQ of Warren Buffett, VanDerhei says. "The one characteristic that differentiates the winners from the non-winners here is contribution rate -- a high percentage of those million-dollar savers had constant participation and high contribution rates," he says.

I think this paragraph is key, along with this one:

Even some 401(k) providers don't disagree. With traditional pensions, employers hired teams of experts to make the kind of tough investing decisions now entrusted to individual employees, says Catherine Golladay, vice president of participant services for Charles Schwab. "Left to their own devices, most people do not have the knowledge or the ***discipline*** to do this themselves," she says.

FWIW, the article states:

The rule of thumb, advisers say, is to accumulate enough to be able to replace 75% to 80% of one's income in retirement, without -- ideally -- having to draw down more than 5% of the balance per year.

and then:

Bedda D'Angelo, president of Fiduciary Solutions in Durham, N.C., says one of her clients amassed $6 million in her 401(k). An executive at a pharmaceutical company, she maxed out her pre-tax contributions each year, and including after-tax contributions saved close to 30% of her earnings annually. She was the kind of person who never had debt -- not even mortgage debt, D'Angelo says. "She was a disciplined saver, whenever she got a bonus -- she would invest half of it." Her plan had a mix of large cap, small cap, international equities -- and a bit of bonds, and at 56, when she retired, she was earning $450,000.

So, 5% of $6 million is $300,000. $300,000/$450,000 is 66%. This is less than 75%, so I guess her client failed. :-)
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