WASHINGTON, Sept. 28 (UPI) -- Even before the recession hit in 2007, the average 401(K) retirement plan had set aside paltry sums for U.S. retirees, an economic professor said.
Investors were dismayed to find their retirement accounts lost 28 percent of their values as the stock market tanked last year. Average 401(K) figures had already proved that U.S. workers were not saving enough for retirement, The Detroit News reported Friday.
But in 2006, when the stock market was booming, 50 percent of the accounts held by account holders within 10 years of retirement age averaged $40,000 or less.
The average account in that group, if reasonably invested, would have ended up with monthly payments of $204 a month, the News said.
"That's good for dinner and a movie but it's not retirement support," said New School for Social Research economics professor Teresa Ghilarducci.
"There's not any other country that has relied on a voluntary system of retirement savings. The 30-year experiment with do-it-yourself pensions is a failure," Ghilarducci said.
Nancy Hwa, a spokeswoman for Retirement USA, said, 401(k) plans were "never even intended to be a retirement plan."
"It was a tax shelter for end-of-the-year bonuses for bankers," Hwa,said.