The media regularly carries stories of the struggles faced by those trying to save for a secure retirement. Employers are rapidly shifting away from defined benefit plans, in which employees were assured a certain level of retirement benefits based on years of service, in favor of defined contribution plans, such as 401(k) plans, in which an employee’s retirement income will be derived from the accumulated contributions made to her account. Many defined contribution plans are self-directed, meaning it is the employee who selects the investments for the account, usually from a number of options selected by the employer.

Realistically, however, many Americans lack the discipline to regularly and systematically save for retirement. Even those who do save and plan for retirement often have no meaningful understanding of how to manage their investments. In addition, investors are faced with an often volatile stock market, lack of transparency on the fees and costs to which their retirement dollars are being subjected, and poor investment management and advice by supposed Wall Street experts. Efforts to address some of these systemic issues are often met by vigorous resistance by the financial industry—witness the continuing failure to implement regulations requiring that a uniform fiduciary standard apply to all financial professionals who provide personalized investment advice.

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