Often considered an empowering way for employees to save for retirement, 401(k) plans began losing popularity with the recent bear market and took a harder hit after the Enron debacle. With stock prices declining, many employees face an uncertain retirement with no savings cushion to support them. Wolman, formerly Business Week's chief economist, and writer Colamosca say that 401(k) plans have always been an unfair deal for employees, but they're only now receiving negative press because of the Enron scandal. In fact, they believe the vast number of Americans counting on their 401(k) and other retirement plans will almost all be disappointed, and the country's economy is likely to suffer because of the overreliance on these plans. "In effect, 401(k)s ask American workers to ape the investment behavior of the rich, even though they obviously do not have the resources to ride out bad markets of the kind we believe will prevail for the next decade." According to Wolman and Colamosca, the plans don't offer enough investment choices, and corporations reap substantial tax benefits while workers often end up with sizable tax bills related to plan withdrawals. Using historical references, the authors explain the stock market and common misunderstandings about retirement plans in easy-to-understand terms. Alas, the book's most important and practical part disappoints. Advice on alternate investment options for retirement is squeezed into two chapters. The authors' case is persuasive and will undoubtedly generate debate, but many readers, especially those whose portfolios have shrunk, may lament the lack of detailed investment counsel. Agent, Joe Spieler. (June)
Forecast:Given the continuing publicity regarding Enron, and Wolman's reputation as a leading business journalist, this book is likely to generate media attention. Early sales are likely to be strong, but whether they'll continue is uncertain.