The reason for that is they didn't invest enough, made poor choices, drew it down while trying to find another job, or got nailed by high fees. What is the alternative? In-trust your retirement with the state? The federal government is trillions in debt. Many states are broke as well. Should folks be forced into financial contracts like they are trying to do with Obamacare? The 401K is the best solution. If taxes were low enough, you wouldn't need specialized retirement accounts..
No, most of them did not invest enough.
1. They were ignorant of the need and had no idea what is required for retirement.
2. They were actually sold a bill of goods because the “deal” they got with the 401 in almost all cases was a reduction in cost for employers and a pay cut for employees. Most could never make up the difference by saving.
3. They don’t understand risk in investing and most everyone else doesn’t either.
4. You imply spending the 401 is a bad choice because of unemployment? Guess you’ve never been faced with that choice.
Not many states are broke, most are and can’t fund their long term obligations. Obamacare will just make that worse.
I do know that the 401 has been a boondogle for the financial community since they make money on all sides of trades, are dealing with unsophisticated investors, have destroyed bargaining power present with large retirement funds etc.
I really don’t get your drift from your comments. I’m not advocating any of the alternatives you suggest.