Although often touted as a retirement firewall, the 401K plan has come under recent attack by many financial pundits as a pie-in-the-sky dream, founded on a dodge, finally exposed by our financial crisis for the miserable fraud that it always was. This is alarming for the millions of baby-boomers who have been trusting in deriving at least 4 percent of their yearly retirement income from their 401Ks. Is this just more fear-mongering, or is there really something to it?

The reason for this hostility is obvious enough, according to a recent Time magazine article. Whatever money you put into your 401K ten years ago, take about 25 percent from that and that’s what your 401K is worth today. You would have done better to put your savings into a savings account (at least they’re insured), or stuff your mattress with the cash. If the 401K plan is such a disaster, why do financial planners, whose job it is to devise a portfolio of holdings that they claim will keep a retiree in the black for 30 years, still advise their clients to count on this leaking bag?

It seemed smart enough when it first came out in the early 80s. It was named after the section of the tax code that permitted it. You pay into it by automatic deductions from your pay. You never get your hands on the money, so you can’t spend it. It wasn’t as though you couldn’t drop it if you wanted. If your financial condition required it, you could suspend it any time you wanted – it was your call.

I can save my own money, you might say, but there’s more to the 401K plan than forcing discipline on you. It’s better than a savings account because your company matches what you contribute. Most employers liked it better than their pension plans, which always reduced their bottom line. Most dropped those plans and took up with the 401K system instead. Unlike company pension plans, if you left the company, the money in it was all yours. Best of all, it couldn’t be taxed. The IRS does get some in the end, a levy they call it, a tolerable percentage. Your net income doesn’t include your contributions, so you’re being taxed for less than what you actually make. It was conceived as a well paid executive’s benefit, but it quickly became available to anyone who could stand to have a meaningful amount withheld from each paycheck.

That’s not as bad as you might have first thought. Yes, the National Bureau of Economic Research predicted that an average 401K plan, over the life of a career,  would provide about 50 percent of retirement income, but the truth is that today’s retirees can expect their plan to render a mere 8 percent. The reasons for this poor return mainly falls on the participant. Most didn’t contribute enough to hold the amount needed to cover 50 percent of their retirement. Poor investments in other financial vehicles required the participants to cash in early. Other investments are critical to cover the other percentage of retirement income the plan doesn’t cover. The recent crash has wiped out many of these investments, causing the retiree to draw more from their 401K than they expected. The problem, then, is not that the 401K with employer contributions won’t result in the expected savings. The problem is that other investments may well cause you to use more of your 401K savings earlier than expected in your retirement.

Yes, the 401K plan still has the potential to support a retiree in the future, that is, if enough is contributed. Raising your contribution will at least assure you that there is more to draw on when all else fails. Other schemes are being proposed, but the 401K still has a life and can still provide the income to future retirees when they’re in their golden years.

Most of us set our life and career goals while we’re still teens or in our early  twenties. By thirty, we’re well on our way to achieving those goals, and by fifty, we’re contemplating retirement. Most of us will have had an opportunity to participate in retirement plans that aim to provide retirement funds that should cover our living expenses during our retirement, that will allow us to live the lifestyle we have achieved during our working years, perhaps with some slight reduction in income that may require us to live more frugally than we did when we worked. Among our retirement goals, this is the most important and the least we should attain. For many of us, the least of retirement goals will be enough, but for others, retirement will be more than idling in the lifestyle they have achieved during their working years. For some, retirement will be an opportunity to realize possibilities that their lives before retirement could not accommodate, to realize hidden wishes and desires they didn’t have as teenagers, that came to them in the midst of pursuing careers, raising family, and establishing themselves in the world. For some, retirement will be a time to fulfill wishes and dreams.

During our working years, even if our careers are satisfying and our personal lives fulfilling, we often develop new interests, find new talents we did not know we had, discover new pleasures, new challenges that neither our careers nor our personal lives could accommodate at the time we discovered them. Between working a job, raising our family, and participating in our communities, we simply don’t have the time to take on new projects, new ventures and adventures, to fulfill our wishes and dreams. If it’s not time that prevents us, it’s the lack of funds. For those who think life before retirement age is their only chance to realize these desires, then these desires will be only wishful thinking, impossibilities. For those who recognize that there is a lot of life to live after retirement age, these desires may be deferred until then; our wishes and dreams may become retirement goals.

Take the doctor who discovered she enjoyed cooking and others enjoyed what she cooked. With a hefty mortgage and children to put through college, she knew she couldn’t drop her practice to indulge her new found joy. She wished she had the time to open her own restaurant, to do the cooking herself, to reveal in the praise of those who would eat her dishes. Instead of sighing and resigning herself to her fate, she set that hope as a retirement goal. Or consider the executive who discovered his talent for drawing. He would draw the faces of people at meetings while listening, and when those he drew saw and praised his art, he realized he was a natural artist and wished he had studied art. Rather than lament his late discovery and only imagine what life might have been had he gone to art school instead of business school, he made going to art school one of his major retirement goals. And then there was the salesman who found himself enchanted by Japan when he went on a sales mission to that land, and set his heart on living in Japan when he would retire, until then learning the language, customs, and history of his hidden love. All these examples and many others show that dreams and wishes that come upon us while we’re wholly engaged in our pre-retirement years are not doomed to being mere fantasies; they may come to life if we set them among our retirement goals.

Not all our wishes and dreams can be realized, but neither are they all to be consigned to futility. If we recognize them early enough, we can make them retirement goals and plan for them. Not all of our retirement dreams will require funding, but for those that will, your retirement plan should account for them as early as possible. In retirement, dreams can indeed come true.