Documentary spotlights looming retirement crisis
Retirement Revolution looks at the history and current crisis facing retirement policies. What's your view?
From Ron This article only addresses the lack of savings, which is indeed an issue. However, there's another issue which I think is related, and that is the lack of knowledge by most people on what to invest in. I have a nice 401k, in that my employer matches $ for $ the first 6%, however most employees are bamboozled by the investment options. We have no targeted retirement funds, just a jumble of various small-large cap and growth/value funds and two bond funds. Managers are advised to give no direction, out of fear of future litigation. So, people are left to manage their own retirement with no skills or knowledge on how to do so. The company's direction is basically "good luck". There needs to be more instruction, or perhaps your investments default to a targeted retirement plan, unless you opt out in writing. I see many people making horrible choices (market timing, 401k is 100% in company stock, etc).
Though the libertarian in me hates to say it, I think some of it needs to be more compulsary, maybe banning loans against 401k's or allowing cash out's during job switching, some type of knowledge test required to self-manage investments, and other protections. People do seem to often be their own worst enemy here.
I have no sympathy for the non-savers, but for those who sacrifice to save, only to lose much of what they could have had due to poor investment decisions because they simply didn't know, we need a better plan.
From John, Rapid City, SD I find the attitude that the "Baby Boom generation" is resonsible for all the ills of the retirement system infuriating. I am on the leading edge of the Baby Boom generation. I didn't receive tax deductions for my childrens education or pell grants, I paid cash. I didn't get tax deductions for child care, I had to pay for it. Now you tell me I should not take advantage of a system that I supported for 45 years during my employment. I new my contributions were supporting the WW2 generation and thier comfortable retirement. I beleive the real vilian in the Social Security/ Medicare problem are our representatives in Washington. They have routinely spent the SS Trust fund surpluses on earmarks and pork barrel projects to undermine the American public. I'm supposed to live frugally while Washington lives the high life? To paraphrase a saying, "Congerssman heal thyself.
From Marty, Naperville, IL Retirement is in jeopardy for those who don't save, period. We live in the age of the "Do It Yourself" retirement plan. Many people who haven't prepared will not be able to retire at 65 but that is not the end of the world. My father-in-law worked into his 80s at a job he loved and my mother-in-law worked into her 70s because she had to. If you want to retire, save early and save often.
From Bill, Rochester, NY While I agree that most people are not trained in or disciplined enough to follow good financial planning I think retirement is jeopardized in other ways. Personally, I will end up working until I die just because of out of control health care and long term care costs.
I have a reasonable amount in investments for my age and a goal that is attainable for money but the whole plan is blowing up in the face of these uncontrolled costs. For young families the same problem exists around spiralling college education costs in a society where more and more education is required for each generation to succeed.
Most households are now reaching tilt on finances due to lack of saving but the long term looks even worse due to these upcoming costs in their lives.
From Nick, Milwaukee WI Looking at the original question, I think retirement should be more of a dream/goal and a little less of a right in this country.
Before SS, you worked until you couldn't any longer, then your kids took care of you. SS made a mandatory age to get younger people employment.
Why in this day and age should people retire at 65? Back then most people only lived a few more years, now the average 65 year-old is expected to live nearly 15!
I personally think that the Social Security age for benefits should remain pegged to the average life expectancy, so it should be around 77 for healthy workers. The disability portion should remain, so anyone unable to work is taken care of – we shouldn't just abandon the elderly and infirm, but if you're healthy enough and haven't saved enough money to live off your own savings, you should continue to work.
I'm in my late 20's now, and save 14% of my income while my wife stays at home with our 2 kids. I expect to be able to 'retire' from my first career at 65, then move on to a 'profitable hobby' part time.
And I fully expect to take my wife out to eat every month at McDonalds on the Social Security check we receive, because that's all I'm planning on from the government.
Government wasn't designed to take care of us, just to protect it's citizens and their rights (Life, liberty, and pursuit of happiness – I don't see any guarantee of a comfortable retirement).
From Ben The best thing I ever did was getting hired(at the age of 22) with a company that has a mandatry 7% contribution and then guarantees a 7% interest rate return on it plus a 225% employer match. I'll be sitting pretty when I retire at the age of 46.
From Tim Monroe, MI It is an unfortunate fact that the people who have planned will end up paying for the people who have not. Just look at the bill going to through Congress right now to bail out the foreclosures. The Government has never been smart enough to make people take care of themselves. If we could ever reach that point then we would not need the government.
From Paul, Seattle WA Education is always a good thing, but educating the public about effective ways to plan for retirement is not going to change most people's behavior. To fix the problem, savings has to be mandatory.
The easiest fix IMO is to just expand the 401k/Thrift Savings plans and make a reasonable contribution level mandatory. I think corporate taxes should also include bigger incentives for companies to make a significant match to the 401k.
If people were required to contribute 10-15% from the time they get their first job until they retire, most people would automatically wind up millionaires with zero effort spent on retirement planning.
From joel lopez, houston, tx It seems everyone in America is losing their defined pension plans to lower cost 401ks, that is everyone but local, state, and federal workers. It is unbeleivable that we pay our hard earned tax money to fund lucrative pension benefits for government employees that 70% (probably 95% if you exclude gov't employees) of most Americans do not have. With Congressional employees, it is even worse. I wish the presidential candidates would stop demonizing industry and look in their own backyards for cost cuts.
From Jim, Chicago, Illinois People need to be better educated about retirment and investing and just have to learn to spend the time about those issues. This is equal to watching your kids play sports or goinmg to the movies. Unfortunately, what will happen is that poor planners to a certain extent will get bailed out by the government at the expense of people who planned properly. They already tax social security if you have other income over a certain limit.
Jim
In 1986, Congress changed the government pension program to a 401(K) type program that includes Social Security. No more pensions if you came in 1986 and after. But Congress added benefits for themselves and automatically give themselves raises every year.
I figure a deadlocked Congress is the best since they can't raise your taxes on change in your pocket.