America has a retirement crisis, but it’s not what some people want you to believe it is. It’s not the defined benefit pension plans that public employees pay into over a lifetime of work, which provide retirees an average of $23,400 annually (although some public officials fail to make their required contributions to these and then claim they are unaffordable). It’s not the cost of such plans, which may ultimately cost taxpayers far less than risky, inadequate and increasingly prevalent 401(k) plans. It’s not Social Security, which is the healthiest part of our retirement system, keeps tens of millions of seniors out of poverty and could help even more if it were expanded. The crisis is that most Americans lack the essential elements of a secure retirement — pensions and adequate savings. They’ll depend on Social Security to stave off poverty once they stop working, and it will not be enough.
The crisis is that the economic collapse that started in 2007, triggered by fraudulent and risky financial schemes, wiped out many Americans’ personal savings and decimated many state and city pension investments. And while the stock market and many pension investments have rebounded, for numerous Americans the lingering economic downturn, soaring student debt, diminished home values, the responsibility of caring for aging parents and other financial demands have made it hard, if not impossible, to save for retirement.
- US – 59% are worried about not having enough money for retirement finds Gallup
- UK / One in five retiring in 2013 in poverty
- A worldwide retirement crisis is coming
- US – What can be done about the rampant underfunding of public pension systems? )
- US / Many baby boomers are reluctant to retire finds Gallup
- US / 14 years lost for preparing retirement
- UK / More than 1 in 3 will work past 65 and 35% will work past retirement age
- Pension in UK / Introduce a ‘collective defined contribution’ plan says a report