Many people believe that America is in a “retirement
crisis.” They feel that, with so many baby boomers reaching retirement age and
so few of them actually read for retirement, we’re in for trouble.
Of course, not everyone agrees with this fear. Take liberal
Kevin Drum, for example. The researcher and financial guru says that there’s no
evidence for a retirement crisis. In fact, he even went so far as to suggest
that, thanks to the use of 401(k) accounts and other retirement accounts
instead of traditional pensions, people who are soon to retire will fare
better, financially speaking, than usual.
Despite the claims of Drum and the many who agreed with his
logic, the facts just don’t fall in his favor. Research shows that, while
effective in some ways, 401(k) plans and individual retirement accounts aren’t
as beneficial as traditional pensions, and sadly, these non-pension plans are
what a lot of soon-to-be-retirees are banking on.
Another problem is that for most of the 65 and over crowd, a
huge part of their income comes from working, so when you take working out of
the equation in retirement, these people are often faced with a drastically
reduced standard of living during retirement.
Other concerns for retirees include the following:
- Recent
cuts to social security income allotments
- Low
interest rates, which equals low investment returns
- A
decrease in the availability of defined-benefit pensions
- Longer
lifespans, meaning a need for more funding during retirement
It’s easy to see that there are some serious concerns about
retirement and what it will be like for the generations to come. Right now,
people just have to plan as carefully as they possibly can and save as much as
they can. While many hope that, one day, there will be more and better plans in
place to provide for retirees, without them having to do all the work of
scrimping and saving, that hasn’t quite happened yet, so the responsibility,
fair or not, does fall on the individual.