If you ran out of money at age 80 what would you do? Sobering but true, below are only 7 reasons you may never retire. These items should alarm you but it won’t. That’s because unless you study this stuff, and I do, you won’t see the problem or what it means to you.
I’m not a doomsday sayer. I’m just a guy watching this story unfold, and watch it get bigger. I do like the image of politicians, “kicking the can down the road.” But, really, aren’t we all kicking it down the road?
So, listen up, here’s the list of 7.
1) 10,000 Americans reach age 65 every day.
2) Companies offering Pensions has dropped from 112,000 to 23,000
3) 45% of workers cannot access employer-sponsored 401k or pensions.
4) Medicare and Social Security will run out of money by 2028 and 2034.
5) $300 Trillion dollars are owed for unfunded public pensions
6) Americans don’t save, in fact, Americans have a negative savings rate.
7) Politicians have too many competing interests, so they kick the can.
The earlier one starts to save, the easier it is to accumulate sufficient wealth at retirement. The corollary to this is that the longer a country (or an individual) waits to address these issues, the fewer options there will be for solutions, and the options that remain will become more and more difficult to successfully implement (source noted below).
The authors of the article I quote grade our current 401k system as a letter grade of “D+.” I’m not sure what the plus sign means, but I can tell you many individuals are not prepared to retire because so few have pensions (that’s what your Grandpa or Grandma had), and those with a 401k have put too little in it.
Work for a City or other governmental unit?
There is a combined $300 Trillion in unfunded liabilities for employees of these places of work. And, these employees are going to look for their retirement check and receive something like what Detroit retirees received, which was pennies on the dollar.
Your parents and grandparents retired with a pension. They received a check each month for as long as they lived, that, plus social security, made a very comfortable retirement for many people. With the list of 7, you can hopefully see you’re unlikely to retire the way you might be thinking.
You can save now, try closing your Amazon account. Or, find any other way to save. Whether you’re by yourself or at a company or government, the time to do something is now. Make saving and asking questions to protect retirement important to you. After all, I have a friend who says;
“What gets attention, gets done.”
I love these conversations, either to help you as an individual, or your employer. I am happy to help or steer you to better resources.
Building a Strong Retirement Program: One for the AGES, Benefits Quarterly, International Society of Certified Employee Benefit Specialists, Brookfield, Wisconsin; www.iscebs.org.