For millions of Americans, the so-called golden years will actually be years of despair and uncertainty. And it’s very likely that you are one of those that will never be able to stop working and finally retire. But you’re not alone in this. Over 90 percent of working households in the U.S. do not meet retirement savings targets for their age and income. In fact, even the people that did absolutely everything right throughout their working years are still at risk of seeing their savings vanish as financial markets experience the worst downturn since the Great Recession, interest rates soar, and record inflation means the value of their money is steadily dropping.
New data shows that the country’s unfolding retirement crisis just took a massive turn for the worse. Crippling stock market losses, cracks in the U.S. pension system, and the growing Social Security deficit are all combining to create increasingly harder conditions for workers to save for retirement and maintain their living standards at retirement age. In other words, the promises that were made for all of us that we would be rewarded for the efforts we made during our years of hard work with financial security were actually a lie. In today’s America, the only options given to the vast majority of workers are: either work until you die or brace for poverty.
According to the National Institute on Retirement Security, even though employer-sponsored retirement plans are one of the most important methods of saving for retirement, 50% of private sector workers in the U.S. don’t have access to pension or 401(k) plans, and about 40% of the population has zero savings for retirement. And the vast majority of those who do have 401(k) plans do not have a solid financial cushion to fall back on. IRA data reveals that some 92% of working households do not meet retirement savings targets for their age and income. Even when counting their entire net worth, 65% still falls short.
More worryingly, 1 in 5 baby boomers that are now reaching retirement age have less than $5,000 in retirement savings – and they’ll need about 240 times that amount to be able to retire and keep pace with the rising cost of living and soaring health care costs, as noted by financial analysts at research firm Ramsey Solutions. No wonder why a third of seniors say they either plan to work through the age of 70 or never retire, according to a study by BlackRock.
The U.S. retirement system was structured so that retirees could count on three sources of income: Social Security, pension benefits, and personal savings, the expert explains. But many people expect Social Security retirement benefits to fund a portion or all of their retirement. The reality is that the program is now facing a 75-year deficit, and in theory, it was never intended to fully support workers in retirement even though 44% of retirees say it is their primary source of income, according to a survey by the Employee Benefits Research Institute.
Those resources are being depleted right now, and by 2033 the government benefits program will be only three-quarters financed, which means that we have a little more than ten years before this crisis hits its peak. And the biggest problem isn’t that people don’t want to save — it’s that they don’t have any money to put toward retirement.
Things weren’t supposed to be like this. Our population developed under the implicit social contract that if you worked hard for a company, you’d be rewarded with financial security in retirement. Of course, there were always gaps in the retirement system. But today, the social contract is on shakier ground than ever, many experts say. This crisis is going to be absolutely devastating for our society. Retirement is considered the final chapter of the American dream. But it’s clear that the dream of the “golden years” is quickly turning into a fairy tale for our hard-working population.
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Brace for Retirement Crisis as US Pension System is Terminally Broken
Retirement has always been seen as a time to relax, travel, and enjoy the fruits of one’s labor. However, for many Americans, the dream of a comfortable retirement is fading away as the US pension system is being dubbed “terminally broken”. The cracks are starting to show, and it’s time to brace ourselves for a looming retirement crisis.
One of the main problems with the US pension system is its reliance on traditional defined benefit plans. In this system, retirees receive a fixed monthly payment based on their years of service and salary history. However, due to a combination of factors such as rising healthcare costs, longer life expectancies, and low-interest rates, many companies are struggling to meet their pension obligations.
This can have disastrous consequences for retirees who were counting on their pensions to provide a stable income during their golden years. A recent study found that nearly 25 million Americans are at risk of not having enough saved for retirement, and this number is only expected to rise in the coming years.
To make matters worse, many private sector companies have switched to defined contribution plans, such as 401(k)s, shifting the responsibility of saving for retirement onto the employees themselves. While these plans offer some advantages, such as tax-deferred growth, they also come with risks. Employees must make their own investment decisions and hope that the market performs well. Unfortunately, this leaves many individuals vulnerable to market downturns and may result in inadequate savings.
Another issue plaguing the pension system is the growing number of public pension funds facing severe underfunding. Many state pension systems are grappling with high levels of debt and have failed to set aside sufficient funds to cover their long-term liabilities. This raises concerns about whether retirees will receive the benefits they are entitled to and puts an additional strain on already stretched state budgets.
The implications of a broken pension system are vast. It not only affects individuals’ retirement plans but also has broader economic consequences. As more retirees struggle to make ends meet, they may be forced to rely on government assistance programs, putting an additional burden on taxpayers. Moreover, a lack of retirement savings can potentially hinder economic growth, as older Americans reduce their spending, affecting various industries.
So, what can be done to address this pension crisis? First and foremost, there needs to be a concerted effort to educate individuals about the importance of saving for retirement and provide them with the tools and resources to do so. Employers and policymakers should explore opportunities to promote retirement savings, such as automatic enrollment in retirement plans and employer matching contributions.
Furthermore, policymakers need to tackle the issues facing public pension funds head-on. Reforms should be made to ensure their long-term sustainability and prevent further underfunding. This might include raising contribution levels, adjusting retirement ages, and finding innovative ways to generate additional revenue.
Lastly, individuals should take a proactive approach to their retirement planning. They should seek professional financial advice, regularly review and adjust their investment portfolios, and consider alternative sources of income such as part-time work or starting a business.
The US pension system is indeed in crisis, and the time to address it is now. Without significant reforms, the retirement dreams of millions of Americans will be shattered, leading to a broader societal and economic fallout. It’s a wake-up call for individuals, employers, and policymakers alike to take action and ensure that retirement remains a time of comfort and fulfillment, rather than a period of financial struggle.
I'm a Baby Boomer and German/American. My mother having survived WWII often without a piece of bread. Always stressed, "Save, invest, put something aside, one day people will again be happy just to have a piece of bread." For several years I have bought beachfront properties outside the U.S., in Central and South America as investments. At age 60, I retired from the military, and as a federal employee with no debts. Thankfully, I never forgot my mother's words, and prepared for the future!
I NEVER THOUGHT OR BELIEVED IN GOD.. I THOUGHT IT WAS A FAIRLY TALE. BUT THE OLDER I GET, THE MORE I SEE THIS WORLD AND WHERE ITS GOING, I ASK, HOW COULD I DENY THINGS ARE GETTING WORSE? AND SOME MAY SAY, THINGS HAVE ALWAYS BEEN THE SAME.. BUT THATS NOT TRUE. THINGS ARE PROGRESSIVELY GETTING WORSE AND EVIL IS SWEEPING THIS COUNTRY. I HAVE HEARD GOD IS GOOD. BUT GOD IS NOT GOOD IN THE WAY WE THINK. GOD IS NOT GOOD LIKE HE'S A NICE GUY. GOD IS GOOD IN THE ESANCE OF GOODNESS. THING ABOUT EVERYTHING THAT IS "GOOD" ITS GOOD TO EAT HEALTHY BECAUSE ITS MAKES LIFE LONGER… IT HELPS YOU LIVE LONGER.. GOD IS NOT A MAN ON THE COULDS HE IS THE DEFINITION OF GOOD, AND WHAT MAKES GOOD? LIFE.. LIFE IS GOOD LIFE IS GOD… EVIL IS BAD BECAUSE IT BRINGS US CLOSER TO DEATH.. EVERYTHING WE THINK OF THAT IS BAD BRINGS US CLOSER TO DEATH…. BAD IS SWEEPING THE NATION.. STOP WORSHIPING THE NATION, THE WORLD AND EVERYTHING IN IT…START WORSHIPING GOD BECAUSE GOD IS GOOD.
None of their system is broken it’s designed for what they want it to do it’s all part of the plan
Am Native Tuscarora look what they done to my people
Karma
Lol
I was right all these years not investing becouse I felt it would be gone when I needed it . Well here we go . I lost and spent my money but I'm not depending on other for my family's wellbeing and survival . When you trust Republicans and big business you will get what you deserve .
Its all a plan to make people depend on the government, the reason for that is because soon in order to get your SSI you will need to get an implementation on our body. What didn't we hear something about that in The Bible ?
1M decreased to 880K in one year. If that continued, barring any further investment, in 8 years that person has been wiped out. The bottom line is this: the cost of living will not permit the average person to get ahead, regardless how well you are doing right now. And when I say, "get ahead", I mean do well enough to retire comfortably and not work.
If you honestly sit and listen to the figures that he gives, look soberly at where you are without wishful or magical thinking, look at how the cost of living has steadily increased over the years and accelerated recently, and the economic state of the most affluent countries in the world, how can anyone honestly look at all of that and not admit that there are extremely tough times ahead for the great majority of us?
Just an idea for you to consider: Why don’t you tone down the sensational titles? They are a bit too much!
Rather than “prepare for starvation,” it would be more appropriate to say prepare for higher food prices and decreased supplies. (It gives you more credibility!)
Keep on sending imagrants away ,you were going to starve anyway!!! Reps trying to scare the shit out of people. We have to pray that the war ends soon . I know, you guys think that sleepy Joe caused the whole world to economically go wacko , reality is that you found the CRACK PIPE again.
The number of US residents Permanently moving overseas is steadily increasing. Here are some examples of typical US costs: monthly rent 1 bedroom apt $1700, monthly health insurance premium ( family) $1000, monthly daycare for 1 child $1000-1500, beyond these very basic expenses there are utilities, gas, food, car payments ( best avoided) and other expenses. Life in the US has become increasingly unaffordable. The number of households with 2 working parents keeps rising, they Need 2 incomes to meet their expenses. The number of single adults with more than 2 jobs including " side hustles" such as Uber is higher than ever. The times of 1 job and a decent quality of life are disappearing.
Even worse, there is a growing number of people struggling to support themselves, save for retirement, save for their children' s college ( often starting when they are infants), pay off their Own student loans AND support their aging parents! Their parents cannot afford the $5000- $10,000 for nursing home care. Long term care policies are becoming increasingly unaffordable as the number of insurers has decreased by 90% and they can raise premiums drastically at any time to force people to drop coverage as they get older. Buying these policies in your 50s to save money fails as they can ( and do) raise premiums drastically.
Research the expat trend, residents moving to very decent locations overseas such as Spain or coastal Mexico where they can live very comfortably for less than $1500 per month Including rent and healthcare.
This is all by design, the goal is to replace freedom loving, free market economy Americans, with obedient 3-4th worlders whom do not care about freedom, just free shit!!
If you are a white American, guaranteed you will work til you drop, everyone else…. They get to party and live well at your expense, such as illegals, and refugees!!
Prepare to retirement in 15 year's OR Prepare for another great recession? RECESSION AND DEPRESSION! Prepare never fear!
Only if republican's get in and make the cuts they have wanted for years! Vote blue.
At Stock market, prices of share are fluctuating daily many times. You may consider this system equal to gambling.
The real stock market share rate value is on the basis of factory/ corporate paying investor yearly dividend upon making profits.
If a person is making $4000 per month to make his living, and upon retirement getting $ 1000 or $1200 per month, he cannot have same standard of living with lower money.
WTF is going on with the gloom 'n doom music track in the background? Survey says… CLICKBAIT
Since the 1960's congress has taken $2.9 trillion, that's right $2.9 trillion dollars from the coffers of the SSI Social security. They have not paid this back or any interest. It all started by the needs of a little man (crook) named LBJ Lyndon B Johnson fighting his no plan little war in a faraway place called Vietnam. Pensions have disappeared because companies went from management to shareholders. This is when workers were vested in the company and owned stocks, prime example. One of the most successful companies. UPS, UPS had what they called a Thrift plan, this was a internally vested by employees. This Thrift plan allowed UPS to borrow from within itself to acquire what was needed. Since UPS went to the stock market, no more Thrift Plan. In terms of pensions other than SSI, in the 1980's over 20 percent of workers were union pensioned and today only about 10 percent. So taking companies to shareholders, snubbing workers and they only have 401k, deregulation of industries and basically breaking the unions, well you can see how this all started. And yes, millionals are not smart enought to understand pensions or savings, they spend because theor parents lived in the decades of acce$$.
Easy Peasy. 8% Inflation wipes out 1/2 of your pension and savings in just 10 yrs. 100 /50 /25 /12.5 The real reason companies stopped issuing defined benefit indexed pensions. US greenback is virtually worthless toilet paper. 2 more years of this before the end.
This is Biden's great economic plan, destroy your saving.