Friday, November 4, 2011

Retirement Crisis

Reuters has an absolutely devastating look at the retirement crisis facing Americans. If you read between the lines, the article makes the point that Americans are increasingly on their own when it comes to preparing for retirement.

As it notes:

There are multiple reasons for reversals in gains in fighting elderly poverty, including the impact of the financial crisis on stock prices and interest rates, the end of many traditional defined-benefit pension plans which provided people with a guarantee of retirement income, and the bursting of the U.S. housing bubble. But the trend is in line with statistics showing that median household income fell last year to levels not seen since 1996.

Huge numbers of older Americans are likely to fall below the official poverty line in the coming years, said Jack VanDerhei, research director of the Employee Benefit Research Institute (EBRI).

The question then for policy-makers is how do we help? With pensions a thing of the past, Social Security uncertain and the housing market no longer a path to the American Dream, what can we do to make sure Americans retire secure.

Interesting ideas noted on this blog include automatic enrollment into 401ks, auto-matic IRAs, better finanical literacy and more access to qualified, financial professions who can ask Americans difficult questions and help them in their planning.