US retirement confidence at 23-year low

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The percentage of Americans who are confident that they will have enough money for a comfortable retirement is the lowest in 23 years. According to the latest Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI), 49 percent of workers are either not too confident (21 percent) or not confident at all (28 percent) that they will be financially comfortable when they retire.

While workers are bombarded on a daily basis by economic “experts” on the morning talk shows and cable news with tips about planning “responsibly” for retirement, for many people the economic reality is increasingly bleak. Many households are struggling to pay for basic necessities and are unable to put aside adequate savings—or anything at all—to ensure a secure retirement.
A sizeable percentage of workers have virtually nothing put aside in savings accounts, 401(k)-type plans, or investments. Of workers surveyed, 57 percent report that the total value put aside for retirement is less than $25,000 (excluding home values and defined benefit pension plans). This includes 28 percent who report having less than $1,000 in savings.

The percentage of workers who report having saved for retirement now stands at 68 percent, down from 75 percent in 2011. This decline is found almost exclusively among those workers with household incomes under $35,000. Among this low-income group, the percentage of workers saving for retirement has fallen dramatically—from 49 percent in 2009 to 24 percent in 2013.
Only 50 percent of workers say they could definitely come up with $2,000 if they were faced with an emergency. Close to a third of workers surveyed—28 percent—believe they probably or definitely could not come up with this sum.
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http://www.wsws.org/en/articles/2013/03/20/reti-m20.html
 
401K's aren't a failure, and at least it's something that companies contribute to (for the most part). Pensions are just out at this point, and I don't think they'd be that much better anyway.

Cost of living is a bigger issue. If you want to maintain a certain lifestyle, you have to set those goals and take responsibility for it - if 401K's aren't enough, then supplement with savings & investments of your own.
 
cawacko said:
I'd be interested in reading it later but don't have time at the moment. Can you offer a cliffs note version of what it says?
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Basically, most people don't participate in 401ks and those that do don't contribute enough. In the end, it's a huge tax subsidy for something that doesn't achieve its intended purpose.
 
People who invest long term in things like IRAs/Roths and 401Ks have been shown to come out on top for the last 60 years, despite events like the embargoes, stagflation, internet bubble, 9/11, and the housing crash.
 
Dungheap said:
Basically, most people don't participate in 401ks and those that do don't contribute enough. In the end, it's a huge tax subsidy for something that doesn't achieve its intended purpose.
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If you had power to propose a solution to Americans not saving enough at retirement what would you recommend?
 
Dungheap said:
I'd tax more and increase Social Security benefits.
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So the government shouldn't encourage, via tax credits, people to save money but we should increase the amount the governement saves for us through S.S. is how I'm understanding your position.
 
For me, as long as we're sticking with our current tax system which has thousands and thousands of exemptions I think 401k is a great program that more people need to take advantage of.

When I used to volunteer with Junior Achievement of the Bay Area and taught a seniors high school economics class once a week I used to try and pound into the kids heads about the power of compound interest and why they needed to start saving in their 401k and early as they could (especially if their companies matches or donates). The kids would ask good questions such as what if I can't afford to start saving today? My response was always there is never really a good time to start saving because unless you are very well to do money will always be tight. I said go through your budget and see if you have any expenses that you absolutely cannot live without. If that is really the case then maybe saving right now isn't for you but my guess is most can afford to save a little and still be fine. Of course to teenagers social security is pretty much a foreign concept (so far out in the future) but I told them as well you cannot sit back and expect S.S. money to be all you have.

As long as the government continues to back the program more people need to take advantage of it imo.
 
If instead of foregoing tax revenues the government collected taxes and paid them out to individuals' 401k account with the same distribution as the 401k tax expenditures, I don't think there is a politician alive that wouldn't blush at proposing it. It'd be a non-starter.

It'd be a program that gave rich people that don't need it lots of money for retirement and poor people that do need it nothing at all.
 
cawacko said:
For me, as long as we're sticking with our current tax system which has thousands and thousands of exemptions I think 401k is a great program that more people need to take advantage of.

When I used to volunteer with Junior Achievement of the Bay Area and taught a seniors high school economics class once a week I used to try and pound into the kids heads about the power of compound interest and why they needed to start saving in their 401k and early as they could (especially if their companies matches or donates). The kids would ask good questions such as what if I can't afford to start saving today? My response was always there is never really a good time to start saving because unless you are very well to do money will always be tight. I said go through your budget and see if you have any expenses that you absolutely cannot live without. If that is really the case then maybe saving right now isn't for you but my guess is most can afford to save a little and still be fine. Of course to teenagers social security is pretty much a foreign concept (so far out in the future) but I told them as well you cannot sit back and expect S.S. money to be all you have.

As long as the government continues to back the program more people need to take advantage of it imo.
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I agree with all of that. I just think it's a stupid program.
 
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