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Disillusionment among American Retirees – Does that Mark the Death of American Dream?

Disillusionment among American Retirees – Does that Mark the Death of American Dream?

It seems that the American retirees are bleeding in distress. With the experiment on 401(k) becoming a failure and Social Security going bust, the normal savers and the baby boomers haven’t saved enough and hence don’t have the right means to enhance their situation and get back on track. There seems to be gross instability and insecurity in the retirement industry and things look extremely bleak and sluggish for those who are nearing their retirement. For the Generation-Y, obtaining fiscal security during their golden years seems to be a useless and hopeless idea altogether.

Data from the Federal Reserve show that 35% of people who haven’t retired yet and 20% of the 55-65 aged adults who are nearing their age for retirement have no amount of post-work savings or private pension plans. The older baby boomers who are approaching retirement also find they have insufficient savings despite having worked for companies and employers who had offered conventional pensions rather than the 401(k) savings plans. No matter how rhetoric it may seem, here’s how some facts and statistics play out.

Facts and statistics on Pension

  • Majority of the companies have relinquished their roles which they once upon a time played in supporting the retirement accounts of employees by providing them the benefits of pension plans. Not only so, the companies even offered them definite contributory plans like 401(k). But this kind of retirement-assistance is gradually becoming a thing of past.
  • Apart from the companies who are doing away with the system of pension, those that offer pensions, are all upside down and they are suffering from a dearth of adequate funds to pay the employees their promised amount. The institute which is designated to insure the underfunded pension plans is itself underfunded.

Facts and statistics on Social Security

  • The Social Security program was created with the intention of being a safety net for people but due to the changes in financial conditions, it has become the primary resource for finance among the retirees.
  • The excess funds that were obtained during the time when the generation of baby boomers paid in, is now being leveraged to bridge the gap of the shortfall among the younger generations. This is also anticipated to run out by the year 2034 and that will cut down the ability of the system to pay benefits by even 25%.

Facts and statistics on 401(k)

  • There are some big shot financial companies which have filled in their company 401(k) plans with underperforming and overpriced funds and also offered very little in the form of education for the common masses.
  • There has been an effort since the last 6 years to ensure that the monetary analysts who handle retirement assets should act in the best interests of the clients. The political and corporate movement for the firms to regain the lost profits if they were forced to take the correct step by the clients.
  • Some people who at the beginning conceived the 401(k) concept and gathered lobby for it have revoked their support, regretting that they ever started.

So, how does that feel now? Which stage according to you, are you standing at? Well, to be frank, you’re definitely not in any good stature now. Retirement is deemed to be a 3-legged stool where each leg is Social Security, pension and personal savings. In the present financial state, retirement seems to be a single stick without the foot peg. Then does that call the end of the American retirement dream?

There’s still hope for a comfortable retirement

While we are busy comparing the previous generation with the present one and claiming that the current retirees are worse off now than their older counterparts, if we can forget the situations which make the condition worse today, we can’t ignore the fact that things were even worse then.

You, being an employee, your financial well-being were never the first priority of a company, whether you consider then or now. The for-profit companies were never altruistic to the extent that they would ensure the future and the present fiscal stability of their employees. This was the same then and even now.

Yes, your Social Security might be in some sort of trouble but it is also backed by an agency which prints money. The young generation should predict to see the age at which they can get a rise in Social Security, the amount to be reduced in case they have higher income during retirement.

Henceforth, if you wish to keep your retirement dream alive, you should keep saving money in your savings account and emergency funds. One more thing to continue is to keep contributing to your workplace retirement fund in case you have any. Rein in your expenses and try to live within your means to stay on top of your finances.

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