Retirement Readiness? ... Not Hardly

We oldsters know that old age happens faster than we ever dreamed possible.

That said, too many of us acted as if we never were going to get old during our younger years.

And that's especially true with respect to setting enough money aside for retirement and thereby being able to cross one worry off our lifetime list.

So how bad is it, you ask?

Many Americans are not prepared for retirement: Fed survey has the not-so-pretty details:

"Many U.S. households are not prepared or even planning for retirement, according to a new survey released by the Federal Reserve Thursday.

“When it comes to planning and saving for retirement, the survey results tell a somewhat cautionary tale,” the survey concluded.

Despite the shift from pension plans to 401k plans, which has placed responsibility on the individual to plan for his or her their retirement, only about a quarter of those surveyed appear to be actively doing so.

Here are some stark facts:

• Just under a third of non-retired U.S. households reported having no retirement savings or pension, including just under 20% of households aged 55 to 64.
• A quarter of the respondents said they had done no retirement planning at all.
• Of those who have given some thought to retirement planning and plan to retire at some point, 25% didn’t know how they will pay their expenses in retirement.

Even the concept of retirement seems to be losing its luster. Among those ages 55 to 64 who had not yet retired, more respondents said they expect to keep working “as long as possible” than households who said they plan to follow the traditional retirement model of working full time until a set date and then stopping working altogether."

Summing Up

When I began working for a living long ago, pension plans were the norm.

As individual employees we didn't have to be concerned with saving and investing for our retirement income security, assuming we kept working at good jobs during our working careers. At least this was how it began.

Over time, however, things changed in the private sector as individuals were given responsibility to make our own saving and investment decisions.

As a result, 401(k) defined contribution plans with a lack of guaranteed retirement benefits replaced the previously guaranteed defined benefit pension plans.

Meanwhile, most public sector employees still receive guaranteed pension plan benefits as the normal practice.

Thus, today the minority of American workers who are employed in the public sector continue to receive guaranteed retirement benefits which generally are better than the lack of guaranteed benefits provided by the private sector.

That curious and essentially unfair situation where the minority trumps the majority won't last much longer. At least that's the way I see things developing.

As a result, We the People, all of us, need to get busy getting educated about our personal financial affairs and responsibilities, because big brother government won't continue to foot the bill indefinitely for public sector employees.

Finally, and as the Fed Survey makes clear, far too many private sector employees continue to ignore reality and neglect their future retirement income needs.

No, the young aren't going to pay our bills to the exclusion of their own well being and that of their families, and taxpayers aren't going to provide better and guaranteed retirement income benefits to public sector employees for much longer either.

Big changes lie ahead, so it's best to follow the advice of Boy Scouts everywhere; "Be Prepared!"

That's my take.

Thanks. Bob.