According to a recent study, one in two American families is not prepared for retirement. Why?
- Problems with social security
- Employee pension plans shrinking
- People are living longer so retiring at a young age costs more
- Most importantly, People are not saving enough
How can we fix this problem? I hate to write an article that is really bulleted, but here are some possible actions we can take to fix the problem:
- Americans need to SAVE MORE MONEY
- The US government needs to take serious action to revamp social security
- People need to work longer… early retirement will no longer be an option for many
There are a couple problems that we can’t fix. First, as Americans are becoming less healthy, they are becoming more and more likely to have health problems that force them to retire from their jobs early. If someone is betting on retiring early and hasn’t saved any money for retirement, they could be screwed.
Secondly, the market will not always return X% on investments, so even though many people are saving for retirement by investing their money, there is a chance that these people could be screwed over and need some help from the government. That is what social security is for. Thus, the government needs to be very serious about fixing this problem because some people that are very careful about their retirement savings accounts could still be in need of help.
In conclusion, both American citizens and the US government to make an effort to be less short-sighted. There needs to be an effort to educate Americans about IRAs and other retirement accounts, and about the value of compound returns. This needs to be done at a young age (elementary school) and reinforced through high school. The US government needs to make a serious effort to solve the social security puzzle. If these things can be accomplished, we can avert a gigantic disaster of people retiring without savings.
Thanks to Lance for sending me an article entitled: Study: Grim Retirement Awaits Many.
