Ultimately It Comes Down To Accountability

Maybe the odds are stacked against us but our actions are still the important thing.

The Pension Pulse Blog took kind of a deep dive into the current state of the US' retirement mess with some of the grimmest numbers that I have seen as captured in this chart;

I have no idea about the preciseness of these numbers but there is no question that we are woefully undersaved and for as long as we've been talking about it, it doesn't seem like meaningful progress has been made.

The article frames out a couple of numbers that might be familiar which is that the average Social Security check is $1470/mo and that the average household spends $3900/mo on "basics" which leaves a gap of $2430 that needs to come from somewhere, presumably from accumulated retirement savings. Using the 4% rule (a 4% withdrawal rate is generally accepted as being a sustainable amount to withdraw without outliving your money), the numbers imply needing $729,000 to cover $2430/mo. I can't imagine a reasonable scenario where the median retirement savings get up to $729,000.

Ok, so the numbers are something that people will need to address (many ways to do this) but the article then takes a turn that I think is dreadful. Monique Morrissey from the the Economic Policy Institute is quoted as saying “The system is designed to make people feel bad about themselves — everyone privately thinks that they’re screwing up. And yet if everyone is screwing up, then it’s clearly a system flaw.” She is also quoted as saying that saving enough is “overwhelmingly impossible to do and people give up." There are also a couple of jabs at capitalism thrown in too. There might be an access issue, where many people don't have a 401k for whatever reason but anyone can open an IRA and start to put money into it. Even if someone doesn't know exactly how to open an IRA, they can Google it, find a company they have heard of, open an account online, connect their bank account and make contributions. This is simply a problem to solve, and solving it doesn't take that much time.

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