Hat tip to occasional links and commentary.
I’m thankful that I’m the age I am (76). I have Social Security, a company pension and savings. But President Obama has made it acceptable to whittle away at Social Security, company pensions are becoming a thing of the past, and saving money is easier said than done.
I was able to save money because I had no medical emergencies, no children to put through college and, most importantly, steady employment all my life. Very few young Americans will be able to live the kind of life I led. They live from one short-term job to another, saving money and then spending it throughout their lives.
And even if you have money to save and even if you are reasonably prudent, you can be misled or ripped off. Most investors take on more risk than they realize. They don’t realize that their gains in the bull market can be wiped out in the bull market. They don’t realize how much of their savings are bled away by management fees.
Yves Smith had a good post about this on her naked capitalism web log. She concluded as follows.
… … The big reason so many Americans are coming up short as far as retirement is concerned is that worker wages have stagnated, thanks to companies no longer sharing the benefits of productivity gains with employees as was once the norm. We wouldn’t be having a debate about possible future Social Security shortfalls if wage gains hadn’t tailed off as a result of 30 years of policies oriented towards weakening the bargaining power of labor.
But you’ll never hear that from the finger-wagging 1%: if you’d only been more frugal and responsible, you’d have an adequate retirement. For the lucky few that have no periods of unemployment, no divorce, no medical emergencies, no sick parents who need time and financial support, that might be the case. But those of us who live in a world whose instability is in no small measure due to rent-seeking by those at the top of the food chain know better.
Click on Even Harsh Frontline Program on Retirement Investments Understates How Bad They Are to read her full post, which comments on a PBS Frontline program called The Retirement Gamble.