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America's Retirement Crisis
America's Retirement Crisis
by Stephen Lendman
Decades of class war leaves most Americans nearing retirement woefully unprepared.
Since the mid-1970s, real wages haven't kept pace with inflation. Benefits steadily eroded. High-paying jobs disappeared. Improved technology forces wage earners to work harder for less.
So-called "free" markets work only for those who control them. A handful of winners benefit at the expense of most others. Conditions get progressively worse.
Wealth disparity extremes are unprecedented. Neoliberal harshness force-feeds austerity when stimulus is needed. Public needs go begging.
American inequality is institutionalized. Bipartisan complicity assures it. Class war rages. America's social contract is targeted for destruction.
Both sides agree. They support giving bankers, war profiteers, other corporate favorites, and super-rich elites greater wealth at the expense of most others.
A May 2012 Employee Benefit Research Institute (EBRI) study highlighted America's retirement crisis. American workers face trouble.
The percentage of those expecting to retire after age 65 increased to 37%. In 1991, only 11% expected to do so.
One-third of US workers expect to retire at age 70 or older. Growing numbers expect never being able to do so.
Over two-thirds expect to work at least part-time past age 65. At the same time, health and economic crisis conditions keep many of them from doing so.
Nearly one-third are woefully unprepared. Their savings are less than $1,000. Many others have nothing in reserve. Around 60% have less than $25,000.
Fewer than half of working Americans calculated how much they need in retirement. About two-thirds feel they're behind schedule preparing for it.
Only 14% believe they're adequately prepared. Only one-third have defined benefit plans.
Few understand retirement healthcare costs. Medicare is eroding as treatment expenses soar.
Protracted economic crisis conditions, high unemployment, growing poverty, and other concerns create enormous uncertainties. Most workers approaching retirement haven't prepared. Covering expenses is harder than ever.
Economics Professor/retirement expert Teresa Ghilarducci says maintaining living standards in retirement requires 20 times annual income in savings.
Few Americans are prepared. Three-fourths nearing age 65 have less than $30,000 saved. "For the first time in US history," she says, "every source of retirement income is under siege."
Professor James Russell discussed it, saying:
"The great 30-year experiment in 401(k) and similar retirement financing schemes that depend on stock market investments has failed."
Even before the" 2008 crash, clear signs showed "that very few workers would be able to accumulate enough wealth through these accounts to insure retirement financial security."
Since the 19th century, every generation was better off than previous ones. No longer. Institutionalized inequality victimizes most Americans. It's been that way since the mid-1970s.
Examples include eroded unionization, stagnant wages, lost benefits, Social Security and Medicare under siege, and high-risk defined contribution plans replacing secure defined benefit ones.
The 1978 Revenue Act changed things. Sections 401(k), 403(b), and 457 let retirement plan contributions be made with pretax dollars.
Employers bait and switch. They exploit workers advantageously. They replace defined benefit plans with defined contribution ones.
They often don't work. They falsely claim worker investments provide secure retirement income. Evidence shows otherwise.
Lifetime obligations exceed what most people save. Financial services industry con artists skim huge profits off the top. They do so in large commissions. They add up over time.
Social Security, public pensions, and defined benefit plans work as intended. They support retirement security. Marketplace uncertainty is eliminated.
Money power runs America. It controls Obama and congressional majorities. It's destroying the future of millions. A new Senate study explains more.
Most retirees face financial trouble. They're worse off than their parents and grandparents. Protracted Main Street depression conditions destroyed 40% of personal wealth.
High unemployment compounds trouble. So do stagnant wages, eroding benefits, and savings paying virtually no interest.
Stock market gains go mainly to rich elites. Progressive economists express concerns. Americans are increasingly on their own sink or swim. Retirement security is fast disappearing.
America's social contract is under siege. Class war rages. Social Security and Medicare are targeted for elimination. Wealth, power, privilege, and dominance alone matter.
Fiscal cliff doublespeak duplicity conceals what's planned. Bipartisan double-dealing targets America's middle class and millions most disadvantaged.
A new Senate report says America faces a huge retirement savings deficit. It's about $6.6 trillion. It's about $57,000 per household. It's double or more what most households have in savings. It assures current crisis conditions worsening.
Based on Federal Reserve data, the Center for Retirement Research (CRR) estimates 53% of US workers aged 30 or older woefully unprepared for retirement.
In 2001, it was 38%. In 1989, it was 30%. Other studies confirm CRR's findings.
Alicia Munnell serves as CRR director. "There is a mismatch between retirement needs rising and retirement benefits contracting," she says.
Current conditions are polar opposite earlier ones. From Social Security's 1935 enactment through the mid-1970s, things improved for most Americans.
No longer. Most people are increasingly on their own. They're woefully unprepared. They earn and save too little. Trouble awaits them later on. Dire economic conditions exacerbates things.
Recent retirement policy changes contribute to growing inequality. Washington grants at least $80 billion annually in tax breaks to encourage 401(k)-type accounts.
Benefits go largely to upper-income households. The system is rigged for them. It's done at the expense of most others.
Those earning $200,000 annually and contributing 15% of pay to retirement savings reap an additional $7,000.
Workers receiving $20,000 and contributing the same percentage get nothing. They don't earn enough to qualify. Others earning $50,000 get about $2,100.
Workers in defined benefit plans face uncertainty. They're underfunded and eroding. Benefits are frozen and disappearing.
Public pensions have similar problems. They're being looted. They're targeted for eventual elimination. They may be gone in another decade or sooner.
Most households today have few options. Government scoundrels target them. Austerity substitutes for help. Dire conditions are worsening.
One worker spoke for others. He's aged 60. He thought he'd be comfortable in retirement. In 2002, he was laid off. "People talk about a lost decade," he said. "That's what I've been through," he stressed.
He spent the last 10 years struggling. He was in and out of low pay/poor benefit/part-time contract jobs. He drained his savings to get by. Doing so excludes retiring when he planned.
Growing millions suffer similar hardships. Nothing is done to help them. Bipartisan harshness substitutes. America's future looks grim.
Power politics replaced fairness. Corporate empowerment and privilege are institutionalized. Wealth is disproportionately shared. Ordinary people are exploited. Growing millions are left high and dry.
America is rife with corruption and gangsterism. The criminal class in Washington is bipartisan. Kleptocrats run things. They're complicit with corporate crooks. Poverty, unemployment, hunger and homelessness are at near record levels.
Social justice are four-letter words. Police state harshness confronts resisters. Big monied interests alone matter. Obama's committed to serve them. So are party bosses and most congressional members.
America's unfit to live in. It's unprincipled and morally reprehensible. It force-feeds hard times. The worst by far is yet to come.
America's "going to crash big time," says Paul Craig Roberts. Humanity hopes it'll happen in time to matter.
Stephen Lendman lives in Chicago. He can be reached at lendmanstephen [at] sbcglobal.net.
His new book is titled "Banker Occupation: Waging Financial War on Humanity."
Visit his blog site at sjlendman.blogspot.com.
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