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US Pension System Facing an Imminent Retirement Crisis due to Irreparable Faults


For millions of Americans, the so-called golden years will actually be years of despair and uncertainty. And it’s very likely that you are one of those that will never be able to stop working and finally retire. But you’re not alone in this. Over 90 percent of working households in the U.S. do not meet retirement savings targets for their age and income. In fact, even the people that did absolutely everything right throughout their working years are still at risk of seeing their savings vanish as financial markets experience the worst downturn since the Great Recession, interest rates soar, and record inflation means the value of their money is steadily dropping. New data shows that the country’s unfolding retirement crisis just took a massive turn for the worse. Crippling stock market losses, cracks in the U.S. pension system, and the growing Social Security deficit are all combining to create increasingly harder conditions for workers to save for retirement and maintain their living standards at retirement age. In other words, the promises that were made for all of us that we would be rewarded for the efforts we made during our years of hard work with financial security were actually a lie. In today’s America, the only options given to the vast majority of workers are: either work until you die or brace for poverty. According to the National Institute on Retirement Security, even though employer-sponsored retirement plans are one of the most important methods of saving for retirement, 50% of private sector workers in the U.S. don’t have access to pension or 401(k) plans, and about 40% of the population has zero savings for retirement. And the vast majority of those who do have 401(k) plans do not have a solid financial cushion to fall back on. IRA data reveals that some 92% of working households do not meet retirement savings targets for their age and income. Even when counting their entire net worth, 65% still falls short. More worryingly, 1 in 5 baby boomers that are now reaching retirement age have less than $5,000 in retirement savings - and they’ll need about 240 times that amount to be able to retire and keep pace with the rising cost of living and soaring health care costs, as noted by financial analysts at research firm Ramsey Solutions. No wonder why a third of seniors say they either plan to work through the age of 70 or never retire, according to a study by BlackRock. The U.S. retirement system was structured so that retirees could count on three sources of income: Social Security, pension benefits, and personal savings, the expert explains. But many people expect Social Security retirement benefits to fund a portion or all of their retirement. The reality is that the program is now facing a 75-year deficit, and in theory, it was never intended to fully support workers in retirement even though 44% of retirees say it is their primary source of income, according to a survey by the Employee Benefits Research Institute. Those resources are being depleted right now, and by 2033 the government benefits program will be only three-quarters financed, which means that we have a little more than ten years before this crisis hits its peak. And the biggest problem isn’t that people don’t want to save — it’s that they don’t have any money to put toward retirement. Things weren't supposed to be like this. Our population developed under the implicit social contract that if you worked hard for a company, you'd be rewarded with financial security in retirement. Of course, there were always gaps in the retirement system. But today, the social contract is on shakier ground than ever, many experts say. This crisis is going to be absolutely devastating for our society. Retirement is considered the final chapter of the American dream. But it's clear that the dream of the “golden years” is quickly turning into a fairy tale for our hard-working population. For more info, find us on: ...(read more)



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Brace for Retirement Crisis as US Pension System is Terminally Broken Retirement has always been seen as a time to relax, travel, and enjoy the fruits of one's labor. However, for many Americans, the dream of a comfortable retirement is fading away as the US pension system is being dubbed "terminally broken". The cracks are starting to show, and it's time to brace ourselves for a looming retirement crisis. One of the main problems with the US pension system is its reliance on traditional defined benefit plans. In this system, retirees receive a fixed monthly payment based on their years of service and salary history. However, due to a combination of factors such as rising healthcare costs, longer life expectancies, and low-interest rates, many companies are struggling to meet their pension obligations. This can have disastrous consequences for retirees who were counting on their pensions to provide a stable income during their golden years. A recent study found that nearly 25 million Americans are at risk of not having enough saved for retirement, and this number is only expected to rise in the coming years. To make matters worse, many private sector companies have switched to defined contribution plans, such as 401(k)s, shifting the responsibility of saving for retirement onto the employees themselves. While these plans offer some advantages, such as tax-deferred growth, they also come with risks. Employees must make their own investment decisions and hope that the market performs well. Unfortunately, this leaves many individuals vulnerable to market downturns and may result in inadequate savings. Another issue plaguing the pension system is the growing number of public pension funds facing severe underfunding. Many state pension systems are grappling with high levels of debt and have failed to set aside sufficient funds to cover their long-term liabilities. This raises concerns about whether retirees will receive the benefits they are entitled to and puts an additional strain on already stretched state budgets. The implications of a broken pension system are vast. It not only affects individuals' retirement plans but also has broader economic consequences. As more retirees struggle to make ends meet, they may be forced to rely on government assistance programs, putting an additional burden on taxpayers. Moreover, a lack of retirement savings can potentially hinder economic growth, as older Americans reduce their spending, affecting various industries. So, what can be done to address this pension crisis? First and foremost, there needs to be a concerted effort to educate individuals about the importance of saving for retirement and provide them with the tools and resources to do so. Employers and policymakers should explore opportunities to promote retirement savings, such as automatic enrollment in retirement plans and employer matching contributions. Furthermore, policymakers need to tackle the issues facing public pension funds head-on. Reforms should be made to ensure their long-term sustainability and prevent further underfunding. This might include raising contribution levels, adjusting retirement ages, and finding innovative ways to generate additional revenue. Lastly, individuals should take a proactive approach to their retirement planning. They should seek professional financial advice, regularly review and adjust their investment portfolios, and consider alternative sources of income such as part-time work or starting a business. The US pension system is indeed in crisis, and the time to address it is now. Without significant reforms, the retirement dreams of millions of Americans will be shattered, leading to a broader societal and economic fallout. It's a wake-up call for individuals, employers, and policymakers alike to take action and ensure that retirement remains a time of comfort and fulfillment, rather than a period of financial struggle. https://inflationprotection.org/us-pension-system-facing-an-imminent-retirement-crisis-due-to-irreparable-faults/?feed_id=125798&_unique_id=64d3e64b919d6 #Inflation #Retirement #GoldIRA #Wealth #Investing #401kcollapse #401kplan #babyboomerretirement #babyboomersavings #costoflivingcrisis #middleclasscrisis #middleclassretirement #pensionfundcrisis #pensionfundscrash #purchasingpowerloss #retirementcrisis #retirementfacts #retirementplan #retirementsavingscrisis #risinglivingexpenses #socialsecuritybenefits #socialsecuritycrisis #stockmarketcrash #unfundedpensions #uslivingstandards #usretirementsystem #ussavingsrate #RetirementPension #401kcollapse #401kplan #babyboomerretirement #babyboomersavings #costoflivingcrisis #middleclasscrisis #middleclassretirement #pensionfundcrisis #pensionfundscrash #purchasingpowerloss #retirementcrisis #retirementfacts #retirementplan #retirementsavingscrisis #risinglivingexpenses #socialsecuritybenefits #socialsecuritycrisis #stockmarketcrash #unfundedpensions #uslivingstandards #usretirementsystem #ussavingsrate

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