If you are currently retired or going to retire in the next few years, and you do not have or expect to have the funds needed to retire as comfortably as you wish, who is to blame?
Who is to blame for retirement insecurity?
The government…social security should be beefed up to account for cost of living increases well beyond what has been done.
Employers…companies should have retained defined benefit plans based on tenure and have been required that they were properly funded with a formula to provide adequate income for employees in retirement.
Myself…I should have saved more and utilized investment vehicles like 401(k) or 403(b), IRA’s, HSA accounts, etc.
I think a lack of emphasis in my local educational community is mostly to blame. I took econ coursework in high school and college wherein no heavy emphasis was ever set upon saving one’s earnings and investing them to cover future expenses.
I know it’s true because I took extensive notes from all three courses and have read the notes and texts I had from the classes. I was perfunctory about taking notes and emphasis on personal finance was only mentioned once in a while as an aside. This was all from the early 90s.
I want to add that I did find the macro and micro topics useful as memory structure for understanding the news, quarterly reports and financial statements. As I implied above, they never said “you should try to save 10-15 percent over your whole life. Start as soon as you get your first job.”
I was in a moderately solid plan, nothing extravagant. The big beautiful doge tariff to cut elite taxes and restrictions while providing less social safety net has given me insecurity, so I don’t blame the government writ large as much as I blame the current administration.
2008 worked out well in my case. My company raised funds to stay afloat in part by offering 401Ks with very nice points. I maxed that out like a duck on a junebug. That and not buying as unnecessarily as large a house as my lender was pushing pre-crash limited my underwater time post-crash
Of course luck still had a part. The company also stayed afloat thanks to tax breaks to our end-users by Obama (whom the Republican company management otherwise despised)
I voted “something else” because it’s several somethings. For many years I wasn’t in a job that provided a workplace pension, or I was not eligible to join it. I was also in low-paid employment and did not have the means to save much towards retirement. Since then, marriage and divorce happened, job changes happened, government policy changed, all sorts of other things got into the mix, and now I am not looking to retire any time soon because I am not going to be sufficiently financially stable for my liking. Generally my own fault, I think.
I’m not planning to retire soon, and when I do I should have enough funds to retire.
But my answer would be all of the above. The government has enacted policies that redistribute wealth upwards. Since the 1970s, these policies have funneled about 50 trillion in wealth upwards to the top. This makes it much harder for people to fund retirements when all the gains in economic productivity go to the top.
But bad luck is also a major factor. Some people are born into bad circumstances and never really have the ability to get a good job that pays well for one reason or another. Or they get sick, or they get divorced, or the industry they are a specialist in changes dramatically.
I’ll probably, hopefully be OK when the time comes, mostly by being frugal. Never having kids will probably be the best financial decision I’ve ever made. But who do I blame in general for retirement problems?
I suppose I blame the very idea and the world we have created. Think of it this way… You’re supposed to make enough money to not just support yourself, which is hard enough with today’s housing costs, but also:
Have a family, have hobbies and an actual life, get through potential emergencies (health and otherwise) PLUS have enough money to last a few decades after you’ve stopped working.
That’s crazy. It sounds insane in today’s world. I’ll just barely manage it having cut the Gordon’s Knot of bypassing the family thing, and only if nothing goes terribly wrong.
If I have retirement insecurity, who do I blame? The world we live in. The demands to keep up with the Joneses, the lure of cheap “exotic” cruise ship travel, the instability of the government/status quo. . .
And a little bit myself, for not trying harder for a better paying job, partly because I didn’t used to be worried– my parents had plenty of money. (My parents are still living, and still have plenty of money. but I’m more aware of how much money it could take to keep them in comfort for the rest of their lives. And more nervous about depending upon stockpiled money.)
A lot of us here are US Boomers. I am a late Boomer by definition but have always thought of the “real” Boomers as the people 5-15 years older than myself.
Ref @Eureka just above …
Agree completely. As kids many Americans our age lived through watching our parents succeed without really trying. The great US postwar economic boom was good to everyone, and especially to midmarket laborers. Our parents were the beneficiaries of that miracle’s largesse. And of course both by their word and their deed they taught us to expect more of the same. As did the self-congratulatory zeitgeist of both school and consumerist advertising.
Oops. That happy scenario was a one-off and doesn’t actually apply to folks entering the labor force much after 1965. And now less so all the time.
Speaking just for me I am economically secure. But compared to my own rose-tinted expectations from my upbringing I’m a lot worse off than I “should” have been. Of course since I’m financially literate, I’ve been revising those expectations downwards ever since my late 20s. But it’s been uncomfortable doing so.
Who to blame for the shortfall? All the various changes and factors mentioned by others above. I have had bouts of both excellent luck and terrible luck. I too skipped having children. Although not motivated exactly by financial concerns at the time, it has been a darn painless way to economize on a lot of significant expenses during what should be the heavy capital accumulation years of one’s life.
Lastly, now as a retiree surveying the storm-tossed future of our country I realize most or all of my cushion could be destroyed by deliberate malice or simple incompetent carelessness on the part of our government as events spin out of their control.
It doesn’t keep me up at night (yet), but the very idea that we all have to entertain this new source of massive systemic risk would have been unthinkable to an American, say, 20 years ago. It’s certainly been an ongoing concern for everyone in other less stable countries, including some number of Dopers.
Yet more reversion to the mean. Economic security for the bulk of humanity is historically unprecedented. For us here in the “good” countries it was good while it lasted and it may yet hold on and flourish. But not without some spills, chills, and thrills along the way.
I spent the late 80’s until I retired trying to live by “Your Money Or Your Life,” and advocated the philosophy it suggests (live frugally, save relentlessly, and invest conservatively). Now retired, my only concern is “what if I live a really long time but need expensive care” and haven’t figured out a decent self-euthanization mechanism.
I didn’t answer the poll since I’m retired and am not a bit insecure. But the missing ingredient here is the US business environment. A big reason that I’m in good shape is that I was never laid off from a job. Those who are - and many are laid off for no fault of their own - and who have trouble finding a new job eat into retirement savings, or at least don’t contribute to them. The same would go for health problems. And some people don’t qualify for jobs which give them enough money to save, even if they make good decisions. Look at housing costs.
Defined benefit plans are great if you are in an environment where many people work their entire careers at only one or two jobs. People who didn’t complained loudly back when they were the norm.
That’s not to say that plenty of people are in trouble because of bad decisions.
Echo this. I did hold a fairly well paying job for 40+ years and never spent any of the sheltered savings from a stock plan and a 401K, so I certainly did some things right. But when I hear of the circumstances for financially insecure people, it’s often misfortune that didn’t happen to strike me. Even for the things I think I did right, I was lucky that they were pretty convenient and painless to do, and there were gentle persuasions urging me along that path.
I think there are some elements of meritocracy in our US economy, but the elements of luck and the accident of birth are bigger.
This a a big factor. After college I was faced with a tough job market. After looking for a job for several months (working in an electrical supply warehouse to make ends meet), I was suddenly offered two jobs. One private sector, one public sector. The private sector job paid a good deal more but had the downside of a remote work site and long hours. So I took the public sector job thinking that I would work it for no more than three years and then head out to the private sector. That didn’t happen and I stayed in the public sector my entire career, changing jobs twice but with the same employer. The private job was in mining and that operation is long gone, so I would have changed jobs at least once and probably several times. I’d like to think that with multiple jobs I would have saved for retirement equally as well as I did with the job I took, but that probably wouldn’t have happened, and I certainly wouldn’t have a small pension.
One thing I noticed about people was how the job market when someone gets their first job affects how they treat changing jobs. Three years after I started to work the job market in my field roared back to life. People who graduated at that time would readily change jobs regularly because they were so easy to come by, and in their mind always have been. By my experience was different, I thought jobs were hard to come by since it took months to even get an offer so I was reluctant to change jobs. It worked out for me in the end, but I sometimes wonder how the people who frequently changed jobs fared.
To address the OP’s poll, I think employers could do better in one regard and that is to have annual reviews of their 401k participants progress. I can see why they don’t do this, and the 401k plans usually send out at least an annual statement anyway, but a face to face meeting with someone to specifically go over retirement savings would be helpful. I knew plenty of people who were unaware that they could contribute to an IRA in addition to the 401k, and also people that were so risk adverse that they saved but never invested. Annual counseling could steer people into making better choices if it were done right. My employer offered retirement seminars and encouraged mid-career employees to attend as well as people much closer to retirement. I think I attended my first one 20 years before I retired, and a few more later on. That helped me to have a decent retirement.
I only had 3 jobs (with four companies) in 35 years. But only the first had a pension, which turned out to be bigger than I thought. (It is in an annuity now, untouched.) The great things about 401Ks is that you can accumulate into them no matter how often you change jobs.
Kids today switch jobs a lot more frequently than we did, who started when lifetime employment wasn’t a joke. My son-in-law has, always going up, always changing jobs when he wants to. He’s been very successful at it, but it would drive me crazy.
In Silicon Valley anyway you can do quite well from being laid off, assuming you can find another job quickly. But your average person may not do so well.
I’ve told the story before about how I essentially started saving for retirement completely by accident. For my first five working years after college, I did nothing about retirement. Then, when I was in my late twenties, I got a job with the state of Indiana. All public employees in Indiana are automatically enrolled in the Public Retirement System. And with that, I started saving for my retirement without even fully realizing that I was doing it. I got quarterly statements, which I just kind of glanced at and threw away. Back then the numbers were fairly low.
I was probably almost 40 before I really started to think about retirement. And I was delighted to discover that I was in pretty good shape. Indiana’s public retirement system is analogous to the Federal system, in that there is a pension fund, in addition to an investment account (essentially a 401k in all but name). It gave me a much better start on my retirement savings than if I had really waiting until my 40s to start saving.
Now I work for a state university, and have a 403b in addition to the pension, plus an IRA. I still feel a little uncertain about where I am, since I missed out on those years in my early 20s when even small investments have the potential to get really big by your 60s. But I should be in pretty good shape. It’s all because I had the dumb luck to get a job in the public sector.
This is me too. Different things, but they add up to the same shortfall. I am still ten years away from official retirement age, but that will go by fast. Short of a windfall, I can’t see anything but struggle for my future.
Retirement is still aways off for me, and my best guess is that I should be in okay shape and not have to work into a crazy old age. That’s mostly because I have a defined benefit pension in addition to 401k and S.S. And the option to retire abroad.
But I definitely could have saved more, and not made some of the choices I did.