7 Numbers that Show How Most Americans Were Robbed of a Comfortable Retirement

[xchrom]

http://www.alternet.org/economy/7-numbers-show-how-most-americans-were-robbed-comfortable-retirement



1. A $6.8 Trillion Retirement Deficit in America. But $8 Trillion in New U.S. Wealth Was Created in 2013.

The problem is that most of the new financial wealth went to the richest 10% (almost 90 percent of all stocks excluding fast-disappearing pensions). Basically you already had to be rich to share in the new wealth, and the people taking the wealth can defer taxes as long as they want, and then pay a smaller rate than income earners. Meanwhile, according to the National Institute on Retirement Security, Americans are at least $6.8 trillion short of what they need for a comfortable retirement.

2. $6,500 is the Median Retirement Fund for Upper-Middle-Class 50- to 64-Year-Olds

That's based on an analysis of the second-highest quartile of Americans by the Schwartz Center for Economic Policy Analysis. It may get worse before it gets any better. The percentage of 75- to 84-year-old seniors falling into poverty doubled from 2005 to 2009. That was BEFORE the recession. And the number of elderly Americans, notes the Administration on Aging, is steadily rising, likely by 75 percent between 2010 and 2030, to almost 70 million people.

3. ZERO Wealth Gained among 93% of Us, While the Richest 12,000 Families Made $100,000 EVERY Day

It's estimated that the richest .01% each made at least $40 million last year. A work day for many of them consists of logging in to their portfolio to see how many tens of thousands of dollars were added in the previous 24 hours. A stunning 93 percent of Americans LOST wealth, on average, in the post-recession "recovery."

4. TWICE the Cost of Pensions -- That's What Ten States Pay in Corporate Subsidies

This comes from a study by Good Jobs First of ten states with severe pension issues. The study found that "in all 10 states, the total annual cost of corporate subsidies, tax breaks and loopholes exceeds the total current annual pension costs."

[liberal N proud]

1. Greed of a few costing so many

[B Calm]

2. What, 401K pension plans are not

providing enough income for a comfortable retirement?

[Orrex]

14. The first time an employer tried to goad me into its 401k plan...

I'm not the brightest knife in the box, but I saw an obvious scam. So obvious that I can't believe that anyone else bought into it, yet there were all my coworkers happily lemming their way to the sea.

Almost all of them subsequently lost almost all of their 401k value in the subsequent market insanity, many of them cashing out due to financial hardship.


Hardly the panacea that investment industry marketed them to be.

[RobinA]

19. I Don't See

a 401k as a scam, except as a viable replacement for a pension. I've got an OK sum of 401k money. Yeah, it plunged in the crash, but I got it all back. I did go searching for a job that has a pension, but as one savings vehicle among several, I don't think its a scam.

[Orrex]

37. It's a scam in that it outsources risk and cost to the employees, and it's a huge pay cut

Money that used to go into pensions sure as hell isn't going into everyone's paychecks. That money is gone. Or more specifically, it's gone back to the corporate masters, who in many cases also reap administrative fees for "managing" their employees' 401k money.

So the pension no longer exists, meaning that it's a pay cut on future earnings, and it's also a hammer-blow to the skull in that you're paying into your own retirement from your meager paycheck, just like your contribution to your company-sponsored insurance.

You're also lucky that you were young enough to recoup your losses. A HUGE number of people had their 401k's wiped out and won't have time to get that money back.

[badtoworse]

31. If you're not in a 401k, what are you doing to save for retirement?

[Orrex]

35. You're kidding, right?

My investment plan is to pay our bills and taxes to avoid losing our home, and I'll work the rest of my life in hope of being able to afford a cardboard box to be cremated in.

Just like 150 million of my fellow citizens in the greatest nation in the history of the world.

[malokvale77]

40. Wish I could rec this post...

I am one of the 150 million in the same boat.

[Earth_First]

3. Had enough yet?

[FreakinDJ]

4. TWICE the Cost of Pensions

[blkmusclmachine]

5. "Trickle Down," bay-bee!

[WhiteTara]

21. You mean trickled on. nt

[Enthusiast]

6. K&R! Won't hear this on your evening news. Hey Scott Pelly, you ass!

[unblock]

7. the looming retirement crisis lies not in social security solvency but in 401(k) wealth distribution

social security will continue to provide for a very meager retirement, but private pensions are all but forgotten and 401(k)s and iras are massively underfunded. if they had been organized as private pensions, the current funding levels would have been viewed as criminally insufficient.

fortunately for the 1%, retirement is now organized as self-funding, so they are now in a position to blame everyone else for, quite predictably, having failed to have saved enough.

the retiring middle class has been flattened. nearly everyone will be scraping by in retirement, no matter how many years or how hard you worked.

[Lasher]

13. Include today's shitty employee/retiree health insurance and that about covers it.

Many people who retired 20 years ago have medical insurance that covers everything and costs the retiree nothing. Now such benefits are vilified as 'Cadillac plans' and targeted by Obamacare for an excise tax.

[TRoN33]

8. God is waiting for them to...

Explain why it's justified for them to be very greedy and entitled to everything God owns instead of sharing it with rest of people in the world.

For us, it's astronomical for them to conquer and exploit the lands and even ocean floors in geometrical rates just to make themselves much more richer than ever. Koch Industries are working with several ocean mining industries to build massive undersea mining factories with zero regulations.

The money itself is killing us.

[Scuba]

9. 4. TWICE the Cost of Pensions -- That's What Ten States Pay in Corporate Subsidies

This comes from a study by Good Jobs First of ten states with severe pension issues. The study found that "in all 10 states, the total annual cost of corporate subsidies, tax breaks and loopholes exceeds the total current annual pension costs."

Americans who have worked all their lives, dutifully paying for their retirement years, continue to be accused of greed and threatened with pension cutbacks. David Cay Johnston calls it "nothing short of theft."

[LiberalEsto]

10. And pensions are deferred wages

People paid into them out of their own wages, and the companies paid into them as a benefit of employment in lieu of wages.

This is money that people earned, and it belongs to them. Cutting back on pensions is plain THEFT.

[Scuba]

11. No, it's "shared sacrifice". Those poor billionaires have already given so much, ya know?

[marew]

26. Absolutely!

No one complained when I came out of grad school and took a lower paying job with the county 35 years ago SOLELY because it came with a pension! I also put money away in a 403b, paid into SS, and lived modestly my entire life but now I'm the bad guy. Go figure!

[Le Taz Hot]

12. Well, that can't possibly be because,

you see, the people on the teevee told us that it was because we spent all our money on luxuries and didn't save for our old age. That's what the people on the teevee told us so it must be true.

[Laelth]

15. k&r for the truth, however depressing it may be. n/t

-Laelth

[HughBeaumont]

16. . . . and if Boomers are incapable of retiring, a new generation cannot get started.

Let's not forget the plague of Ageism not helping the 50+ crowd.

[Lunacee_2013]

17. God, that's depressing.

But I'm sure we'll see some billionaire cry-baby on tv soon, complaining that he's being picked on by all of us mean ol' poor people when (or if) someone asks him how the rest of us are going to make it. Oh, but how will we peons ever understand their plight? Having more money than God ain't easy!

[woo me with science]

18. kick

[badtoworse]

20. 401k's are not a ripoff, but you need to get it right

Last edited Mon Mar 3, 2014, 09:20 PM - Edit history (1)

A few points about 401k's:
1.) You need to make intelligent investment selections that are appropriate for your age and level of risk tolerance. If you don't understand the investments - get help. Investing in things you don't understand is a recipe for disaster.

2.) Whether you like it or not, you're in charge of managing your investments and you need to stay on top of them. If you're invested in stock funds, you need to follow the stock market and move to a safe harbor when conditions warrant. If you're in a bond fund, you need to follow interest rates. If rates are rising, the value of your fund is going down and again, you'll need to act. Not being aware of what's going on in various markets and how your 401k is being impacted is another recipe for disaster

3.) Stick with the program. You need to have money withheld and deposited every month. If you only fund when money is available, you'll wind up actually saving very little - there is always another priority competing for your money. You also dollar cost average when you invest this way which substantially reduces risk.

4.) If your company has a match, you're crazy if you don't put in enough to get the maximum match your employer offers - it's free money.

5.) Don't withdraw money (you get hosed for 10% by the IRS if you're younger than 59 1/2) and don't borrow from your 401k unless it's a true emergency - it's for your retirement.

ETA: 6.) Start as young as possible. If you're a young person (say in your 20's) and you say I'll start my 401k in my 30's or 40's you're squandering a precious commodity - time. All the while you're not in the plan, your investments could have been growing. It makes a big difference in the long run.

I've been investing in 401k's for 26 years, as has my wife. For what it's worth, these are the rules we've followed with considerable success.

[bvar22]

22. And how many Working Class Americans...

...have the time, intelligence, education and resources to do all that?

Kudos to YOU if you have the skills and resources to do that.
That makes YOU exceptional,
but it is absurd to expect that kind of diligence from the average Working American,
and it is an insult for YOU to suggest that they do so.
Your post is just another version of Blaming-the-Poor.

It was a SCAM from the get go,
and "they" ALL knew it.
Nothing happens by accident when it involves this much money.

[cbdo2007]

23. All of the resources are available to you through your 401K plan

and it only takes about 30 minutes every 6 months to look things over and make sure you're on the right track.

Many 401K companies make it even easier than that by letting you pick some standard funds that are already allocated between stocks and bonds, based on your current age and prospective retirement age.

401Ks actually EMPOWER the poor so they don't have to rely on people, including the govt, who will try to scam them out of it. It is THEIR retirement after all, why would they trust it to people who just want to take advantage of them? That's the problem with 401K's is that people don't understand them and don't want to learn, they just want to "get rich quick" so they let any smuck off the street handle their money for them.

[bvar22]

24. You can't be serious.

Get real.

Your post saying everybody should have the resources, intelligence, skill, time, and education to "manage" their 401K...because YOU can do it is insulting,
and just another way to Blame the Victims.

I could never be pompous and arrogant enough to advocate that EVERYBODY should build their own houses and repair their own automobiles because I do it, and its EASY for ME,
so there must be something wrong with YOU if you don't.


You should be ashamed.
Crawl out of your bubble and learn some respect and compassion for those who are already working 2 jobs and haven't had the luxury of a good education.
It is hard enough for most Working Class Americans to fill out a 1040 Short Form,
and you think it is their fault if they can't manage a 401K plan?

Must be nice to live with that much insulation from the Real World.
Are you a politician?

[marew]

27. You are absolutely correct!

It is no secret that the American economy has been abandoning our hard working citizens since Reagan. I have dear friends who have kids in their late 20's and even with good educations they are having a very difficult time. Another friend with a daughter in her 50's is watching her daughter go backwards. She works incredibly long hours running a kitchen in a very large nursing home and is extremely conscientious but has not had a raise in 5 years. They have also told her periodically she MUST cut back on the cost of food! Corporations are buying up the nursing homes here so she can't go anywhere else because they are all held by the same company. In fact she is so good they asked her to drive all over the area on her own time to help other kitchens who were having problems. She was paid nothing extra... Oh, and after doing this for several weeks using her own car and gas they gave her a $10 gas card! Wow!
Corporate greed is certainly the name of the game!

[bvar22]

29. America's Working Class & Poor haven't had an advocate in the White House or Party leaderhip....

...since LBJ,
and its been downhill ever since.

Hit after hit,
Jobless Recovery after Jobless Recovery,
Invisible Hands, Exporting all the good jobs, destroying the Safety net, attacking Social Security and other scams too numerous to mention.

I know of a time before Social Security when Americans had to take responsibility for their own retirement.
It didn't work out too well,
and now they are trying to sell that shit again.

NOW they are pulling up the ladders with a smug smirk and telling us
Its all YOUR fault...you should have known better!!!


/rant, but Blaming the Victims really pisses me off.

[cbdo2007]

44. LOL

Just lol. hahahahahahahaha

hahahahahahahahahahahahahahHAHAHAHAHAHAHAHAHAHAHAHa

[knitter4democracy]

25. They're great for Wall Street, not so hot for workers.

Pensions were better, but 401k's are better for employers and Wall Street than pensions, so we lost pensions.

[cbdo2007]

45. 401Ks are infinitely more safe than pensions

You "lost pensions" because companies started going out of business and workers found out if they have a pension with 1 company that goes out of business they lose all of that pension. It's much more safe to be invested in thousands of companies rather than just one.

[cui bono]

41. What do you mean by the government trying to scam workers out of a pension?

I know corporations have done that, stolen pensions outright while making millions, but the government? When has that happened?

And why should the worker get this burden of figuring out 401ks? Used to be you worked, you retired, you got a pension. What's wrong with that? They just need to not be able to be stolen by corporations. The government could see to that with regulations and criminal action.

Anything that relies on investing money in the market place is gambling. I don't do any of that with my money because I think it's gambling and because I don't want to have to deal with it. Plus I think it's all rigged anyway.

[cbdo2007]

46. The govt has cancelled or lowered pensions all the time.

All of the current pensions promised to federal workers, school teachers, etc. aren't sustainable and many are getting half of what they thought they would.

A 401K is no more difficult to figure out than a checking account. "Investing money in the market place is gambling" - that's exactly what a pension is, as well as a 401K except that you are all invested in one company (who has their money invested in the stock market) rather than many companies. If your company that has a pension goes out of business, you're screwed. If one of the 2500 companies I'm invested in in my 401K goes out of business, I'm not going to even notice because the other 2499 are doing just fine.

401Ks must be the most misunderstood topic on DU, when they are so extremely simple to understand.

[badtoworse]

30. Absent a pension, what alternative does an average Working Class American have?

Unless you're one of a lucky few and do have a pension, you're going to have to fund your retirement by saving for it. In that respect, 401k's (and IRA's) are the only game in town. If you think it's too much trouble or too difficult to learn the basics of investing and elect not to participate, then I would ask you what you are doing to save for retirement. If the answer is nothing, you are very foolish and you're making a huge mistake. If that's the case, then you need stop rationalizing your inaction by calling 401k's a scam (they're not) and start being proactive about your retirement. Sorry if this sounds harsh or condescending, but it's good advice.

I don't agree with you that an average working class American can't learn enough about investing to manage a 401k. My father only had an 8th grade education and he did all right with his investments. He taught me enough to get started and I learned a lot on my own. I did put effort to learning and over the years, I have learned quite a bit. It's not rocket science; an average American CAN do it. If you think learning about investments is too much trouble, staying ignorant about them will get you into really big trouble in the long run.

By the way, how am I blaming the poor? My post was sound advice regardless of your economic status.

[Skittles]

33. many of those "lucky few" are in for a rude awakening

they can steal your pension, and they will

[badtoworse]

34. That is not true with a 401k - the account is yours and it's portable

[Skittles]

36. I know, I was referring to pensions

[badtoworse]

38. Understood. I was pointing out that a 401k is registered to you and can't be looted like a pension.

This thread is full of posters claiming that 401k's are scams, but they have a lot of advantages that are worth keeping in mind.

[cui bono]

42. But if corporations were penalized for stealing pensions it wouldn't happen.

As it is they are allowed to flat out steal them. It's appalling.

[Rex]

28. Plutocracies work that way.

It is one reason we have so many families living in their cars or on the streets. It is THE reason wealth distribution is way, way off in America. The reason we watched government institutions try and crush OWS.

[Spider Jerusalem]

32. One chart that explains why:

[mstinamotorcity2]

39. Thank

you. bookmarked for info.

[Quantess]

43. K & R