How severe is the retirement crisis? These six charts spell it out.

[Zorro]

It has become fashionable in some quarters to pooh-pooh the very idea of a "retirement crisis" facing millions of Americans. The skepticism tends to come from economists and pundits whose retirement security is not in doubt, thanks to handsome retirement plans and high-income jobs that enabled them to assemble healthy nest eggs. They're scarcely fazed by the discovery that some of their claims are based on arithmetic errors, as happened just last month.

Economist Monique Morrissey of the progressive Economic Policy Institute on Thursday delivered some hard evidence of the problems facing the average American retiree with release of her updated Economic Inequality Chartbook: 32 interactive graphs that show how the shift from defined benefit pensions to 401(k)'s "has failed the majority of workers." This shift, which relieves much of the burden and risk of saving for retirement from employers and places it on employees' shoulders, has increased wealth inequality for older workers and left them on average with meager resources, even as their periods of retirement grow longer.

Morrissey also shows how Social Security has become more important to the average worker over time, giving strength to the argument that this all-important program should be expanded and its funding spread over a larger proportion of the population. Under the existing payroll tax system, which covers only earned income up to an inflation-adjusted $118,500 (this year), higher-income wage-earners and those who collect income mostly from capital gains, dividends and other unearned income pay a lower rate.

We've selected six especially telling charts from Morrissey's collection.

http://www.latimes.com/business/hiltzik/la-fi-mh-six-charts-on-the-retirement-crisis-20160302-column.html

It's quite unsettling to see that there are so many workers near retirement age with so little saved.

[abelenkpe]

1. K&R

[PoliticalMalcontent]

2. I know I'm eff'd.

That's why I'm for Sanders. The status quo isn't cutting it for me.

[shadowmayor]

3. Thank you Raygun

What started in Xerox was rolled into the Federal Employee Retirement System. Social Security, Pension, plus 401K. Of the three, the 401K has over time been the worst part of this three pronged retirement system. Wait until the next crash and watch the retired and soon to retire folks howl. They'll be thanking their lucky stars for the SS portion that keeps them fed and alive.

[NBachers]

4. I sure hate seeing the rate of return on my little 401k in the negative month after month.

I'm putting in a hefty chunk of my paycheck every week, because I'm 67 in a few weeks, and I'm trying to build it up as much as I can while I'm still working.

It's depressing to work all these hours and see the money I contribute evaporating.

[King_Klonopin]

5. We can blame most of the crisis on the 3 market busts --

those dreaded "bubbles" : the dot.com market bust of 1999,
the over-valued house and stock market bust of 2006, and
the banking industry bust of 2008. My IRA's and 401k have
all seen their values drop by 50% or more on THREE separate
occasions. It means that it has taken 20 years to realize the
growth that should have materialized in 8-10 years -- always
having to make up lost ground. My generation is screwed.
I am 57, have 20 years outstanding on my mortgage, and
only have about $140K saved -- so, 76 looks like when I can
retire, provided there are no more busts.... yea, right.

[modrepub]

6. Living It

I'm one of the very few that managed to find a much higher paying job during the Great Recession. This allowed me to start putting away a lot of money through my 401k. I've always known these plans do not work when you make less than $40k/yr; putting 6% away really won't do much especially if you figure in what fees and commissions take away. I like how there is no discussion about what happens to most employees who reach 50. We all know that this is the favorite age to jettison the older folks in exchange for younger workers. Good article.

[freebrew]

7. Planning doesn't help when you lose your job...

in your late 50s. Age discrimination is OK since *, it's profit first.
So, if you plan on working longer, hope your employer is OK with it.

Just don't get sick or honest.

[Igel]

8. It's not like 401(k) and wealth are independent.

I mean, seriously. Given the low threshold for being relatively wealthy, if you chuck $6k/year for 10 years into a 401(k) and don't lose the $ you're suddenly one of the "relatively wealthy" with a 401(k) plan.

If instead you spend that $6k instead you're among the relatively poor without a 401(k) plan.

Now, if they reported wealth excluding the 401(k), they'd probably be able to say about the same thing but at least it wouldn't be based on so obvious a confound.