Is America’s Retirement Crisis Fixable?


With multiple generations facing a new economic reality, the retirement crisis in America is taking center stage. Considering that defined benefit plans are moving closer to full extinction, many people are not saving enough for their own retirements. This crisis will likely play out for several decades. However, there is hope for those willing to make sacrifices and assume responsibility.

Retirement once included a combination of pension plans, social security, and personal savings, but that traditional three-legged stool of retirement is deteriorating. Outside of the public sector, Baby Boomers will be known as the last generation to enjoy pension plans. Hardly anyone in Generation X — those born from the 1960s to early 1980s — will have guaranteed benefits from their employers, while millennials won’t even know what pension plans are without looking them up on their smartphones.

That leaves social security and personal savings for retirement funding, which carry their own problems. “When you look at social security, if there is nothing done to change the savings of social security, it has been forecast that in 20 years there will be a 23 percent reduction across the board for every beneficiary,” said Chad Parks, chief executive officer of The Online 401k, in a phone interview. “It’s hard to look down the road in 50 years for the millennials, but a lot of the ones we talk to have zero expectations for social security.”

Recent reports have highlighted the severity of the retirement crisis. In fact, more than half of Americans are at risk of not being able to afford essential expenses in their so-called golden years. According to Fidelity’s Retirement Preparedness Measure, 55 percent of Americans are behind in retirement preparedness. The median score indicates working Americans are on track to meet just 74 percent of their estimated retirement expense goals and face a 26 percent income gap.