Retirement Savings Is Not A Cure All
The Economic Policy Institute has released a report detailing shortcomings of 401(K) plans. “We’re moving toward a retirement system that magnifies inequality, and doesn’t reduce it,” Monique Morrissey, the author of the EPI report, titled “The State of American Retirement,” said.
Retirement for Working Families
The key findings of the following charts include wealth not growing fast enough to keep pace with an aging population and other changes. The shifting from traditional pensions to individual savings widening retirement gaps. Workers’ prospects increasingly affected by economic downturns. Growth in retirement inequality not being random. The rich getting richer and the poor poorer. The shifting from defined-benefit to defined-contribution plans has exacerbated racial and ethnic disparities. Retirement readiness gaps widening between workers with and without a college education. Finally, single people and women face particular challenges.
Retirement for the Elderly
Key findings of the following charts include less educated, minority, single, and female seniors are most likely to have low incomes. Social Security is the most important and evenly distributed source of retirement income. Many seniors are still working. A diverse group of retirees relies on pension benefits. 401(k)s and IRAs are not an important source of income.
Successful savers generally make the decision to live on less than they make over a long period of time and invest the difference. Sometimes that means doing things like living in smaller homes, driving older cars, shopping at garage sales and thrift stores etc.
It’s ok not to have the latest gadget or look like you have much. Expenses do not need to appear in the form of credit card debt. Life can deal us frozen salaries, major health expenses and more but saving for retirement and for college is imperative.
Basically, people need to start where they are with what they have and build from there. The best helping hand you have is at the end of your own arm. Look for ways to earn side income and to cut expenses. Save and invest the results.