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The coming retirement crisis

The coming retirement crisis

 

Trouble is headed our way. Big trouble. You thought the mortgage crisis was bad, the retirement crisis will be much worse.

Here’s the tragic story in simple terms:

  • The Great Generation had a good deal
  • Employers provided workers pension plans
  • Those pension plans would pay a certain monthly amount upon retirement, usually age 65
  • When a retiree died, the pension checks stopped
  • The longevity risk was on the employer, however, the risk was spread across hundreds or thousands of employees; some lived long, others died right after retirement
  • Then poof! Retirement benefits, the reward for many years of valuable service, changed.
  • The Baby Boomers got a different deal
  • Employers began dissolving their pension plans and transferred the financial risk to employees
  • The 401(k) plan was introduced
  • The longevity risk fell squarely on the employee’s shoulders
  • Today the average 401(k) balance is $15,000 according to MSN Money
  • As Baby Boomers reach retirement age, they will be required to keep working
  • If you die at age 65, you won’t need a retirement plan
  • “Work until death” will be the next retirement plan offered by employers

I recommend you read America’s Looming Retirement Crisis on MSN Money.

Kevin Kennemer is founder of The People Group based in Tulsa, Oklahoma. Kevin is driven by his passion for company owners and their need to earn a profit, employees' desire for a positive and fulfilling work experience, and the community that benefits when both groups do well.

1 Comment

  1. Elizabeth Hill 5 years ago

    Who picks up the costs when people (retirees, elderly, disabled, “too old” to be hired, etc.) don’t have a steady income (i.e. pensions) and run out of money? Tax payers will be on the hook. This is not a political comment, just an obvious fact.

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