Thursday , 23 May 2024

Retirement for Most Americans Is Largely a Mirage – Here’s Why (+2K Views)

With defined benefit pension plans slowly going extinct and Americans not savingretirement enough for retirement it is becoming tougher for Americans to retire and is setting the stage for a retirement disaster…

So say edited excerpts from the original post* at My Budget 360 ( entitled Pension disaster looms over the horizon:  In 1980 60 percent of Americas participated in a pension program.  Today it is less than 10 percent and the amount saved for retirement is startling.

The following is presented by Lorimer Wilson, editor of and the FREE Market Intelligence Report newsletter. The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.

The trend from defined benefit pensions to 401ks started in 1980 and it was expected that most Americans would save (enough) money for retirement…but, unfortunately, that has not been the case. As such, they will have to rely on Social Security instead.

Defined Benefit Pension Plans Disappearing

As noted below, only 10% of Americans have access to a defined benefit pension although most do have access to 401k plans (65%) and other retirement options (54%).


Underfunded Pension Plans

In addition, pension issues also loom as many state governments contend with deep underfunding for retirement benefits as a result of defined benefit pension plans that are set up with unrealistic return expectations. 


As the chart above highlights, many state defined benefit pensions are underfunded and if the market even has a slight correction this will exacerbate the problem.

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Lack of Savings in Retirement Accounts

Without defined benefit pensions many Americans are left to fend for themselves via retirement accounts.  As the table below illustrates that has not worked out very well.


These are disturbing figures.  The median amount saved by all Americans is $3,000 for retirement!  Even those nearing retirement in the 55 to 64 age group have roughly $12,000 to get by in their later years.  In other words, many are going to be working deep into old age.

The small amount of savings set aside for retirement can be attributed to the lack of income being made by most Americans…It’s hard to get by when the per capita wage is $26,000 and the cost of living continues to increase without any wage increases.  Getting by is priority number one, not a far off retirement.

Retirement Dreams Deferred

As you would imagine the retirement age is being pushed out:

at what age did you retire


With the retirement amount saved so low many are going to depend on Social Security as their main income stream in their later years and much of this money is going to be paid by a younger and less affluent generation…If you think you have heard the last of this think again.

[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]


Related Articles:

1. Coming Retirement Crisis Will Shake America To The Core

The pension nightmare that is at the heart of the horrific financial crisis in Detroit is just the tip of the iceberg of the coming retirement crisis that will shake America to the core. As a society, we have made trillions of dollars of financial promises to the Baby Boomers, and there is no way that we are going to be able to keep those promises.  The money simply is not there. Read More »

2. Retiring Soon? Consider Relocating to One of These Cities or Countries

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3. Retirement Planning: Take This “Life Expectancy” Test

Medical researchers have created a quiz that predicts how long you’re going to live [i.e. how many years you will live into retirement – if any!]. It’s called a ‘mortality index‘ and it’s composed of 12 questions. It claims to predict with some accuracy whether you’ll live out the decade. Read More »

One comment

  1. Yes, this will be especially true for those that are in their 30’s. now and almost a guarantee for their grandkids later on:

    Also posted here:

    I think especially for the very young and their children (think todays great grandkids) life in the USA will be far different than the future than most of us can imagine today, since the USA will be like a Third World Country, unless you are Wealthy. Imagine Great Britain not so long ago, when the landed Wealthy ran their Country and most British citizens were beholding to them for not only their jobs but even the roofs over their heads!

    Because the Ultra Wealthy now own more of the USA than ever before in our History, we can easily imagine a world where they and their chosen Political Leaders run our Country! One only needs to see the political influence that the Kock Brothers and the Walton Family are now wielding to get a glimpse of our future! Since GW Bush packed the SCOTUS Big Corp.’s and their Shareholders will continue to feed off of all the low hanging “fruit of our labors” while the middle class that is doing all the laboring becomes ever more like those that are poor. If the international trade agreements pass, then this process will accelerate and lead to political strife in the USA that will make what is now going on in many other parts of the World look tame because Americans not only own guns, but many are now highly trained combat veterans…