Confronting America’s Pension Problem – Black Enterprise

A brand new survey shows that while Americans remain optimistic concerning the length of their retirement, most retired employees say their primary source of income comes from Social Security.

Once most individuals start working, they would really like to spend the remainder of their years having fun with every thing life has to supply, but they find the trail to retirement comes with some challenges. survey conducted by Employee Benefit Research.

One of the common problems Americans face as they give the impression of being ahead to the Golden Years is straightforward – saving.

“Half of people don’t have a retirement account at work. And it has been this way for decades. So the situation is not any better,” Teresa Ghilarducci, a professor on the New School for Social Research in New York, told TheStreet.

“The biggest challenge is saving for retirement,” she continued. “But it’s close. Then it is rather closely related to the necessity to come to a decision what to take a position in. Then, it describes intimately tips on how to accumulate even $1 million, tips on how to accumulate it. In fact, the challenges are easy. It’s just accumulation – investing and accumulating. The biggest obstacle to people’s retirement is the entire package, the do-it-yourself package.

What’s more, she said this retirement challenge is “very American.”

“No other country does this in a way that requires as much acumen, discipline and worry and anxiety from its workers as the United States does,” Ghilarducci said.

She also mentioned the role employers play in the present state of labor within the U.S. and the way it exacerbates the present retirement problem.

“The reality is that Amazon has a business model of only keeping people in the warehouse for six or seven months,” Ghilarducci explained. “People include contract workers, temporary workers and dependent workers.”

While we still have a protracted solution to go, the professor offered an answer to America’s retirement problem, specifically specializing in how 401(k) accounts are “an inappropriate part of the retirement equation.”

“Almost everyone pays Social Security taxes,” Ghilarducci said. “So if we had a system where each time you get a Social Security credit, you furthermore may get a financial credit in your retirement account, we could solve the issue.

“Right now, we rely on employers to voluntarily sponsor 401(k) benefits, and that is not enough,” she continued. “And then the employee must voluntarily elect to participate in the 401(k), so those are two decisions.”