Lack of retirement saving paints a scary picture

An editorial from The Herald-Dispatch

HUNTINGTON, W.Va. — To say that many Americans are not financially prepared for retirement is quite an understatement.

An estimated 44 percent of baby boomers who hope to retire in the next few years are at risk of coming up short on money for the basics — food, housing and uninsured health costs, according to the nonprofit Employment Benefit Research Institute.

For many low-income families, that shortfall can come very quickly, even in the first or second year of retirement. But the EBRI’s long-term models also show that many higher-income households can feel the pinch deeper into retirement, especially when nursing home and other health-care costs come into play.

Unfortunately, the forecast is not much better for the generation that will follow, those who are 34-49 today, the study shows.

Although private industry pensions have been on the decline for decades, Americans have been slow to start saving on their own for retirement.

For many companies, those defined benefit pension plans were typically replaced with 401(k) programs that allow employees to have money deducted from their paychecks and placed in a tax-free retirement account. Some companies even match a portion of the savings.

But the EBRI reports that 46 percent of workers do not participate in the 401(k) plans available to them, and 32 percent of all full-time and part-time workers do not even have access to such a program…

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