Pensions are increasingly a thing of the past. In fact outside of the public sector they are almost non-existent in compensation plans and we know what Americans think of public workers these days. The days of pensions are doomed.
Only about half of today’s workers have any retirement plan at all and most of those are underfunded. They will pay low monthly benefits and most retirees will outlive them.
Moreover, the stark realities of earnings and economics mean even programs like 401(k) savings cannot serve everyone. The simple fact is many people do not make enough money to save. As real earnings continue to decline in the United States, this problem will only grow.
And the future has the potential to add further burdens on retirees. Younger Americans in particular are being misled into believing that existing public programs like Medicare and Social Security are insolvent. They are less likely, therefore, to expect much from these programs and defend them. Overall the “government is the problem” ruse makes strengthening these essential programs less and less likely. Republicans — much to the harm of all, young and old alike — are winning the ideological and political battle on this one.
MyRAs (My Retirement Accounts) are not inherently a bad idea, but they don’t really answer the problems in America’s retirement system overall. Instead the MyRA essentially confirms them, admits that the retirement security in the United States is weak and offers a solution that looks like a lot of the solutions already available.
The real solution — stronger middle class, economic mobility, public investment in government programs — is getting away from us. Our parents and grandparents living in a country that invested in sound government and smart economic policy. It was an era of taxation, regulation, and public investment that gave us education, worker rights, and financial security as a whole so individuals could compete. Those days are gone. It’s hard to see how we can expect, therefore, retirement to be any better.
MyRAs really tell us that the world has changed. Retirement security sucks and there isn’t much that’s happening to change that. So open a savings account. It is comes close to being a white flag waved in the eyes of defeat.