A very sobering PBS (public broadcasting) TV show concerning the dire straits of retirement saving was broadcast a couple of days ago – I didn't see it, but was drawn to its website via this online discussion at Washingtonpost.com.
The simple take-home lesson is that most Americans are not saving enough for retirement and are likely to end up impoverished before they die.
A social security system that will only pay a small fraction of what will be needed, a health care system that is likely to cost each American $200,000 over the course of their retirement, the rapid freezing and outright abolition of traditional pension funds, and the burdening of Americans with saving schemes (such as the 401(k) plan) that require a relatively sophisticated understanding of investing plus the discipline to actually do it.
Americans need to save 15% of their salaries for 30 years to ensure a retirement that provides about 80% of their pay level. At a retirement of 65, you will need about savings equivalent to 6.3 times your salary; retirement at 60 requires 7 times as much.
Most Americans have nothing approaching that level of saving, nor are they currently saving at a rate to achieve that goal. Home equity values have been increasing, but then again so have loans against that equity.
It's all rather grim reading, and suggests to me that a happy retirement is not going to be the lot of far too many Americans in the not-to-distant future.