And that's a sentiment I can get behind. The switch from defined-benefit to defined-contribution retirement plans was foisted on the American people with promises of "more choice" and "better control" over their own retirements, but has instead resulted in millions of financially illiterate workers who would have otherwise been taken care of at the end of a long career having to survive solely on social security. Yes, the new system gave people more control, and hardly any of them were ready for the accompanying responsibility.
The folks on this web site are clearly not the target audience. We generally understand both the theory and mechanics behind saving for retirement, and can use that system to our advantage. I think it is important to note, however, that most Americans are not part of this community, do not have this knowledge, are too distracted to manage their own retirements, and will thus exit the workforce woefully underprepared for post-career financial management.
I agree. Speaking as a Boomer myself, I think it's useful to remember that we are the first generation to be in control of our own retirements but I also think it's safe to say that most of us just didn't know what to do with that. Our post-WWII parents, for the most part, got married, bought a little house, stayed in it for their entire working lives - working for one employer - and at retirement time, had a paid-off house, a pension and some social security to live on. At the end of 35 or 40 years - voila, retirement was there. So that was the example we Boomers grew up with. Parents had no need to teach their kids about asset allocations, mutual funds, and all that. We were taught to "save for a rainy day" in a passbook savings account, back when savings accounts actually paid 4 or 5%. We even had "Banking Day" once a week in grade school.
Unfortunately, as the old system was replaced by the DIY 401K version, no real instruction manual came with it. In my case, back in 1981 I opened a 403B (TIAA-CREF) but back then, there was no investment advice as part of the plan, nothing much in the way of choices, nuttin'. I had three options: 75/25, 50/50, 25/75 (stocks/bonds). I chose 50/50 'cause that's what the nice lady in HR said most people choose. I was 24 at the time! Obviously, I should have chosen the 75/25 option but I had no one to advise me..no one with any experience in this investing stuff at all. Investing was for Rockefellers, Vanderbilts, and other robber-baron types, not Joe or Josephine Blow. It does sorta feel as if we boomers were all just dumped in the deep end of the retirement pool, sink or swim.
Having said all that, once Boomers wake up to the fact that their retirement looks kinda iffy if they don't get their act together, there's no excuse for not getting busy to repair at least some of the damage caused by their ignorance. Articles such as this one don't help at all; rather, they discourage Boomers from even trying because they promote the comforting idea that they're all victims of a bad retirement system when instead, they're victims of their own financial illiteracy. For tail-end Boomers at least, there's still hope if they'd just wake up to the fact that they're spending their money on a lot of wasteful crap. Even if you've made mistakes earlier (as I did), a 40% savings rate isn't impossible (or even that hard) once you get real about the situation you're in. Heck Congress even gave us a "catch up" provision to take advantage of.
Speaking from my own experience, the single biggest thing that has to happen is for Boomers to decide that their
freedom is more important than buying crap. But these Doomed Boomer articles never mention that.