Marie Cocco: The ‘Comfy Retirement’ Dream Has Exploded

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from Truthdig:



The ‘Comfy Retirement’ Dream Has Exploded

Posted on Mar 11, 2009
By Marie Cocco


Rally, schmally.

I’m with the president on this one—not because Barack Obama’s administration has handled the banking crisis well (it hasn’t) but because Obama is fundamentally right about obsessive watching of Wall Street. Its jittery swings really do have a lot in common with those daily tracking polls taken during campaigns, which can move up or down on the basis of a speech that misses the mark, or a “Saturday Night Live” skit that hits it dead-on.

And at this point, we need to confront an elemental truth: No Wall Street rally can obscure the scary historical prospect that most Americans now working can expect to have less income security in retirement than their parents had.

That’s not saying much. The average annual Social Security benefit among current retirees stands at $13,864—roughly what a minimum-wage worker earns in a year. Half of all people 65 and older have incomes of less than $17,382 a year.

Still, millions in the current Social Security generation have traditional pensions from unions or big corporations, which once took pride in offering a retirement plan that guaranteed a lifelong, monthly income to former workers. But today, such pensions are all but extinct, pushed into oblivion by a corporate strategy of lowering costs by shifting to 401(k) plans in which workers save for their own retirement and manage their own investments.

No need to point out how this has worked: The median balance in family retirement accounts was $45,000 in 2007, according to the Federal Reserve. Now even those have shriveled with the stock market slide. And many employers have temporarily halted their matching contributions to 401(k)s as they struggle to weather the recession. ........(more)

The complete piece is at: http://www.truthdig.com/report/item/20090311_cocco_retirement/