Are we on the verge of a retirement crisis?

Posted On November 4, 2018

Are we on the verge of a retirement crisis?

It depends on who you ask. Conflicting reports abound on the state of American retirement plans. Some say we, on average, are looking OK. Others say we aren’t even close to being ready.

Wesley Carpenter, a financial planner with Merrill Lynch, offers his take in the latest episode of “What’s Working with Cam Marston.”

Corporate America has shifted from pensions toward 401k plans – fewer than 20 percent of private sector employers still offer a pension plan, Carpenter says, down from over 60 percent in the early 1980s. That shifts the responsibility for retirement planning to employees, and he questions whether the average American has the financial know-how to properly prepare.

“Most of these Americans probably don’t have the resources, probably don’t have the tools or the education and the time,” he says.

To illustrate his point, Carpenter notes that the average American has less than $100,000 in retirement savings. Many Americans remain largely reliant on a Social Security system that may no longer be solvent in 15 or 20 years. And healthcare costs continue to rise, making it difficult to accurately forecast for future financial needs.

“Health is really the main concern that we see because it’s the great unknown,” Carpenter says. “Since 1982, the overall cost of living has doubled, while the cost of healthcare has quadrupled. If you think about those numbers, how do you plan for the great unknown?”

So are we heading over a cliff? Carpenter says there are plenty of reasons to be concerned, but there’s still time to get on the right track – both individually and as a nation. Long-term planning is essential, and while politicians may be loath to address the tough issues, Carpenter believes their constituents may make them step up to the plate.

“I really do think you’re going to consistently see massive changes in what happens in the next five to 10 years,” he says, “and I think it’s going to be voter-driven.”

Join us for a sobering discussion on retirement and what you need to consider to make sure you’re as ready as you can be.

Categories: Retirement, What's Working with Cam Marston