The Retirement Conversation
Over the weekend Ezra Klein penned a nice column reminding us that the Social Security shortfall, state pension plan underfunding, and the declining value of 401k accounts are all related. The first two overlap on how demographics and the aging of the Baby Boomers will affect us all, while the latter two overlap on how the Great Recession left stock market investments decimated. Klein writes:
The failure [of the 401k], experts say, basically, is this: The typical worker approaching retirement needs about $250,000 in a 401(k). Most don’t come close. The average is closer to $98,000 – only a bit more than a third of the recommended amount.
That’s necessary context for considering the arguments over Social Security and state pensions. In both cases, most of the solutions don’t solve the problem so much as switch to a different one. The costs come off the