In a financial article recently published by Forbes Magazine, contributor Ed Swindle discussed several of America’s most famous retirement emergencies and how they correlate to modern hardships. According to the Forbes article, the United States retirement system is set to collapse within the next two decades or so, placing the security of many seniors in jeopardy. For decades, politicians have argued about the necessary steps to implement to ensure that seniors who have paid into the retirement system are able to receive financial benefits during their elder years. This has been to no avail, however, as partisan politics have continued and no long term solution has been implemented.
Several times in American history have made a significant impact on the future of the national retirement system. In the early 1940s, the 401K plan was introduced as a suitable alternative to the traditional pension plans that were in place for the average American worker. Because 401K plans were funded by the employer while pension plans were funded by the employer, these plans became attractive to large corporations and employers. Slowly but surly, 401K plans began to replace traditional pension plans in almost every major American industry. By the time the 1962 fiscal year ended, only 20 percent of the American public was still enrolled in an employer funded retirement pension fund. The majority of the country had moved to 401K plans.
As a result of the combination of a national move to personally funded 401K plans and the ill supported social security system implemented by the federal government in the 1960s, financial predictors began to predict a large scale failure of the American retirement system. Right on schedule, American politicians and legislatures began to attempt to divert the blame for this coming crisis onto the opposite political party, when the fact remains that the last 8 congressional bi-partisan groups have made little to no effort to divert the coming disaster. Ed Swindle, the author of the Forbes article, suggests that families prepare individually for the retirement crisis because reliance on the government, at this stage, would be detrimental.