Americans aren’t saving enough for retirement, especially the aging baby-boom generation. It’s a message we hear over and over, and the data are disconcerting. The Federal Reserve’s 2010 Survey of Consumer Finances puts the median balance in 401(k)s/IRAs for households nearing retirement at $120,000. The Employee Benefit Research Institute (EBRI) notes that 60 percent of workers 55 and older have less than $100,000 set aside for retirement. Blue chip consulting firm McKinsey calculates that two-thirds of boomers don’t have enough savings to maintain their pre-retirement standard of living once they’ve waved goodbye to their colleagues for the last time. http://www.businessweek.com/article...vings-stop-giving-tax-breaks-on-401-k-s#r=rss I don't understand how stopping the tax breaks on retirement plans would be any more beneficial than just defaulting to opt-out enrollment.
I think the proposal (and it's just a proposal by a tax law professor) is that if you really want to change people's behavior, which is the goal behind the 401 k tax exclusion, it's easier to just do it via this mechanism than by a tax break. I don't think the tax break on 401k's is going anywhere anytime soon though.
I wonder if this is a problem because: a.) People can't afford to put away money. b.) Some physcological pre-disposition of humans only worried about the now c.) Other I am young, college educated, and contribute 8% of my check to retirement. I did this from day one of "adult" employment, 3 years ago. Maybe its because of my finance/accounting background, but I still worry about my retirement, even with a healthy contribution. Even some of the younger people I work with (24 year olds) don't and I don't really know why. Sometimes I think the quality of life that post baby boomers have enjoyed creates an feeling of invincibility, since there hasn't been much true hardship, as compared to the majority of the world.
The generation probably most responsible for plunging us into debt is going to live off social security.
Man...talked to a good friend of mine three days ago from the Netherlands who is retiring in July. I had a hard time disguising my jealousy.
