America's looming retirement crisis

It’s time to wake up, America. Yes, we have a debt crisis. Yes, we have a government spending crisis. And yes, we’re still recovering from the economic crisis.

But there is another crisis that no one wants to talk about — the looming retirement crisis. It’s time to take control of our retirement futures, which first starts by learning about it, and then doing something about it.

Millions of baby boomers are retiring over the next 19 years, but a significant number don’t have the savings necessary to make it through retirement comfortably. Meanwhile, millions of working Americans are putting off saving for retirement, and thus retirement savings accounts are woefully inadequate. Worse yet, there are some 40 million workers who don’t even have work-place retirement savings available to them.

How did we get here?

Retirees used to depend on a three-legged stool approach to retirement income: a pension, Social Security and personal savings.

These days, pensions are extinct for most people, while Social Security is on the brink of insolvency. Personal savings isn’t working for many either. The Employee Benefit Research Institute reported in March that 60 percent of American workers said the total value of their savings and investments is less than $25,000.

That’s a gut-wrenching fact that should give you a moment of pause.

Instead of a three-legged stool, we’re left with a pogo-stick that is difficult to balance our retirements on.

The current path is unsustainable and we need to strengthen and expand retirement savings plans so we have at least one leg to stand on. At my company, The Online 401(k), we are acutely aware of the retirement crisis.

Here is what we need to do:

1. Expand access to small businesses

Small businesses are the backbone of America, but they’re suffering more than anyone else from the looming retirement crisis. According to the Small Business Administration, workers employed by small businesses are the least likely to have access to employer-sponsored retirement plans. Further, 72 percent report having no retirement at all.

We need small businesses to see the value and importance of offering a retirement plan. Perhaps businesses should be incentivized to offer retirement savings at work. Most people don’t realize that the government is willing to pay you to save through tax savings. Either you get paid to save, or you pay the government.

2. Lower 401(k) fees

Do you know how much you’re paying for your 401(k) plan? AARP found about seven in 10 workers weren’t aware they were paying any fees for their 401(k) plans.

There’s a reason why the Department of Labor recently mandated that 401(k) providers disclose all of the fees they are charging you. Fees must come down. Reasonable fees to set-up and run plans is one thing – but taking a major bite out of your plan based on your plan’s balance and not telling you about it is entirely different. Don’t pay more than you need to.

3. Talk about it!

Earlier this year, some of my colleagues and I traveled across the country for six weeks to speak to everyday Americans about retirement. The overall sentiment of the country surprised me. Though there is a sense of awareness that things aren’t right, people were generally pessimistic when it came to their own retirements without realizing this is a countrywide problem that can be fixed.

People are talking about this in the retirement industry, but in order to solve the looming retirement crisis, all Americans need to join the discussion. Take an interest in the impact that it will have on your future and the future of your children.

Join the conversation by checking out the website we created for our road trip and documentary at www.brokeneggsfilm.

The looming retirement crisis will affect all of us, but it is avoidable. We need to redefine what retirement means, we need to think about our family structures, and we need to be willing to make short-term sacrifices for the greater good. We all need to save in order to literally save ourselves.  

This fatal combination of outsourcing our futures to the government, corporations abandoning their pensions, and people not taking personal responsibility and saving enough will hit us hard.  

What are we going to do when the majority of our citizenry is broke and looking to the government to help them?  What will happen to our taxes then? What will happen to our economy when no one has any money to spend? What happens when we outlive what meager savings we may have?

What happens indeed.

I implore you, be part of the solution, and not part of the problem. Step up, take personal responsibility, talk about it and for yours and my sake, please save!