The Looming Retirement Crisis

Are mandated retirement accounts the answer?

June 06, 2011
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Here’s a frightening stat: One in four workers over age 50 burned through all of their retirement savings during the Great Recession, according to AARP’s Public Policy Institute.

On top of that sad statistic is news from the Brookings Institute that almost one half of U.S. employees now work for businesses that provide no retirement plan at all. That’s around 78 million people who will have nothing other than Social Security and any other savings and assets they manage to accumulate to support them in their old age.

Considering the paltry state of household savings in the U.S., the retirement picture for most Americans is increasingly dim—and it’s showing up in the expectations of a once confident populace. Almost one half of Americans lack confidence that they’ll have enough money to live comfortably in retirement, AARP reports.

Social Security—the easiest of our entitlement programs to fix in terms of economic and financial pain—is a perennial political football in the toxic, partisan mood that blankets our policy debates today.

Mark Condon
This is the first in a series of book reviews by Mark Condon, CUNA's senior vice president, business and consumer publishing, and other credit union movement leaders. Check back soon for the next installment.

Most private-sector companies no longer provide workers with traditional, defined-benefit pension plans. Most of those plans have been replaced by 401k accounts, which were designed to supplement pensions, not replace them.

Employee contributions to 401K plans are far below what they need to be to secure a comfortable retirement, and 401K matches by employers are susceptible to the whims of those employers.

Then there are relatively generous public sector pensions that are threatened by the poor condition of state and municipal finances—and a growing belief that government employees should not have more generous retirement programs than private-sector employees.

And while generous on paper, many public-sector pensions are grossly underfunded. Throw in dwindling or stagnant home values, the rising costs of health care, and the high percentage of workers over 50 that are unemployed or under employed—one way or another the ability to save for retirement is buffeted by strong winds of adversity.

Working longer and at lower-paying jobs to supplement Social Security is a future many workers now face.

Next: Solutions require practical and political will

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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