Isn't this the very definition of propaganda?
Please read this excellent article, though the article is NOT excellent because of its accuracy or potential... but because it gives the lie to most of what people believe simply because we have said it over and over again.
Let begin by saying that I do not take exception whatsoever and in the extreme with the premise that we in the West, and America in particular, need to save more. So far, accurate and truthful (it always helps to mix in a little bit of truth with your propaganda). But let me break out my calculator, my brain, and my understanding of e (in both directions... things can grow AND contract).
The comparison is to a time when workers received pension benefits from a corporation (as many government employees now do, but just give me a minute) thus removing them from the responsibility of providing for themselves... and then how the corporations and non-profits went over to 401k and 403b savings plans with the onus on the individual and not the operating entity. You know what you NEVER see in these articles? You never see any mention of WHY.
Every actuary on the planet knows why, but somehow every reporter and every politician just can't seem to grasp it. The old corporate pension system has, or had, the exact same mathematical liability (certainty) that Medicare and Social Security system has. They are all, ALL, pyramid schemes... and all, ALL pyramid schemes eventually collapse as the supply of new contributors cannot grow exponentially indefinitely. PERIOD. Every numerate person on the planet knows that anything growing exponentially will grow to infinity... and since it is not possible for the supply of new workers/contributors to grow to infinity each and every Ponzi/Madoff scheme - be it Medicare, Social Security, the old Corporate Pension system, the current public employee pension system - will absolutely, positively collapse at the point when the distributions overtake the the contributions with a slight lag time.
The problem is that 96.435% (my own estimate) of the American electorate are innumerate (with 100% of the Left, the Media, Liberals, Socialists, either being innumerate OR really, really devious). This is not true of the Actuaries running the Corporate pension systems. They saw this MILES away and YEARS ago (not that it was hard to see), and so they lobbied for the 401k and 403b legislation... and here we are.
Note to you Lefties... this is NOT up for debate. This is not an opinion. These are the mathematical, social, and political facts. You can argue over the motivations and interpretations if you like, but as the Late, Great Senator Daniel Moynihan famously said: "everybody is entitled to their own opinions, but not their own facts".
With me so far?
Now, let me turn my calculator on you Right Wingers. This passage is from the article and the math is accurate:
Here's more bad news: Just saving a lot isn't going to be enough. Let's say you're 30 years from retiring, you earn $100,000 now and you guess that your income will go up by about 3 percent a year. Even if you earmark 10 percent of every paycheck for your retirement and your employer adds another 5 percent, you'll have set aside only about $713,000 by the time you stop working. That's half of what you'll need for that $50,000 annual income.To live comfortably in retirement, whatever you save has to grow -- and its growth has to beat inflation by at least a percent or two. Here's where time is your ally. Take the example above, where you're earning $100,000 a year: That first $10,000 you set aside in 2010 will have become more than $30,000 in 2040 if it grows by 4 percent each year. If it grows by 6 percent, you'll have more than $50,000. And whatever your employer put in will have tripled or quintupled as well.
In order for folks to meet their own expectations, the expectations that were created during the early stages of the pension Ponzi scheme, they will, by mathematical NECESSITY, need to save roughly 25% of their lifetime's income for use during their later years... or in other words, each and every household in America would, in that scenario, have a net worth of $1.5 million at a minimum. Anybody care to guess what the average American household's net worth is RIGHT NOW? Less than 10% of that figure. (The top 25% hold over $1.5 million is assets on average, with a BIG chunk of that their home and home don't count toward retirement income) but that is not the correct measure... MEAN would be the correct measure - but even if you went with average 75% of the people do NOT make the cut... and by a long shot).
(Yes, I know the wealth distribution knuckleheads think that all we'd have to do is redistribute wealth and "problem solved" - besides suffering from the fallacy of misplaced concreteness those folks do not consider the unintended consequences of their proposed policy. Then again, what idealistic teenager ever does?)
Even if it were possible for everyone to save $1.5 million over the course of a life time... or forget it... its NOT POSSIBLE. Average family income is just over $60,000. Either GDP has to quickly triple, with all of that outcome's concomitant effects on food, water, the environment, politics, international impacts, etc... (and by saving so much - keep in mind the "paradox of thrift" - I can guarantee that it would not happen for a generation or 2 in any event).
Sooooooo.....
Why is this drum being beaten in every corner of the realm? In order for the 2 headed one party system to continue to engage in the "Blame Game". Though there are PLENTY of people that have figured this out and have lived their lives accordingly, the vast majority is easily swayed by the silly machinations of The Powers That Be.
As I repeat ad nauseum... there is no "solution" for impossible expectations, absurd belief systems, and innumerate electorates... just more hot air, anger, blame, and hate.