Shifting to 401K for workers has not lived up to expectations.
Defined benefit pensions are a rare species today. In the early days of 401K’s, fees and other gimmicks screwed a lot of workers’ plans. Things have improved, but building a sufficient retirement plan combined with the paucity of real wage increases has not worked as well as the sold predictions. Especially with 42% of jobs paying at or less than $15/hour.
Toss in the 2008 crash and the 2020 crisis, a lot of workers are not nearly as vested as they should be. And that is why SS is still necessary to provide at least some security for seniors.
The administration has hinted at cutting back SS and Medicare after the election. Yet seeing how markets cannot only crash, but take a long time to rebound with the extra whammy of Treasury Bills, a long standing mainstay of retirees, paying zip, can we realistically keep this charade going?
Now that our debt load has been increasing to cover a tax cut, a recession, another more lopsided tax cut and this virus crisis, we have a problem. I fear that “let them eat cake” is not a viable solution.