Posted by More than 40 years ago, 401(K) and IRA were born.
Those huge Americans who were born from the baby boom "chosen" by the huge social experiment of 401(k) and started to work in the 70s and 80s, after more than 40 years, from the traditional pension system to the 401 After the long migration of (K) and the IRA system, now it is completely exposed toNew crown pneumoniaThe financial shock caused by the epidemic.
For the first group of people who entered the 401(K) system,New crown pneumoniaThe epidemic ruthlessly destroyed their "American retirement dream."
The first batch of 401(K) starts to cash out
Professor Alicia Monnell, a researcher at the Boston University Retirement Research Center, did a study before the outbreak of the new crown virus. The study investigated the first batch of people who used the 401(K) account system to replace the traditional pension system. Happening.
This group of people is now between 55 and 60 years old and belongs to the late baby boom generation.
The results of the investigation were "quite terrible."
The more money you put into your 401(K) account, the less money you save
Professor Alicia found that in 401(K) and similar retirement plans, the pension money saved by this group of people needs to beIt is far less than the pensions saved by the older generation at their age.
The middle-income late baby boomers saved less than US$50 in the early 30,000s. In contrast, the early baby boomers saved US$55,787 and the mid-term baby boomers saved US$50,787.
This conclusion is confusing and abnormal.The more time Americans spend in 401(k), the less they try to save.
The researchers concluded that the main culprit was the Great Depression.The Great Depression has dealt a much greater blow to the late baby boomers who started to use the 401(K) system than the older generation.
The early baby boomers looked good, but when they were in their 40s, the 2008 financial crisis came, destroyed their wealth and caused a new recession-for those entering retirement age, At that time, it was difficult to find a job and income was lowered. As a result, the "retirement dream" of this generation was not satisfactory.The study warns that the post-80s post-90s and post-00s post generations also seem to be on a similar trajectory.
right now,New Coronary Pneumonia OutbreakIs impacting our livelihoods and retirement savings.The final loss is unpredictable, butAffected by the new crown pneumonia, the volatility of the US stock market has exceeded any time in history.
In the recent market sell-off, Americans who use the IRA and 401(K) system for retirement savings once again "take all market risks."
Will the pension account rise back?
Post-80s, post-90s, even post-00s, always think we are awayThe retirement period is long enough, and the market has enough time to restore our 401K and IRA accounts to expectations.Is it really like this?
The answer is rather gloomy.
On the bright side, if we are very young now, stock prices that are currently plummeting may help us obtain higher returns in the future.But this is assuming that we now start to save money and invest in this point according to this strategy, and we have to stick to it.
In the American Life Insurance Guide Network ©️In last week’s report, Because of the impact of the new crown pneumonia virus epidemic, the United Statesunemployment rateCreated a record high,More than 3 million people have lost their jobs, and the company has started and stayed without pay.In such a social environment and specific conditions, it is actually very difficult to achieve the above-mentioned points.
On the contrary, we, who are in short supply of cash, may be forced to choose the most unfavourable opportunity to take money out of our retirement account in advance in order to tide over the current difficulties.
401(K), semi-finished system with risk?
After reviewing the account status of the previous generation and the retirement dilemma faced by us, we can't help but start thinking about the system "risks" of 401K and IRA from a fresh start, and hope that we will not encounter the impact of the next cycle of reincarnation.
"A system based on a 401(k) system can't protect the working people from such shocks at all," said Nari Lee, director of the Safe Retirement Program at the University of California, Berkeley.
"No one can deal with it alone."
(>>>Recommended reading: gadgets｜The American Personal Pension Smart Calculator, how much do I need to save every month?）
IRA, the future of 401(K)
OnNew Coronary Pneumonia VirusBefore the epidemic ravaged the world, experts and legislators had discussed and reconsidered the 401(K)-based system.Should we go back and diversify the risk of retirement funds?
One of the ideas is to let the 401(K) system revert back to the traditional pension system, using similar"Annuity" as an insurance product,ComeTo ensure that we have money for the rest of our lives.The other way is to strengthen the social security pension program of the people across the country.
"(Cash) savings are very important in the short term," Nancy, a former pension lawyer, said in Bloomberg Businessweek. "But forRetirement incomeSay, what we need is'保险'.Social security pension is just one'保险''.
At the end of the article, I once again quoted the famous 60(k) question on CBS's "401 Minutes":
"What kind of retirement plan is it that will allow millions of people to lose 30-50% of their life savings when they are approaching retirement?"("What kind of retirement plan allows millions of people to lose 30-50 percent of their life savings just as they near retirement?"）
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(>>> Further reading:Retirement in the United States: 401 Mysteries of the 7 (K) ）
