1. Not enough people even have a 401(k) plan. Fifty-three percent of the population isn't covered. Since fewer than 10 percent of the population has a regular pension, a huge chunk of Americans depend solely on Social Security, whose typical benefit is $12,000 to $20,000 a year.
2. Even those people with 401(k) plans can't retire because employers don't contribute enough. The meager three percent contribution rate is the lowest in the advanced world. Australia's contribution rate is equal to nine percent of pay. Denmark's is 11.8 percent, Hungary's is 8 percent, Mexico's is 6.5 percent, Poland's is 7.3 percent and the Slovak Republic's is 9 percent.
With the huge college loans the younger people now have, it's amazing if they can contribute anything to their retirement. One trip to the hospital will also ruin a person.
When 401(k)s became popular in the mid- late 80's, employers loved it because they could stop sponsoring a defined benefit pension plan and show - on paper - that combining the employer contribution with the employee's pre-tax contribution could - big word, "could" - result in a much larger retirement fund than what the employees had before. Not that the plans aren't basically good, but the sales job was all smoke and mirrors. The employer did not guarantee a contribution - and some don't make one at all. When the do make a contribution, it's usually a "matching" formula, rather than a direct contribution for all. Employers made - and are making - out like bandits, while real pension plans are almost as extinct as a platypus. Back in the day, employers used pension plans as an incentive for employees to spend a career with them. Now they wonder why "employees have no loyalty."
The recession of 2008 merely burst the housing bubble early. It lessens the impact of what demographics will do a decade later:
A very high percentage of baby boomers own property. But most of their wealth is in those houses; they don't have a lot of other savings. Many if not most will outlive those savings - especially with how many of them are living in McMansions.
And so a whole lot of them will have to downsize as they retire over the next decade or so. Which won't affect small homes or condos much, but McMansions and expensive condos are going to lose a lot of value. You could spend the next decade paying down your mortgage, only to lose what you paid when your house devalues by the same amount.
We're heading for this in Canada. Not only did we avoid the US's housing market collapse, but we a housing bubble right now. It's not as big as the pre-2008 US bubble, but you can see it just by looking at how housing prices have gone up much more than incomes over the last couple decades. And so we'll hit the demographic wall a lot harder.
Speaking of Canada, I went to a Blue Jays spring training game a couple of days ago. They thumped the Astros 10-6. Got to see Bautista hit a homer, swigged Labatt Blue (which BTW is pretty much dishwater) while singing "O Canada" along with "Star Spangled Banner." Parking lot full of Ontario plates. Stands full of SnowBirding Canucks. 77 and sunny. Really fine day.
O Really wrote:Labatt Blue (which BTW is pretty much dishwater)
Canadians drink Labatt Blue for its legacy and cultural importance, not for its taste.
I dunno if the Labatt Blue in the US is the same as in Canada. Labatt Brewing Company sold Labatt USA to North American Breweries a few years ago. They're the ones brewing it in the US. Or to be more specific, North American Breweries contracted production (for the US only) to Labatt archrival Molson-Coors.
It might be like how Guinness bottled/canned in North America shares only the name - and certainly not the taste - with the real thing.
O Really wrote:Labatt Blue (which BTW is pretty much dishwater)
Canadians drink Labatt Blue for its legacy and cultural importance, not for its taste.
I dunno if the Labatt Blue in the US is the same as in Canada. Labatt Brewing Company sold Labatt USA to North American Breweries a few years ago. They're the ones brewing it in the US. Or to be more specific, North American Breweries contracted production (for the US only) to Labatt archrival Molson-Coors.
It might be like how Guinness bottled/canned in North America shares only the name - and certainly not the taste - with the real thing.
While we're on the topic of Canadians and retirement plans, looks like I'm set:
Not from Canada. I get these all the time, usually targeting EU countries.
The phone number at the top is for Seattle, Washington. I expect that redirects to Britain. The Brazilian email address is probably checked from Britain. All the monetary figures are in British pounds. The contact phone numbers are from Britain.
Or more likely, everything probably redirects to eastern Europe.
JTA wrote:I guess Canada isn't all that bad despite their social-isms.
The same goes for America. They've been more social-ist than Canada for a couple decades now. They often do it better, too.
No way. With the religious right using Old Testament quotes to oppose same-sex marriage, others responded that the Old Testament also endorsed taking foreigners as slaves. There were unintended consequences.
Ever since, Canadians have had to be wary of Americans offering beer.
