You might have to work forever: The honest reality about Social Security and retirement

[HardLineDem]

40. You're right, but there was no "golden age" for retirement income hereabouts

You're right, but alas, the idea that "Just 30 years ago, most American workers were able to stop working in their early sixties and enjoy a long and comfortable retirement." ain't so. Aside from the rich, only those relatively few with really good pensions -- say, a minority of long-time union members -- could look forward to a comfortable retirement. Social Security has never provided a comfortable income, nor was it really intended to -- it was intended to provide a bare subsistence income, and has ceased to do even that much for increasing numbers of low-wage and undocumented workers.

There are at least three problems with the IRA/401k system which has replaced pensions and is to supplement Social Security income, while encouraging investment:

First, the only ones who are guaranteed to profit from IRA/401k investments are the money managers, who get fees no matter how the investments fare. Their fiduciary responsibility is to their own companies, not to the investors. By contrast, some public retirement systems (such as the California Public Employees' Retirement System, I think) are responsible to the contributors. Why isn't it all money managers?

Second, an increasing proportion of the huge mass of retirement investments just flies around within various fractions of the financial system. At some point, this has ceased to contribute to real productivity in the economy -- it's just more sales of derivatives of derivatives of derivatives of... I'm pretty sure that this means less real income for most of us while we're working.

Thirdly, who can afford to save enough? Adviser after adviser tells us that to have a reasonable income after retirement, we must invest not 3% of our wages in a 401k or the like, but a consistently much larger fraction -- say, 15% or more, from our twenties 'till we retire. How many people do you know who can do that? The minimum-wage worker? The unpaid intern? You?