American retirees are screwed. The 401(k) experiment has failed. Social Security's going bust. Savers haven't saved nearly enough and don't have the means to improve the situation.
However hyperbolic, this is the message that has been sent and, for many, is indeed the way it feels. But how do the facts play out?
- Many companies have abdicated the role they once played in helping support employees' retirements through defined benefit pension plans by promoting and then under-supporting defined contribution plans, such as the 401(k).
- Most pensions that remain — even those run by states and municipalities — are "upside down," lacking sufficient funds to pay what they've promised. The entity conceived to insure underfunded pension plans is also underfunded.