MarketWatch recently published an article by Angela Moore, titled “Why Retiring In America Has Become Less Attractive”. I would suggest that most Americans find the idea of one day retiring to be very attractive.  I would propose an alternative title which would read, “Why Is Retiring In America Less Attainable?”

The  MarketWatch article highlights the fact that the U.S has fallen 3 places in the Natixis Global Asset Management Global Retirement Index. The index ranks 43 mainly developed countries on their ability to offer its citizens a secure retirement.  We now rank a very unimpressive 17th.

We’ve been highlighting the fact that the move away from defined benefit plans to defined contribution plans will produce profoundly negative social and economic ramifications, and they are clearly beginning to materialize.  According to the article, the U.S. took hits in income equality, health care spending and life expectancy. Despite America’s high income per capita, we have the sixth lowest score for income equality, suggesting that retirement saving is difficult for average workers.

Why should that be a surprise? We’ve been highlighting the fact since KCS’s inception (2011) that asking untrained individuals to fund, manage, and disperse a retirement benefit was an incredibly challenging task made more difficult by the fact that wage growth has been stagnant for two decades! According to the National Institute on Retirement Security,  the median retirement account balance is $2,500 for all working-age households and $14,500 for near-retirement households. That won’t get most people through half a year let-alone an average retirement of 20+ years.

Winning the lottery is not a sound retirement strategy, yet that may be what our future retirees will need to one day retire!