News
News Home
Quick Bites
Exploradio
News Archive
News Channel
Special Features
NPR
nowplaying
On AirNewsClassical
Loading...
  
School Closings
WKSU Support
Funding for WKSU is made possible in part through support from the following businesses and organizations.

Akron General

Meaden & Moore


For more information on how your company or organization can support WKSU, download the WKSU Media Kit.

(WKSU Media Kit PDF icon )


Donate Your Vehicle to WKSU

Programs Schedule Make A Pledge Member BenefitsFAQ/HelpContact Us
Economy and Business


Many boomers are ill-prepared for retirement
Older Ohioans who once got pensions, and now have 401k plans, worry about their financial future
Story by DAVID C. BARNETT


 
Download (WKSU Only)
In The Region:

The Wall Street financial crisis that swept over the economy like a rip tide has had some long-lasting effects. It sucked away home value, investments and nest eggs. People near retirement age need to make up for their losses in a hurry. But for most, those resources weren't adequate in the first place. From Ohio Public Radio member station WCPN, David C. Barnett has more.

Many boomers not prepared for retirement

Other options:
Windows Media / MP3 Download (3:48)


Sixty-one-year-old Bob Scherry figured he had a pretty good retirement program when he was a sheet metal worker, in the 1980s.  His company provided a pension plan that squirreled away money for employees in their golden years.

BOB SCHERRY: You didn’t have to think about it, it went in automatically. 

With a pension the employer takes all the risk and responsibility of investments and guarantees a set monthly stipend to retirees for the rest of their lives.  But pensions have gone out of favor with employers.  Today fewer than one in five private sector workers have them .

Most employers have switched to so-called 401(k) programs.  Named after a subsection of US tax code, they guarantee a defined contribution from the employer but make no guarantee on outcomes.  The employer’s contribution along with the employee’s is invested in a select group of mutual funds, real estate trusts and fixed income options.  It’s up to the employee to decide where exactly to put the money within the range of choices offered. 

Bob Scherry’s current employer has a 401(k) retirement plan.  He says that’s been a challenge, because he’s no investment whiz.

BOB SCHERRY: I don’t have the smarts.  401(k)s you have to think about, or trust somebody to administer the plan for you. 

Scherry is not alone, according to J.B. Silvers, a finance expert at Case Western Reserve University.

JB SILVERS: A typical employer might offer 50 different funds for people to choose from, under the theory they’re able to choose, and have the knowledge to do that.  And overwhelmingly, they don’t do a very good job.

Westlake-based retirement plan consultant Dave Kocsis blames widespread financial illiteracy. 

DAVE KOCSIS: People need to start learning in grade school and high school how to be financially self-reliant, and not just how to balance a checkbook, because that’s really not even relevant anymore. 

One of the most common missteps people make is not saving enough for retirement.  Studies show only 1 % of people with 401(k) plans contribute the maximum allowed; 20% of workers eligible don’t participate in a plan at all. 

And there’s this from a Boston College think-tank.  The Center for Retirement Research calculates that the typical household with two workers in the 55 to 64 age range has about $120,000 in retirement savings.  That would provide a measly $7,000 a year.  The typical household needs at least four times that much, plus Social Security to maintain their standard of living.

Not only do we put too little in, we take it out too early.  New data show a record number of workers raided their retirement funds during the recent recession to make ends meet. ---

DAVE KOCSIS: … taking care of their families, just putting food on the table, putting kids through college --- whatever the case may be.  Now, they’re trying to shovel in as much money as they possibly can into their retirement accounts. 

J.B. Silvers of Case Western says the shovel isn’t big enough and that’s going to cause huge problems over the next twenty years, especially for those now hitting retirement age.

JB SILVERS: They probably won’t have enough time until retirement to make that up, and they may not even understand how much they have to save to be able to have a chance at retirement, either. 

Some financial experts say it’s time to overhaul or even scrap the 401(k) system; replace it with something that presents less risk for the average investor, mandates employee contributions and totally prohibits access till retirement age.  Otherwise, critics say, many more people may be standing on the edge of poverty in their old age.

Add Your Comment
Name:

Location:

E-mail: (not published, only used to contact you about your comment)


Comments:




 
Page Options

Print this page

E-Mail this page / Send mp3

Share on Facebook



Stories with Recent Comments

What the U.S. Supreme Court ruling means for early voting
r.gov trying to slow down voters to stop the people from voting out the r. govener

Cleveland Orchestra heads home from Europe
So proud to be a lifetime Clevelander! Yes, our Orchestra is the best ambassador a city could hope for! My wife and I happened to hear the European Festival T...

Northeast Ohio undocumented immigrants praying for a miracle
Stop it, just stop it. They are not undocumented but illegal aliens. I live in a 'sanctuary' city and it's not pretty. Dahlberg is a notorious trouble maker in ...

Ohio survey shows low-income people are choosing phones over food
Where is this study published? no sign of it on google scholar. is there a cite

The Akron Sound rocks the porches
fabulous group interview! you covered so much in so little time. wish i could be there for porch rockr.

Head of Ohio Dems says Kasich administration is lying about Suarez contacts
when Kasich's mouth is open , he's lying. Look what he did at Lehmans brothers and then lied about it all during the campaign. If a GOP didn't lie, he or she ...

Canton's Basilica of St. John absorbs news of the pope at morning Mass
Hello Chris,Marina,and Patrice, I just read this article and you all look great. I'm on facebook Jean Dutcher in blue and white stripped blouse. I"M so glad to ...

Exploradio: Avoiding the 'acting-white' trap
Growing-up black and being black should not determine that you will not speak well or will not be a high achiever in your goals in life.But society te nds to la...

Charter-school supporters to rally at Statehouse
I am on the bus now headed to the rally. Horizon is an excellent school. My son is is 7 th grade. The teachers and administrators are top notch and spend so m...

Former Nursing Home Land Added to Parks
In addition, LED technology also plays a very important role in advertising- LED placard is very, very useful for shop owners.

Copyright © 2014 WKSU Public Radio, All Rights Reserved.

 
In Partnership With:

NPR PRI Kent State University

listen in windows media format listen in realplayer format Car Talk Hosts: Tom & Ray Magliozzi Fresh Air Host: Terry Gross A Service of Kent State University 89.7 WKSU | NPR.Classical.Other smart stuff. NPR Senior Correspondent: Noah Adams Living on Earth Host: Steve Curwood 89.7 WKSU | NPR.Classical.Other smart stuff. A Service of Kent State University