Saturday, July 02, 2005

Commentary: The Sun Sets On the Golden Years

Writing in The Nation, William Greider writes that many millions of baby boomers are realizizing as they approach retirement age that they can't afford to retire at all, much less retire early. Focusing on savings need to ensure a solid retirement, Greider says that "[t]he fundamental truth (well understood among experts) is that individualized accounts can never match the investment returns of a large common fund, broadly diversified and soundly managed, because the pension fund is able to average its results over a very long time span, thirty years or more." Suggesting that a "mandatory savings" solution might be required, he writes:
While most politicians don't dare embrace a "mandatory" solution--not yet, anyway--it is not self-evident that ordinary Americans would reject one, if properly educated about the alternatives. Most people are conflicted. They know they need to save more--retirement is a very meaningful investment for them--but it's very hard to accomplish, given the competing pressures. They like the concept of personal accounts but are also aware of their vulnerability as amateur investors.
For discussion of this article, see comments posted on AlterNet.

Source: " Riding Into the Sunset" The Nation (June 27, 2005)

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