The Retirement System Is Fundamentally Broken, Expert Says

Let me be blunt. The American retirement system isnt just struggling. Its fundamentally, structurally, catastrophically broken. And unless something changes dramatically, a lot of people are going to find themselves in serious trouble.

Teresa Ghilarducci is an economist at The New School whos been sounding the alarm for years. The 401(k) system that replaced traditional pensions was sold as giving workers more control. In practice, its been a disaster for the average American worker.

Heres the thing about 401(k)s: they only work if you can afford to contribute consistently, if you have access through your employer, if you dont raid your savings for emergencies, if you invest wisely, and if the market cooperates. Thats a LOT of ifs.

The median retirement savings for households approaching retirement is somewhere around $134,000. That sounds like a lot until you realize it might need to last 20 or 30 years. Research from the Brookings Institution has documented how the shift from pensions to 401(k)s transferred risk from employers to workers.

And Social Security? The trust fund is projected to be depleted in the early 2030s without congressional action. The future of Social Security is something every working American needs to understand.

The New York Times has profiled Ghilarduccis decades-long campaign to reform the retirement system. The American Dream included the idea that if you worked hard your whole life, youd rest comfortably at the end. For too many people, thats becoming a fantasy.