There has never been a generation in better shape for retirement, even with soaring inflation and volatile markets.
This is a hard time to retire. The market is down 7% from last year and the rate of inflation has risen to 8.5%. Both are brutal to your bottom line when you’re on a fixed income. But buck up! As bad as things seem, odds are you are in better shape than your parents or grandparents were. And if they got through retirement comfortably, so will you.
If there were a golden age of retirement, it would be now. For most of human history, people worked until they were physically unable, and then spent the remainder of their lives either poor or dependent on family. This changed in the early to mid-20th century, when many economically developed countries adopted various pension programs that paid income through retirement. The U.S. pays Social Security benefits and also offers tax incentives for employers to offer retirement plans.
It’s tempting to idealize the 1960s and ’70s, when companies mainly offered traditional pension plans that paid a stable income until you died. But taking on all the market and longevity risk of workers was expensive for employers. Once companies were required to adequately fund their pensions to account for that risk, most dropped them. Read More….