A few decades ago, Americans had a pretty solid three-legged retirement stool. Social Security and personal savings combined with traditional pensions led to good middle-class retirements for millions. But today’s stool is a little too wobbly to support that lifestyle for coming generations of workers and retirees. The Great Recession shows all of us just how vulnerable 401(k) type plans and IRAs can be, and with the savings rates dangerously low, the need to strengthen the system is clear. Today, workers are largely responsible for their own retirement investments. The days of a defined benefit pension that you couldn’t outlive are a thing of the past. Today, we have to take greater ownership for starting our savings, managing and then figuring out how much to draw in retirement.
Most workers need advice on how to invest their 401(k) and IRA savings. Too often, that advice is not delivered in the customer’s best interest. The Labor Department is working with the financial services industry, consumer groups and Members of Congress to come up with a plan that protects retirement savings from financial conflicts of interest.
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- Ask students to analyze their current assets and liabilities for retirement planning.
- Will your students’ spending patterns change during retirement?
- What are the basic steps in retirement planning?
- Why is retirement planning so important for today’s workers?
- Can you depend on Social Security and your company pension to pay for your basic living expenses in retirement? Why or why not?
- Why is it important to start early for a secure retirement?