Is a New Retirement System Necessary?

Everyone says that all your good deeds will merit rewards in the end – and that is what Paul Escobar, a Boston salesman who is currently unemployed, might be thinking. He had long been putting money into the 401(k) plan of his job and was quite hands-on when it comes to his allocation. He also put in a lot of his income into equities. But with the recession, he has currently lost around forty five percent of the balance – as well as his job, too. Since he wants to recover his losses, he has tried rebalancing all of his allocation. The forty two year old Escobar also says that he is still open to looking at other types of savings vehicles such as variable life insurance policy.

Welcoming New Reforms

Escobar does not think that the current 401(k) system has flaws, but he does welcome other types of solutions or reforms that could improve how Americans save up so they will have money for their retirement – even if such will necessitate government intervention. Escobar does not want to force himself to save along with other people – he clearly wants to be the one to decide for himself and be in a position to choose where he can get personal guarantees on his benefits. Such is seen as a dilemma – people need help, but it can also be hard to trust other people to do help manage this for them. One recent survey showed that a lot of people are now sending out some distress calls when it comes to all of their retirement savings – especially when it is about their 401(k)s.

Confidence Levels on the Low

The EBRI, or the Employment Benefit Research Institute had recently sent out the results of the annual Retirement Confidence Survey. The EBRI is a research group which is supported by the labor and business sectors, and it indicates that around thirteen percent of all the respondents actually felt that they have saved enough of their finances to have a comfortable retirement. This was down from the twenty seven percent that was the result of the 2007 survey. The recent retirement survey of Transamerica also shows that around thirty seven percent of all their respondents had planned to work even past the age of seventy and might not even retire.

One study conducted by the Barclays Global Investors indicates that ninety percent had mentioned wanting a 401(k) plan that could offer that guaranteed retirement income. According to Dallas Salisbury, the president of EBRI, these findings are not surprising. He maintains that people are putting a high priority when it comes to things like guaranteed retirement income. However, the surveys also indicate that they are willing to get it for as long as they are not required to give anything up – and that they could have access to that kind of money.