America is facing several crises, both in the near and long term.
There's the debt crisis, fueled by rising health-care costs. That's a long-term problem.
There's the unemployment crisis, which threatens to leave an entire generation of Americans with low (or no) work experience. That's a short-term problem.
And then there's the retirement crisis, which is the simple fact that so few Americans have saved enough to fund even a spartan retirement. It's both a short- and a long-term crisis.
What can we do about the lack of retirement savings? I've got two videos to put it all in perspective.
One is a fantastic documentary by Frontline called "The Retirement Gamble." It's an hour long, but well worth the watch. It is one of the most in-depth -- and shocking -- looks at retirement savings I've seen. You can find it here.
The second is a clip from a recent interview I did with Liz Ann Sonders, chief investment strategist of Charles Schwab (NYSE:SCHW), discussing what employers and financial institutions can do to help Americans prepare, including what (NYSE:SCHW)Schwab is doing. (A transcript follows.)
Liz Ann Sonders: There's not a lot of confidence of saving for retirement. I think that's as much to do with the environment we've been in the last 12 or 13 years versus the fact that it's a 401(k) structure now versus a defined benefit plan. I mean, some of it is that because we used to just know it was there; we didn't have to worry about it, so some of it is now I'm left to my own devices, but some of it is just the sheer pain of the last 12 or 13 years.
That said, I think one of the trends in the business of 401(k)s, and certainly Schwab is very involved in this, is upping the level of education that is provided to employees so that they do not feel that they are just out there in the cold trying to figure this out. Whether it's brining on a firm like Schwab or developing internal resources within a company, so that the individual has that resource to go to, to help them plan out the retirement and figure out what their risk tolerance is and their time horizon and how they should structure the portfolio and how active they want to be in managing it or whether they want a more automatic rebalancing, so I think the trend is in place to figure out how we equip individuals a little bit better with this retirement that's more in their hands right now than maybe it was the case when 401(k)s first became possible. Assuming it's a tool that people opt to use, I think it's going to be a very valuable tool.