By Hans Eisenbeis
What’s Happening
• As recently reported, fewer than one in three Americans believe they’ll ever be able to retire. And it’s not just the fact that the stock market and home values are tanking and taking retirement savings with them. What contributions were getting earmarked for long-term savings are now getting diverted.
• Companies all over the country are cutting back—or eliminating—matching contributions to 401(k)s and other employee retirement plans. A recent survey by consultancy Watson Wyatt Worldwide found that nearly 25 percent of its sample of large companies was planning to cut any defined-contribution matching program—or already had done it.
What This Means to Business
• While the personal savings rate is up, the retirement prospects for most Americans look terrible. The alternative? Any place to park cash tax-free for the long haul, like a self-defined retirement account that includes stable instruments like CDs.
• Most Americans expect to work until they die. That’s a sea change from the recent past, which suggests a massive shift in values.
• “Loyalty” to employees or employers might sadly be a thing of the past. But today’s elimination could be tomorrow’s reinstatement.
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