Ending America's Retirement Crisis

Posted by Bethany Wood on Tue, Jan 21, 2020
Bethany Wood


In a previous blog post, we discussed the retirement problems that are plaguing the older generations in America. In this post, we will talk about ways we can solve this problem for future generations. The youngest adult generations are currently Millennials (born 1980-1994, ages 25-39) and Generation Z (born 1995-2015, ages 4-24). Since 2016, Bankrate’s March Financial Security Index survey has consistently seen 20-21% of Americans reporting that they do not save any money at all, for anything, including retirement. In the 2019 survey, 20% reported total savings (for any combination of retirement, emergency funds, or other financial goals) at 5% or less of income, 28% reported 6-10 percent saved, 10% reported 11-15 percent, and only 16% reported above 15 percent. 

There are many differences in today’s work culture that were uncommon among previous generations. Today we have a huge “gig economy,” meaning more and more people are working as freelancers—Uber drivers, small business owners, bloggers, AirBNB hosts, contract work, etc.— which has no consistent income and no 401k to rely on. In previous generations, nearly every working adult had a pension or 401k and social security. The pension benefit model is no longer common and 401ks aren’t the safety net they once were. People have been left to manage their money for themselves regardless of their line of work or employer benefits.  

Many feel overwhelmed and anxious about retirement planning and saving—it’s not like you get a do-over. Not only do we have to plan for retirement savings, but we must plan how much we can spend, how long we expect to live, predict medical expenses, and factor in inflation of medical and living expenses. Rhian Horgan, CEO and Founder of Kindur, a fintech company focused on retirement savings and advising, relates that even Social Security “expect[s] consumers to read and digest 300 pages just to figure out how to access their most fundamental retirement savings.” People feel on their own when it comes to retirement planning and savings. 

Nowadays, retirement is looking more like a gradual phasing-in rather than a hard stop at age 65. This can look like employees transitioning from full-time to part-time or finding a niche in the growing “gig economy.” With the responsibility of retirement savings fully on the individual, there is a lot more variance in the when’s and how’s of retirement. Some people never fully retire, while some use the F.I.R.E movement to retire in their 30’s and 40’s.  

No matter the “when” and “how” of your retirement choice, it’s imperative to find your purpose in retirement. Not everyone is happy playing golf or quilting for the remainder of their days—find what you want to spend your time doing in retirement and how you can get the most out of it. The amount of savings required will change drastically based on the answers to these questions.  

But that still leaves the question, what can banks do to help this changing economy and structure? For starters, consider a program that will help those with very little get started saving or partner with an existing program or fintech that does so. BreakingBanks Podcast host Brett King says, “there are plenty of companies happy to help consumers who already have a sizeable nest egg, [but] relatively few are focused on those who’ve fallen short on saving for retirement.” People are already overwhelmed and anxious, but sometimes just an account with a few dollars is what’s needed to get started in the right direction. Banks can help consumers understand that it’s okay to start small. Secondly, banks can support education initiatives. No matter your line of work, demographic, age, region, underbanked or unbanked, there should be initiatives in place to inform and educate about the benefits and necessity of retirement savings. And lastly, a common occurrence among younger generations is the lack of trust in “experts.”4 Millennials are much more likely to seek advice from a friend or do internet research. Many feel much more comfortable with automated systems that can calculate and manage retirement savings automatically. Banks might consider partnering with robo-advisors.   

No matter your position in the retirement crisis, there are steps anyone can take to help their friends, family, customers, or themselves secure their future.  



  1. Nicols, JP, host. “Solving Americas Retirement Problem.” BreakingBanks. 8 Aug. 2019. Retrieved from https://breakingbanks.com/episodes/ 
  1. https://www.bankrate.com/banking/savings/financial-security-march-2019/ 
  1. https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z 
  1. https://www.entrepreneur.com/article/241967 

Topics: Banking

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