Is there a retirement crisis? The debate centers on how much people have saved or set aside for retirement. But the focus on savings amounts misses the point. Retirement isn’t about achieving some magical retirement savings number. Instead, it’s about generating sustainable cash flow to meet your goals, needs and wants.
The pivot from defined benefit pension plans to 401(k) plans in the private sector not only requires people to be responsible for their own savings, but also their own retirement income.
Gone are the built-in annuity and pension payouts. The shift places the savings, investing and income generation burdens onto the individual. But with concerns about Social Security funding and its reliability in the future, individuals feel uncertain about generating retirement income.