"Retirement," an ancient and outmoded system in which elderly people were able to stop working without starving to death, is little more than a faint dream of bygone days in modern America. Still, many of our readers harbor secret hopes of one day being able to retire in comfort. As a service to those readers, we bring you the very latest updates on why that will never, ever happen.
How could you successfully save for retirement, in theory? One popular way is with "target date funds," investments designed to ensure that your 401(k) is maximized for the specific date of your planned retirement. (Your own 401k could very well be in such a fund, if you had one.) You just put the money in and leave it alone and the investment company automatically keeps the balance of stocks and bonds appropriate for your age. Sounds easy, eh? Sure, but each company manages the funds differently, so if you pick wrong, you lose. From the NYT:
At T. Rowe Price and Vanguard, the other leading companies in this field, larger bets on stocks have helped target date funds outperform a majority of comparable funds over the last one, three and five years, according to a recent analysis done by the Center for Due Diligence. At Fidelity, the majority of target date funds have done worse over those periods. The three companies together control 76 percent of the $485 billion in target date funds.
So if you're in Fidelity and your retirement is near, sucks for you. Not to worry, though; when stocks inevitably crash again, the other companies will look like shit and Fidelity will look smarter. The only thing you can be sure of: when your retirement date finally comes up, the company you picked will be the one out of the money. It's just your luck.
But let's say you've amassed a lot of retirement savings, and you want to insure your savings against fluctuations in the market during your retirement, so you buy an insured annuity—you pay a hefty fee to a financial company, and they promise to pay you the same amount of money each year for as long as you live, even if the market tanks and wipes out the value of your portfolio. Sounds nice and safe, right? Except for the fact that if the market really tanks, the WSJ says that regulators fear that the companies that sell these products could be forced out of business—by their obligations to you, ironically. I hope you're happy. Now you have nothing. That's what you get.
In conclusion, nothing can insure you against the unpredictable market gyrations that will, in all likelihood, devastate our bloated economy during your most vulnerable elderly years. Take heart in the fact that this nigh-sure poverty looming over your "retirement" years can only accelerate death's sweet embrace. Uncertainty is the market's nature. The only certainty is your eventual doom.