THE NEW RULES OF RETIREMENT SAVING • 23
• The fees are similar to their traditional counterparts: 1 to 2 percent a year.
If you’re thinking, “Gee, neither of these options sounds all that great,” you’re not alone. Many savers are frustrated with the op- tions available to them. That’s because in both Roths and traditional accounts, the bur- den of savings has shifted from the employer and a pension to you and however you decide to save. Regardless of the account type you choose, the responsibility is on you, not your company. So we know the employer leg of your stool is weak. Now you have you and the government left holding up your stool. How strong is the government’s leg? Social (In)Security Social Security is the way our government participates in your retirement income. Each paycheck you receive has a portion with- held for Social Security, in return for the benefit you’re promised in the future. Should you count on Social Security to help fund your retire- ment? Maybe not. I’ll explain why. Below is a paragraph the Social Security Administration is in- serting into the text on page one of every Social Security statement they send: “Social Security is a compact between generations. Since 1935, America has kept the promise of security for its workers and their families. Now, how- ever, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today's younger workers are ready for retirement. Without changes, in 2033 the Social Security Trust Fund will be able to pay only about 77 cents for each dollar of scheduled benefits.”
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