i'm antonio mora, thanks for join us. head over to aljazeera.com. ray suarez is up next with "inside story", have a great night. night. ♪ >> you have probably heard it's an age of personal responsibility. you don't want some big government getting you ready for retirement. make your own plans. paddle your own canoe. has this country moved away from millions with pensions to millions feathering their own retirement nest, something frightening happened. hah they either don't think they are going to live very long after they have

stopped working or very well, or maybe both. it's the "inside story." ♪ welcome to "inside story." i'm ray suarez. the big retirement account holder vanguard calculates that as of last year, the average worker between 45 and 54 years old, had less than $50,000 in a 401k retirement plan. think about that. about 15 years away from retirement and enough saved to withdrew just a few thousand dollars a year from savings. half of workers earning the minimum wage haveless than $10,000 saved up total, and you are not going to retire for very

long on that meager amount of money. during the good old days the company made pension contributions, you might have bumped them up, and you got a fixed amount per month, but fewer people work for companies that provided defined benefit pensions. these days you are encouraged to take care of this for yourself, millions using a devise originally meant for high-paid executives in place of an old fashioned pension. how is it worked out? in an era in which inflation is low, raises are tiny, and middle class families are working hard to pay college expense mortgages and retirement. analysis from the employment benefit research institute shows people in their 40s, not retiring tomorrow, but also not

included among those candidates who say they will protect if they change social security have less than $20,000 in their ira's. and during your golden years without the gold, this time on "inside story" joining me is the writer for 538.com, and diane oakley is executive director at the national institute on retirement security. monique looking over the numbers, it's dreadful. one quarter of all households with members 55 or older have nothing saved for retirement . this? >> that's a good question. i think everybody individually feels that they are not doing enough. everybody feels very anxious about it, but nobody realizes that the majority of americans are in the same boat. at all ages we're behind.

but people feel like it's a personal failure, when really it is a failure of the system. why a failure of the system. >> before 401k's look over, we actually had -- it was never perfect. only about half of workers had something, but they had spousal benefits with that, and the coverage was pretty even across race. blacks and whites were fairly evenly covered. the same thing with high school of college-educated workers, and that is still the case for pensions but not for 401k's. since 401k's have become the common retirement plan, there have been wide gaps opening up, and when youa up all of the groups not served by

401k's they are the majority of americans. and the majority are not doing very well. >> ben castleman, you could really go crazy if you read the financial pages online and in the newspaper, or watch financial television, because you are hearing, seemingly conflicting things. some say they oh, those retirement planners that you see, they are asking you to replace too much of your working life income, you don't have to save that $2 million figure, that's crazy. in that recent report that says that the shortfall is between 6.8 and $14 trillion, well, who could imagine that? and at the same time, when you do the numbers and find out the average person has enough money to get $600 a month just about in retirement, well that's not

enough either. >> yeah, i mean, i think we have a few intersecting problems here. the first is that a large number of americans and growing number of americans have no access to any retirement benefits whatsoever. about a third of workers have no access to any form of retirement through work, anything other than social security. then you have the problem that even people who do have these benefits, especially the 401k's that have taken over, those programs are poorly designed to encourage americans to save the kind of money that they need to. they put a lot of onus on people to make decisions that they are fangly not well suited to make. >> give me an example of the poor design. what kinds of things are we talking about that just don't work for people that have them?

>> for most companies you have retirement. and even a small tweak where people have to choose not to save and then actually to have those benefits ratchet up over time, can lead to much better outcomes. that still doesn't replace the traditional pension, but at least encourage people to make decisions that will built into this decision. >> diane, we are often told in retirement planners, live below your means, and every time i see that, i think, well, you have got to make quite a bit of money to live below your means in the first place. people have been struggling who have been working all through the recession. >> absolutely. we did a poll about a year ago, and we asked americans what are some of the barriers to saving? the number one point that came out for most people was my salary has not gone up enough

with inflation for me to be able to save. so then we asked people, you know, is there a retirement crisis, 86% of americans said there is a retirement savings crisis in the united states. and we asked them what were they going to go to -- what steps could they take? and what the step most people told us, they were going to send less money in retirement. well, we really need to get people to save -- >> the same people who said they weren't making enough now -- >> said they were going to spend less in retirement. >> when they weren't making any money at all. >> right. and we all know that most people when they retire are probably going to spend about 80% less, because they won't have to save for retirement, pay social security, get transportation to work every day, but you are having to save a lot less if you

are only going to get that $500 a month in savings. when you think about the fact that about two-thirds of americans have just one times their salary saved for retirement, and a lot of those retirement. >> golden age without the gold. stay with us. it's "inside story."

♪ >> you are watching "inside story." i'm ray suarez. golden age without the gold. this time on the program, we're looking at the widespread lack of preparation for retirement or under preparation for retirement. people are living longer, and big voices in the culture are saying conflicting things. one, you are going to spend a bigger chunk of your life in

retirement, so you have to save more, but people aren't doing it, or two, you'll just have to work longer, the whole idea of requirement was never meant to apply to almost a third of your life, except researchers say that people who intend to work into their 70s, aren't doing that either. . ben, one of the common things i heard people doing, during the time when they were shuttling through jobs more quickly, was cashing out of their 401k's, which the design of the program made it more simple to do. >> yeah, absolutely. and it's natural to do, you lose your job in the middle of a recession. you have this pool of cash, you have to pay your mortgage or buy food, so you dip into that. and not only do you eat into your retirement, a lot of people

ended up cashing out at the absolute bottom of the market, so by the time they were able to get back into saving for retirement, they missed a lot of the rebound in the retirement, and they don't have time to get back the money they lost. >> monique, listen to that example that ben just gave. cashing out at the bottom of the market. something a professional investor wouldn't do, but the 401k system seems to treat us all as if we are professional investors, and we're not. >> that's true. a lot of times we blame individuals for not saving enough. and yet how many people know how much they should save or invest. and in the wake of the downturn, it's understandable that people panics. one of the things that is poorly underis that 401k's are morei infe --

inefficient that traditional systems. so what happens to 401k investors they tend to do things like sell at the bottom of the market. and a lot of the people who did that were older workers who lost their jobs in the recession and were out of work for a long period of time. and what they had to fall back on was fairly meager savings. >> some people cash out every time they change jobs. certainly an error made by people in their 30s and 40s. but it seems like once you give it to us to do, it's natural, human nature. we do things like that. >> no doubt. you know, one of the things that i think is a real failing of the 401k type of plan is if you don't have a lot of money in your 401k, you automatically get cashed out.

especially if you are a young kid, and you are moving to a new job, oh, i can get this to get a that. >> in fact that are provisions in the law that allow you to pay for an end indication and a house with 401k money. >> you can. and if you put it towards investment. but if you are going to use it to buy a new car or take a vacation, that's different. if you are going to lose it to buy a house, a lot of people their house becomes a big asset. they might rely on it instead of their 401k, because they have to liquidate their house at some time. >> a lot of people in their 50s were doing cash-out reifies, extending the term on their mortgages. it seems like there will be a lot more people in their 60s and 70s still paying a mortgage.

>> that's true. there are startling statistics about people who are paying student loans often because of their kids, but still. i like to emphasize, though, we have never asked people to save this much on their own, and what really happened is that we switched from a pension system to a 401k system at the same time that we were cutting social security benefits. starting in 1983, we cut back social security benefits in the form of a higher retirement benefits, and people's wages started to fall behind productivity, so you had all of these adverse things happening at the same time, as we were asking people to take on more risks with 401k, and also to pay the bulk of the 401k. if they are lucky their employer puts $0.50 on the dollar.

so you had a lot more burden put on individuals for retirement at the same time that their benefits were declining . so i think there are a lot of people making bad decisions, but i also think the system was not set up to help people. >> golden age without the gold. stay with us. it's "inside story." >> that harmony, that politeness and that equilibrium that japanese people call "wa". at the other side of history, fukushima's heroes were not enough. people have lost their trust, especially in the authorities. the myth of nuclear energy, of it being economic, safe and clean has been swept away. >> "fukushima: a nuclear story," narrated by willem dafoe.

♪ welcome back to "inside story." i'm ray suarez. i have been waiting for candidates from either party to start making a big issue out of retirement savings. so many have saved so little. you would think politically poetent people over 50 would urgently ask about savings, and future stability of the markets. are you hearing that? my guests are with me. diane, if it comes up at all, it if comes up in the context of a

proposal to cut social security benefits, quite often on the republican side of the ledger. >> absolutely we see let's raise social security retirement age to 70. most people are not going to be able to stop working at 70. they are going to do it sooner. in addition to that, we hear these proposals about -- again, surfacing back, let's bring private accounts into social security. let's make social security more like our 401k plans. that kind of fell out of favor in 2007, 2008, 2009, and it's a proposal that is coming back again. at the same time we're just not thinking about where are people going to find the income. 87% of americans came back and said people in washington aren't paying enough concerns about retirement security. they think the system is broken.

they think it needs repair, but they are not hearing washington talk about it. i think this is one of those anxious -- moments for americans. >> are we looking at the sort of situation where it is going to take a crisis. people who are in their 60s and ill prepared so be 75 year olds before we gasp the needle? >> i think we are on the leading edge of this. if you look at people who are retired now, still a large per age have big pences, but you are starting to lose that. and if you talk to people in their 40s, 50s, even 60s, you will hear people say i plan to just keep on working. but that's not a viable choice for a lot of people. people in construction, nurses, who are on their feet all day. but only about a third of people are

working in their late 60s. only 20% or less are working at all into their 70s. so this idea that i'll just keep working longer is just not an people. >> when my father got ready to retire, he did it on the early edge. he was eligible, but he was going to take a ding on his check, and i said can you hang in there a little bit longer? give yourself a raise? and he said i have been standing on my feet for 45 years. i'm really tired. he wasn't playing with co come -- computers or writing code, he was working as a barber and shopkeeper for four decades, and he said i can't do anymore. >> i think that people underestimate how onerous it is

for so many workers. and one estimate is that about 40% of workers either have physically difficult jobs or are working in bad conditions where you have a job where you are standing, you are hearing loud noises. you might not have do heavy lifting, but nobody could ask that person to work until 70. people are working longer and longer, but they are doing so just to hold steady. but the other factor is it's not everybody's individual choice whether or not to keep working. your employer has to keep you on. and it's not like we live in a society that is free of ages. so counting on being able to work until 70 is not realistic for most workers. i think these are ideas that are thought of by frankly people who have comfortable desk jobs, academics, policy elite, who for them it's fun and interesting, and they want to stay on.

and i don't want to go on about this issue, but i think initial when people started talking about raising the retirement age for social security they expected it would sound better than it is. because it cuts benefits across the board and say you can -- make it up by working longer. the retirement age is going up to 67. and it was at least as unpopular if not more unpopular to say work longer as opposed to we're going to cut your benefits. >> everybody keeps saying well, the baby boom generation is now numerically smaller than the millennials, but minnelal don't vote, and people over 50 do. so be careful. >> they are there. and they also understand about

millenni millennials. they want a system that works for their grand children. if you look at women, ages 55 to 64, they are in the work force at the highest level they have ever been. six out of ten women in that age group are still working. and we also hear from women that they are working because they have to. and more so than men. so when we look at those type of data, we're looking and saying, people are trying just to hold on to themselves. they want something to be done. sometimes they need a bigger case and a challenge to come before them. seniors came back when there was a proposal by president bush to put private accounts in social security. the reaction to that was phenomenally negative in 2005 when that was put out into the marketplace, because people understood what that was going to do. >> it diverted up to a third of

the money going into social security into private accounts. >> and yet we're at the point where we are going to lose about 30% of social security in about another 15 years. we may have that crisis come because the social security trust fund is scheduled to run out of prefunding. >> ben, since you are the youngest member of today's program, you are going to get asked this question. every time politicians talk about possible benefit cuts. they always do this maneuver, where they say you people who already have gray hair, don't worry. we're going to do it to the younger people. economics? >> it may work in politics up to a level. seniors react negatively when they hear about cuts. but they have gotten to the point where they always say we'll protect you. people in their 20s, 30s, and early 40s, often see this as

being so far off. they are worried about student debt and worried about having to buy a home. when you start to see that is people in their upper 40s and 50s when retirement is looking like not just a distant thing. they heard about this talk. and if you here bernie sanders will talk about expanding social security, and hillary clinton talks about social security. and marco rubio is the only one who has a section on his platform dedicated to associates. chris christie talked about cutting benefits, and you see how far he got in the race. >> donald trump is i think saying that he doesn't want to mess with the current formulas, as they are. are we are going to hear more closer? >> i think so.

i think most of his support is personality driven but some of it has to do with the fact he is not messing with social security benefits. well, thank you, everybody. i want to thank my guests. that's the "inside story." join us tomorrow for a look at half of humanity. it's international women's day. join us then. i'm ray suarez. good night. ♪

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