Core Insights - The article highlights the increasing importance of maximizing 401(k) contributions for older workers approaching retirement, particularly those aged 55 to 64, who are the most likely to have maxed out their contributions in 2024 [1][7]. Group 1: 401(k) Contribution Trends - In 2024, nearly 19% of individuals aged 55 to 64 maxed out their 401(k) contributions, with the contribution limit set at $23,000 [2]. - Only 3% of workers younger than 25 contributed up to the 401(k) limit, indicating a significant disparity in retirement savings behavior between age groups [2]. Group 2: Retirement Preparedness - There is a growing retirement crisis in the U.S., exacerbated by rising costs, inadequate savings, and the potential depletion of the Social Security trust fund, necessitating increased savings for stable retirement income [3][4]. - Research from Vanguard indicates that older generations exhibit lower levels of retirement readiness compared to younger generations, which is measured by their ability to maintain a similar lifestyle in retirement [5]. Group 3: Factors Affecting Retirement Savings - Changes in the U.S. retirement system, such as improved access to defined contribution plans, have positioned younger workers to be better prepared for retirement than older workers [6]. - Strategies for older workers to improve their retirement readiness include increasing contributions to tax-advantaged accounts, delaying Social Security benefits, utilizing home equity, working longer, and reducing spending in retirement [7].

The life expectancy does not put a strain on pension system. But what has changed is over the past 20 years there was a regime of very low interest rates you know for lots of reasons. One of them was the financial crisis.A lot of it was the way that we managed our economies was to make sure that capital investment was low. That distorted a lot of decisions. But one of those things that it distorted is that the safe assets like government bonds didn't pay as much.>> The US is hardly alone in facing the comin ...

Retirement Crisis & Investment Security - A growing retirement crisis is anticipated, with individuals over 65 expected to comprise one-fifth of the US population within the next 5 years [1] - Millions are worried about the security of their investments and whether they will have enough savings for retirement [1] - Thousands of state employees in Rhode Island are locked in retirement plans with restricted access to their money [2] Rhode Island 401A Plan Issues - Rhode Island's pension system was overhauled in 2011, introducing 401A accounts for state employees [4] - Participants in the Rhode Island 401A plan cannot borrow against, withdraw from, or transfer their savings to other qualified investments until they stop working [5][6] - Two state employees have nearly $250,000 locked up in their accounts [7] TIAA & Annuities Concerns - TIAA manages retirement plans for 5 million clients, primarily nonprofit and government workers, overseeing over $1 trillion [8] - Annuities are criticized for lacking diversification and having higher fees [9] - Participants in the annuity are estimated to pay TIAA $4 million this year alone, significantly more than a lower-cost provider like Vanguard [10] - TIAA paid $97 million in 2021 to settle allegations of pushing clients into higher-cost accounts [10] Regulatory Scrutiny & Lawsuits - Regulators in Montana and Washington are probing allegations against TIAA related to sales practices [11] - AARP Foundation is joining a class action suit against TIAA as co-counsel [11]