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About 15% of Americans near retirement age right now have little or no savings. That means they will essentially retire broke. Most of them will be eligible for Social Security, but this will not be enough to pay basic expenses absent other income.

That’s why experts say a full-blown retirement crisis is looming for America. Millions of elderly people with no savings and scant income will create an economic timebomb that financial specialists describe as potentially “catastrophic” and even a grave threat to national security.

If millions of elderly people do not have enough money to pay rent and buy food, supporting them is likely to fall on the younger generations in the form of taxation to pay for government programs. This could result in intergenerational strife that will have an enormously corrosive effect on society.

How did we get here? The situation is complicated, but one major driver has been a transition away from employer-funded pensions over the past 30 years to self-funded retirement plans paid for by the employees. In the recent past, a majority of American workers held long-term employment with major companies that funded pension retirement plans.

Corporate America has been eager to get out from under this obligation and has largely succeeded. Workers who have been maintaining a 401K can be said to have a hybrid retirement plan because both they and their employer kick in to fund this financial instrument over time.

As many industry observers point out, the 401K concept has been a disastrous failure because it has proven to be far inferior to traditional pension plans. The failure of the 401K system has several reasons, including:

* Holders of 401K do not select the optimum investments to drive the growth of the 401K.

* Not all employers are required to contribute or don’t contribute enough.

* The 401K can be accessed by the holder. Thus, too many people cash it out or take out a loan against it to handle current needs.

Easy solutions to the looming retirement crisis do not exist at this time. Experts say those still in the workforce simply must do more to invest for their own retirements. That means spending a lot less today and saving a lot more for post-employment life later.