No, the world is not coming to an end for the baby boomers going into retirement. The Motley Fool article was excellent and timely. It really is a crisis in expectations. We have never had it so good.
My beloved Grandmother had Social Security, Medicare, and some savings. Grandpa didn't make it to 65 but Grandmother did fine. In her later years, she had family members that lived with her and helped her out. She never had to go to a rest home. Her two kids were close by and they helped her out a lot.
If families stick together, you can get through about anything. What is worrisome is that families are more fragmented now and the extended family that my great grandparents and their parents depended on doesn't really exist anymore. This is a bigger challenge than the solvency of Social Security and Medicare.
PBS did a series on the risks of retirement plans. I didn't watch it but I have seen similar programs in the past. The company pension plan that folks gush over now wasn't as great as advertised. It took a long time to vest and even longer for the benefits to really build up. Most people have multiple jobs during their careers and usually don't stick around long enough to build substantial benefits. Pensions also were not portable. 401k plans, flawed as they are, atleast let you take your balances with you to your own rollover IRA. I have done this a couple of times.
Pensions now are running into all kinds of funding problems now. The causes are pretty much the two recent bear markets, very low interest rates, and unrealistic assumptions about investment returns. It turns out that pensions are just as risky as the 401ks but for a pensioner the risks are not apparent. I am concerned that pensioners might see their benefits cut. Pretty tough when you built your plans around promised benefits.
401ks and IRAs have flaws as retirement vehicles. We should invest them like the pension funds do and consider annuitizing part of our nest egg upon retirement. For me, so far so good.
Let's face it. Investing is risky. Life in general is risky. We can't completely protect ourselves from risk. We save, invest, and diversify our investments. We do the best we can knowing the outcomes are uncertain.
A fool and his money are good for business.