Individual 401(k) accounts originally were designed to supplement pension and Social Security payments during retirement. It didn’t take long, however, for most private businesses to begin phasing out pension plans and simply encouraging employees to participate in a 401(k). Defined contribution plans were infinitely cheaper than defined benefit plans.

Today, public pension plans throughout the country are being targeted for the switch from defined benefit to defined contribution. And Social Security has been eyed by Congress as a candidate for conversion to a 401(k)-style account.

Americans stand to make more money if their retirement money is earning compounding interest in the markets, or so the argument goes.

But how well are individuals doing with their 401(k) accounts? Not very, according to a recent report by the Employee Benefit Research Institute.

In fact, these funds are proving entirely insufficient as a primary source of retirement income. The median amount of a 401(k) savings account is $18,433. That will not allow a retiree to get very far in their golden years, or even to call them golden years. Even if one’s pension or Social Security contributions get added in.

“401(k)s were never designed as the nation’s primary retirement system,” said Anthony Webb, a research economist at the Center for Retirement Research, in a CNBC report.

But for the many who are told not to count on Social Security being around when they retire, a vast number of Americans believe their retirement nest egg will be found in their home and their retirement savings account.

Whether the equity in one’s home has built sufficiently by retirement age is a roll of the die. So, too, is the 401(k).

Many financial experts believe putting employees in charge of planning for their own retirement just isn’t working out. Having little to no investment expertise is a primary factor. Having long-term wage stagnation isn’t helping.

And borrowing down one’s retirement account to cover current debt is crippling to a plan. A recent Washington Post article noted more than one in four Americans have borrowed money from their 401(k). Such actions greatly increase the risk of heading into poverty upon retirement.

“We’re going from bad to worse,” said Diane Oakley, executive director of the National Institute on Retirement Security. “Already, fewer private-sector workers have access to stable pension plans. And the savings in individual retirement savings accounts like 401(k) plans — which already are severely underfunded — continue to leak out at a high rate.”

The statistics are real, alarming and growing worse each year. Yet many lawmakers are seeking ways to reduce Social Security payments, Social Security Disability payments and state pensions.

A 2014 Harris poll found 74 percent of Americans were worried about having enough income in retirement. Another survey, published recently by the National Institute on Retirement Security, suggested 86 percent of respondents believe the country is facing a retirement crisis.

We believe all these factors combined should give lawmakers impetus to keep the promise of Social Security retirement available for all who need it. We shouldn’t be looking for ways to shirk the responsibility of caring for the elderly, or attempting to portray those without enough retirement funds saved as somehow unworthy.

If this crisis is not resolved accordingly, only the rich will be able to retire. The rest, well, we can work until the day we die.

Somehow that doesn’t strike us as the American dream.

Editorial by Patrick Lowry

plowry@dailynews.net

Patrick Lowry is editor and publisher of The Hays Daily News.?