There was an excellent article written recently by Stephanie Pomboy for Macro Mavens. It focused on the findings of a retirement survey conducted by the Employee Benefit Research Institute (EBRI).
I must admit I was shocked by the article. The article discussed how delusional ordinary people are about their future and their retirement plans.
The EBRI itself said in its survey commentary that workers are "clueless" about their retirement needs.
The first thing Ms. Pomboy discovered was that although workers felt greater confidence in their ability to afford retirement, the number of people saving toward retirement in 2009 actually shrank to 60 per cent.
That is down from 65 per cent of the people the year before, the sharpest drop in the history of the survey.
Ms. Pomboy thinks that the 40 per cent of the people who didn't save toward retirement last year believe that assets - their houses or stocks - will once again increase sharply in value.
If the Federal Reserve is unable to reflate the housing and stock market bubbles - and that is extremely unlikely over the long term - she says "we're in a dilly of a pickle".
And the price of delusion, she fears, will be dear. After all, according to the EBRI survey, a "staggering 27 per cent of workers have saved less than $1000 toward retirement!"
The survey did not give the age bracket of these 27 per cent who were in la-la land. If they are young people, it's not so bad.
If, by chance, the survey respondents are representative of the nation as a whole - with 54 per cent of the labor force over 40 - then we have a rather big problem.
As Ms. Pomboy said, "the figures are truly alarming. Doubly so given the increasingly retractable nature of pension promises."
The disconnect between reality and what people seem to believe about their retirement is simply breath-taking to me. Workers seem to have an unwarranted expectation of living a comfortable retirement without having saved for it...that somehow, it will all work out.
And when it does not work out, I suspect it is these people who will be looking toward that "sugar daddy", Uncle Sam, to somehow change Social Security and bail them out.
But by then, the government cupboard may be bare.