1 Why work has failed us: Because no one can afford to retire anymore. As people struggle to make ends meet, fewer are saving for retirement, and fewer companies offer retirement accounts: 66% of millennials have nothing saved. BY MORGAN CLENDANIEL After 15 years working as a UX designer and developer–focused on projects that have a social or environmental impact – Dan Vallentyne has little saved for retirement. “The work I love doesn’t pay and the work that pays I do not love,” he says. Living in the expensive Bay Area, it was difficult to find extra money to invest. When he has worked in-house for companies, they haven’t offered retirement plans; when he freelances, running a firm called Capslock, he’s been focused on designing and building digital products, not figuring out how to invest on his own. 2 His situation is the norm. For families approaching retirement, the median savings is $21,000 – after taxes. On its own, enough to last a couple a little more than a year living at the federal poverty line. While your parents might have had pensions – with guaranteed checks paid for life from a company-funded account – if you have access to a retirement plan now, it’s probably a 401(k). And there is a good chance there isn’t enough money in it. The 401(k) plan, an employer-sponsored plan that lets workers contribute part of their paycheck to the plan, generally before paying taxes, was never designed to replace pensions . It was originally a loophole meant to help workers defer compensation from bonuses or stock options. But when it was written into the tax code in 1978, a retirement consultant realized it could be used to let employees create tax-advantaged savings accounts. Pensions had been common. In the mid-20th century, roughly half of private companies offered pensions. Now it’s about 8%. Pensions aren’t perfect for employees either; many will run out of money—in part because there are more retirees than employees participating in the plans. And the government insurance program designed to bail them out (PBGC) will run out of money even sooner. “Basically, 401(k) plans just haven’t worked,” says Monique Morrissey, an economist at the nonprofit think tank Economic Policy Institute. “They’ve worked for some people, but for those people, it’s just a tax break.” The majority of 401(k) savings are held by the wealthy–the richest 20% of households hold about three-quarters of the money invested now. Nearly half of companies that offer 401(k) plans don’t offer employer matches; those that do tend to be the most competitive jobs that already pay employees well. So many workers struggle to save . “It’s really hard to get people to save more, especially as incomes have been pretty stagnant,” says Matthew Rutledge, a research economist at Boston College’s Center for Retirement Research. “People don’t feel like they have a whole lot of capacity to save.” By 2016, CEOs of the largest companies were making an average of $15.6 million a year, or around 936% more than they did in 1978. The stock market had grown around 545%. But their employees were only making 11.2% more. The average hourly wage today has roughly the same purchasing power that it did in 1978. A mind-boggling 43% of U.S. families can’t afford to pay for basic expenses like housing, food, transportation, childcare, healthcare, and a monthly phone bill.