Comparing the average Joe's retirement to members of Congress
The federal government has something called the "Thrift Savings Plan," which is for members of Congress, federal employees and military personnel. TSP is similar to a 401(k), but according to Kahn, is run much more efficiently with much lower fees. He says those fees are .027 percent versus the 5 percent. So that would be 27 cents in fees for every $1,000 invested.
"That is minuscule," Kahn says.
The bottom line is that it is cheaper for a congressman or congresswoman to invest and prepare for retirement than it is for average people.
On your own
"It is increasingly a scenario that if you want to retire comfortably, you can't expect social services, your company or whatever the government is offering to provide you enough to retire," Kahn says. "You really need to rely on yourself. You need to plan. You need to budget. You need to think for yourself. You need to find an expert who can help you through the more technical bits of retirement. There is a lot people can do to bolster their nest egg. There are a lot of things out there — but you have to look for it."
Unfortunately, it doesn't look like this is happening for many Americans.
"The conversation we are hearing mostly about retirement," Kahn says, "is the incredible lack of savings among those people who are retiring right now."
In 2010, the Employee Benefit Research Institute estimated that the gap between what Americans have saved for retirement and what they actually would need for retirement was $4.6 trillion. Last year, that savings shortfall grew to $4.8 trillion. On average, workers would need to save $48,000 more to make sure they have enough cash to retire.
"The bottom line is that the gap in savings between what they need and what they have is growing," Kahn says.
How to close the gap
A solution, if people started saving better, would be to work longer. Boston College's Center for Retirement Research found that half of households are ready to retire, but that about 86 percent would be ready if the worker would stay on the job an extra 5 years — retiring at 70 instead of 65. This is because of increased benefits at that age, delayed retirement credits to Social Security and the time to save more money.
Kahn says the keys to retirement are to work longer, save your money, diversify your assets and talk to an expert.
"Just know that you are one among many if you have trouble planning for retirement," he says. "Everybody is having that problem. But there are all sorts of things people can do. The power is really in their hands. The people who will retire well are those who spend a lot of time thinking about it and aren't just waiting for some kind of program to kick in."
Or a person can try to get elected to Congress.