Most Americans will never be able to afford to retire.

We laid out the depressing math in our recent report Will Your Retirement Efforts Achieve Escape Velocity?:

The median retirement account balance among all working US adults is $0. This is true even for the cohort closest to retirement age, those 55-64 years old.

The average (i.e., mean) near-retirement individual has less than 8% of one year's income saved in a retirement account

77% of all American households aren't on track to have enough net worth to retire, even under the most conservative estimates.

There a number of causal factors that have contributed to this lack of retirement preparedness (decades of stagnant real wages, fast-rising cost of living, the Great Recession, etc), but as we explained in our report The Great Retirement Con, perhaps none has had more impact than the shift from dedicated-contribution pension plans to voluntary private savings:

The Origins Of The Retirement Plan

Back during the Revolutionary War, the Continental Congress promised a monthly lifetime income to soldiers who fought and survived the conflict. This guaranteed income stream, called a "pension", was again offered to soldiers in the Civil War and every American war since.

Since then, similar pension promises funded from public coffers expanded to cover retirees from other branches of government. States and cities followed suit -- extending pensions to all sorts of municipal workers ranging from policemen to politicians, teachers to trash collectors.

A pension is what's referred to as a defined benefit plan. The payout promised a worker upon retirement is guaranteed up front according to a formula, typically dependent on salary size and years of employment.

Understandably, workers appreciated the security and dependability offered by pensions. So, as a means to attract skilled talent, the private sector started offering them, too.