Retirement Crisis

NEW YORK (TheStreet) -- Following the worst quarter for U.S. markets in four years, most investors would do well to pause for a moment of silence in memory of their dearly departed dollars. 

The S&P, as decent a benchmark for U.S. investments as any, lost 8% in three months and is lower today than it was this time last year.

Of course, these are just the averages. The individual results reflected in investors' account balances are probably far worse.

Why? 

Even in the best of times, the fees charged by the financial intermediary complex make for stiff headwinds. In a bear market, however, under the terrible effect of reverse compounding, these fees can ravage portfolios.

Still, according to the Hobbesian logic of the financial industry, an investor must always pay the fee, regardless of how expertly - or not -- the money manager navigates the storm.

Combine that standard business practice with all the industry's forms of legal larceny -- revenue sharing, 12b-1 fees, hidden trading costs -- and their game plan appears straightforward: Heads they win, tails they win.

This is why many of the world's richest people are money managers, and the investment business has produced a greater number of billionaires than any other industry in the U.S and worldwide.

Though it's not always easy to mentally connect the dots between yourself and JP Morgan Chase CEO Jamie Dimon, make no mistake: his $27.7 million pay package for 2014 may have contained a few dollars from your retirement account. 

After decades of their firms taking fees for managing their investors' portfolios through mutual funds, 401(k) plans, and, more recently, ETFs, it's no wonder that Dimon and his colleagues have gotten richer as the U.S. has lumbered toward a momentous generational financial crisis. Large financial institutions are in the business of making money.

Even the casual observer has a sense that the U.S. is on the cusp of a retirement cataclysm. Politicians love to talk about it. Serious and not-so-serious media outlets routinely explore the topic. Even the federal government has gotten involved.

The numbers are certainly worthy of attention: The difference between what people have saved for retirement and what they should have is at least $7 trillion. 

That's about half our country's GDP -- not something the government is going to come up with by looking between the national couch cushions.

So, how did we get here? Click here to find out...