Retirement is a relatively new concept, made popular by Germany in the 1880s. Of course, a person born in 1889, when old-age insurance was made law, could have expected to live about 42.5 years. Perhaps that's one reason why the social security benefits in Germany didn't kick in until a person reached 70.

In fact, most social safety nets were created to NOT pay out benefits; well, at least not for many. The following appears on the U.S. Social Security website: “If we look at life expectancy statistics from the 1930s, we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits. Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65.”

In the old days, you worked until you died or couldn't work anymore. In that case you were cared for and housed by your children or other relations. Today, the governments in the industrialized world are welfare states. And very few of the industrialized world can afford to pay for their future obligations. (See the rioting going on in France over a proposal to modestly increase the retirement age.) Let's face it: governments are broke and the Social Security system will likely be spending more than it takes in by 2016. (The net present value of all of the U.S. government's future entitlement promises is $61.9 trillion, according to the Peter G. Peterson Foundation.)

The Gen Y cohort knows this. (Gen Y refers to the generation born between 1977 and 1994.) They may not have much money today, but they will soon enough. And that fact, coupled with their understanding that they will need to save for their own retirements, means that they are a natural client for the financial services industry. Although the economics of catering to youngsters may not make much sense now, some firms are actively targeting them — to win their assets when they are older.

Please read the four stories laid out over the next 22 pages that discuss targeting young people, avoiding the temptation to raid a retirement account, and the National Institute on Retirement Security's solution to the retirement problem. And lastly, on page 48, mutual fund editor Stan Luxenberg describes a strategy for long-term savings to help worried clients sleep at night.