This is not a new story. We have talked about it many times in many ways. As we start a new year perhaps it’s time for many Americans to rethink their priorities and their futures. It is too late for one generation that lived for today while spending its future in the process. Will the generation behind them have learned the lesson? Sadly, current evidence is not positive they have.
All too many people spend first and then claim they have nothing left to save for the future. The fact is this cannot be true. Rather it is the setting of priorities. If the priority is saving, then there is money to be saved. Of course, this may mean there is no money for other things but those other things are not necessities.
Think I’m crazy? Well, if Americans only had money for necessities it seems to me nobody would have HBO, sports stadiums would be empty as would nail salons. Fast food and other restaurants would be out of business, Disney and other amusement venues would shut their doors, cruise lines and travel agencies would be no more, golf courses would be big empty gardens and Hollywood would be an empty shell (bad example; it’s that now). Plain old sneakers would cost $10.95 and not $129.00 and teenagers would not have cell phones. Am I being too oblique here?
So, it’s quite simple for most Americans. Take what you earn; save 10%, pay for your true necessities 😳and then😳 with what’s left eat out, go to a game and have a ball in your designer sneakers. Or I suppose you could continue as you are and lobby the Elizabeth Warrens of the world to feel your pain and push for higher taxes so the government can reallocate more to you in your old age.
Copyright 2013 Scripps Media, Inc.
A global retirement crisis is bearing down on workers of all ages.
Spawned years before the Great Recession and the 2008 financial meltdown, the crisis was significantly worsened by those twin traumas. It will play out for decades, and its consequences will be far-reaching.
Many people will be forced to work well past the traditional retirement age of 65. Living standards will fall and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after World War II. In developing countries, people’s rising expectations will be frustrated if governments can’t afford retirement systems to replace the tradition of children caring for aging parents.
The problems are emerging as the generation born after World War II moves into retirement.
“The first wave of under-prepared workers is going to try to go into retirement and will find they can’t afford to do so,” says Norman Dreger, a retirement specialist with the consulting firm Mercer in Frankfurt, Germany.
The crisis is a convergence of three factors:
— Countries are slashing retirement benefits and raising the age to start collecting them. These countries are awash in debt since the recession hit. And they face a demographics disaster as retirees live longer and falling birth rates mean there will be fewer workers to support them.
— Companies have eliminated traditional pension plans that guaranteed employees a monthly check in retirement.
— Individuals spent freely and failed to save before the recession and saw much of their wealth disappear once it hit.
Those factors have been documented individually. What is less understood is their combined ferocity and global scope.