Prepare for a generational retirement nightmare

By David Ignatius - Daily Star staff - Friday, May 08, 2009

People have accused the baby boomers of being whiners almost since we were born. But just wait until we get to retirement age and discover that we don't have nearly enough money to take care of our "golden years." That's going to be the ultimate generational bummer.

I've been gathering some data about what I'll call, with the usual boomer understatement, the "retirement crisis." My mentors have been Eugene Ludwig, the head of the consulting firm Promontory Financial Group, and his colleague Michael Foot. The numbers show a genuinely frightening gap between what people have saved for retirement and what they will need. And many of these studies don't take into account last year's stock market crash, which will make the problem worse.

Let's start with the basic fact that only about half of Americans have any employer-sponsored retirement plan at all. The other folks will have to depend on Social Security. For a typical boomer worker, that would mean a monthly benefit of about $2,400 if you reach retirement age of 66 in 2020. On that, you won't be able to afford many lattes at Starbucks.

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For a closer look at the retirement squeeze, consider a study released last month by the Congress
ional Research Service. Patrick Purcell analyzed the most recent data on consumer finances gathered by the Federal Reserve. He found that for the 53 percent of households that hold at least one retirement account, the median combined balance was a mere $45,000. Hold on, you say, that figure includes some younger workers who haven't started saving in earnest yet. OK, for households headed by persons between the ages of 55 and 64, the median value of all retirement accounts was just $100,000. Purcell noted that for a 65-year-old man retiring in April 2009, that $100,000 would buy an annuity that would pay a paltry $700 a month for life, based on current interest rates.

And here's an extra bit of bad news: The Fed data used in Purcell's study were gathered in 2007. With stock market declines since then, the median account balances are probably even lower now.

<snip> http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=5&article_id=101705

Ever since the Reagan years we have been told that we wouldn't have retirement. But, neither did my parents or grandparents etc.
We merely moved into jobs that had a lower activity level. Working as a security guard was one option many men take. Sitting behind a reception desk is what my mother did. My grandmothers sister is over 100 years old and still tutors english. Retirement? What's that?

cost is greater than I believe £20,000.

That would shift medical procedures to the young who would benefit most versus treating young and old alike.

I know that may appear off topic but health care of those over 65 will be a major cost under any form of government sponsored health care and part of a "generational retirement nightmare".

If we had Single Payer, I could retire. The main reason I still go to work even though I am eligible for retirement is for the damn health insurance.

And I am willing to pay for it! Just not $1000 a month... which I would not be able to afford if I had no income!

It makes me crazy.

of the population

both from the administrative aspect-preparing to lose a part of their workforce
to the reality that boomers are about to retire-while they have surely slowed their purchasing they also are about to really superduper stop their purchasing. Demand on a whole is about to decline.