We are constantly inundated with news about Baby Boomers and retirement, especially as it relates to concerns that baby boomers are not adequately prepared for retirement, and also worry separately about the state of Social Security in America. Many of the concerns that baby boomers have about retirement relate to three fronts: will their own retirement funding be sufficient in their golden years; will the federal government's Social Security (SS) fund even have enough money to pay SS benefits to future claimants; and will company-matched plans like 401k's be adequately funded by the time baby boomer employees elect to retire? These matters, in turn, then raise a whole new host of issues, including concerns by many baby boomers that they will have to work past 65 years of age (the customary age of retirement) just to make ends meet; that many companies have seriously under-funded pension plans, thereby threatening the future retirement payments to former and current employees; and the concern that only personally-funded retirement plans will work for younger Americans. In this last regard especially, this subject matter is of critical importance to my personal and future professional role as the choices I make with regards to funding my eventual retirement. Clearly, baby boomers' retirement plans are in jeopardy on a number of fronts, including governmental funding issues, underfunded company plans, and the lack of planning on the part of boomers. The message for the younger generations is one of self-reliance in the form of self-funded retirement and health care plans.
[...] If I haven't saved or invested for future health benefits, that's almost worse then not having secure pension benefits down the road. Many baby boomers have undeniably failed to adequately plan for their futures and cover their retirement plans adequately. Much of this seems to have come down to denial, being overly optimistic, as well as mismanagement of their finances, preferring to blow money on personal indulgences like clothes, trips, cars, etc. Many Boomers have misplaced confidence in their finances, and “seem to rely on some mystical alchemy of strong stock gains, housing value increases, and government largesse” (Mcardle p. [...]
[...] This brings up a related point which baby boomers have been alarmed about for years: many company pension plans are underfunded to begin with, and the recent market malaise and horrific drop in share prices has only exacerbated the situation. For example, many 401k's are at a fraction of their worth as compared to even a year or two ago. The public-governmental employee picture at the State and Municipal level is not much better, so it's a myth to think that all Boomer government employees are somehow better protected. [...]
[...] Demographically, the baby boomers paint a disturbing picture: over the next 20 years, close to 80 million Boomers will retire, and by 2030, almost one in five Americans will be in life's golden years, up from about one in eight today (Mcardle p. 80). With all those numbers retiring, there is going to be an unbearable strain on the demands for pension payments, both privately-funded and in terms of government SS payments. This, in turn, opens up another Pandora's Box: the American labor force has been described as an inverted pyramid, meaning we are heavy” while narrow at the bottom: put in plain English, we have a shrinking labor force in terms of the amount of younger workers supporting the top-heavy 65+ population. [...]
[...] Finally, the demographic issues raised by the baby boomer retirement picture are actually applicable to many other industrialized nations, especially much of Europe and Japan, with its declining birth rates and growing, aging populations. In conclusion, baby boomers' retirement plans are in jeopardy on a number of fronts, including governmental funding issues, underfunded company plans, and the lack of planning on the part of boomers. The message for this author and younger generations is one of self-reliance in the form of self-funded retirement plans. [...]
[...] This is a development which is already happening in certain parts of the world. The plain fact is that many Boomers have to, or want to, work past 65 years of age, and with litigation being what it is, it's a wonder that any jurisdiction will have mandatory retirement by 65 for much longer. Additionally, scrapping the retirement age works to the benefit of governments which are scrambling to find any way possible to defer large retirement benefits and payments. [...]
Online readingwith our online reader
Content validatedby our reading committee