The likelihood of savings lasting a lifetime
of 80+ years is an oxymoron.
A month ago, experts gathered in Washington, D.C. for the National Summit on Retirement Savings. Dick Cheney was there as were leaders in the business community and investment industry. At the meeting, Fidelity Investments reported that boomers have retirement savings of about $35,000 aside from 401(k) employer sponsored accounts. Which is why a quarter of the boomers will have to rely on the sale of their home for income in retirement. Which is part of the reason 70% of boomers plan to work, in some capacity, beyond so-called traditional retirement.
Which is also why, if merchants want boomers to continue to buy,
they will have to hope/help boomers to continue to earn!
And, are we really better off in other ways as maturity looms?
Boomers not only have the highest wage inequality, but also the highest levels of poverty since the generation born before World War I, according to a Duke University study this past month. The study cites erosion in employees' pension and health insurance benefits, Social Security, increased privatization of what used to be public services and moving of welfare recipients to work.
Also, according to the Duke University study:
- One in 10 boomers born from 1956 to 1964 is living in poverty.
- Boomer men in particular have been sideswiped. As the economy shifted from large manufacturing industries such as automobiles, airplanes, rubber, glass and plastics to service and communication businesses, job uncertainties grew, especially for boomer men, the study says. As a result layoffs, enhanced and presented as early retirement offerings, have affected a large segment of the male population (60% of the Fortune 100 firms offered early retirement in 2004). Men are now retiring earlier than ever but living longer than planned.
- The nation's 79 million Baby Boomers will begin to qualify for Social Security in 2008, and for Medicare in 2011. Medicare is broke now! Social Security has been raided frequently. The worse may be yet to come.
And, looking beyond the boomers, how are American social programs faring?
- A USA Today analysis released in March of 25 major government programs - including health care, college aid and food stamps - revealed that enrollment surged an average of 17 percent from 2000 to 2005, while the nation's population increased by only 5 percent. It marked the largest 5-year growth in enrollment since Medicare, Medicaid and other social programs were created during Lyndon Johnson's "Great Society" movement in the 1960s.
Spending on social programs was $1.3 trillion last year, an inflation-adjusted increase of 22 percent since 2000, according to the USA Today report. Enrollment growth accounted for most of the spending increase.
Medicaid added 18 million beneficiaries - a 50 percent increase since 2000 - and is now the nation's largest entitlement program, costing the federal government $198 billion last year. Once a program for Americans on welfare, Medicaid has been expanded to include the working poor and now has an enrollment of 53.4 million.
- The number of Americans receiving food stamps rose 49.6 percent in the past five years and now stands at 25.7 million. Expanded eligibility led to much of the increase and helped put the 2005 tab at $33 billion.
- The number of college students receiving Pell grants increased 41 percent over five years, to 5.3 million. The program cost $13 billion in 2005.
Is it time for us to grow up before we grow old?
Is it time to tighten our belts, time to educate our young, time to face the music and work?
Is it time for organizations to see us as competitive advantages?
Check it out! http://www.boomerstv.com/ - interesting new boomer TV site referred by Rob Meyers.
